@smooths' HBD stabilizer is a wonderfully simple mechanism which uses funds from the Hive DAO to help stabilize the value of HBD at around the $1 mark.
HBD is pegged to around $1 by the 'HBD stabilizer bot-algorithm' (there's probably a better phrase I could use, but you get the idea!) queries the live value of HBD and...
- If its value is between $0.99 and $1.01 it sends the last hour's worth of HBDs back to the Hive DAO
- If the value of HBD is above $1.01 it sets Hive for HBDs (by setting limit orders on the internal market)
- If the value of HBD is below $0.99 it sells Hive for HBDs, through the three day conversion mechanism...
Whatever sales/ buys/ conversions are made, the HIVE/ HBDs are always returned to the @hive.fund account, the Hive DAO account.
The 'Stabilizer bot' is funded through Hive DAO proposals which are updated every few months. You can read the latest one here: HBD Stabilizer Continuation March 2022
The current update is for 10 000 HBD an hour, although the stabilizer only receives currently around 6800 HBDs a day, because (as I understand it) any proposals with more vote weight get their cut first and then the entire rest of the daily DAO budget goes to the stabilizer.
(NB the lates proposal actually warns that anything falling below it won't get funded because this proposal is for the ENTIRE daily budget.)
The Stabilizer seems to be doing its job....
Judging by the past month's HBD prices HBD is certainly stable around the $1 IF you're prepared to wait a few days to a week for it get back to $1...
While this isn't ideal if you need instant access to your stable (ish) coin, it's perfectly acceptable if you're holding onto your HBD for a week or more and don't need it instantly, because there's a high level of certainty that you will be able to redeem your HBD on Hive's internal market for $1 worth of Hive.
And it's maybe responsible for pushing the Hive Price Up recently?
You may have noticed that the Hive price is holding up VERY NICELY over the last month....
Now I don't know for certain how much of this is due to the HBD stabiliser buying Hive, but it has been buying up a lot recently, I guess as demand for HBD is strong due to the 20% interest currently being offered for putting it in savings.
And you can track the amount being bought by the Stabilizer by simply tracking back through its wallet...
Sometimes it just sends the HBDs straight back to @hive.fund, but recently it's been buying up thousands of Hive every day and sending those back to the hive.fund, essentially locking that Hive up until those with the Power decide to release it somehow (through voting for new proposals/ Hard Forks changing the rules of how the @hive.fund is managed, for example.
Either way, for now that Hive isn't liquid which I guess helps the price.
The HBD stablizer just sounds like a win-win.....
It's effectively a return proposal after all - the money just goes back to the Hive DAO while stablising HBD, pushing demand for that up, pushing the price of Hive up AND increasing (or at least maintaining) future revenue for future development costs...
The only thing I don't like...
As @smooth warns in his latest proposal post we need to be careful to make sure every other proposal above Threshold is above the Stabilizer, otherwise it won't get funded because this proposal sucks ALL the rest of the daily funds to it.
And how do we make sure that happens... well I guess that's down to large accounts manually checking and manipulating those borderline proposals just above threshold to life them above the Stabilizer, which I'm not entirely comfortable with.
I mean, it's not the most elegant of solutions to an otherwise brilliantly simple, functioning win-win algorithm!
