Hive Haircut Rule: Will It Ever Need To Be Changed?

in #hive-1679222 years ago

The Hive Haircut Rule is a measure that was put in place to safeguard the ecosystem. This was recently changed in Hard Fork 26, moving up to 30%.

What is the haircut rule?

Basically, it is a mechanism that continually looks at the relationship between $HIVE and HBD. Since the former is backing the latter, the blockchain needs to be sure it can fulfill the request. What this means is there needs to be at least $1 worth of $HIVE available for each HBD that is outstanding.

Here is where HBD is actually a debt instrument.

The haircut rule helps to ensure this and remove the counterparty risk. At the present moment, if the market capitalization of HBD reaches 30% that of $HIVE, the blockchain stops producing HBD until the ratio gets below the threshold.

As stated, this is a defense mechanism to maintain the peg. Remember, the peg is on the conversion, not necessarily the open market. There the price of HBD for $HIVE can fluctuate. However, when converting, the rate is hard coded into the blockchain.

Each HBD can be converted into $1 worth of $HIVE.

Of course, the coin has a free floating exchange rate. That means the conversion is always the same in USD terms yet can changes based upon market price. If $HIVE is $1, then it is a 1:1 swap; if 50 cents, then each HBD is worth 2 $HIVE.

The question is whether this will ever need to be changed?

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Producing More HBD

It is the haircut rule that makes HBD different from UST. With Luna, there was no limit to the amount of UST that could be created. The potential for a ratio of 125% existed. How could a backing coin hold if the market cap of what it was supporting was worth more? The answer is obvious as we found out.

One of the reasons the haircut limit was raised is so that more HBD could be produced. Certainly I am in the camp that we need a lot more of it on the market. We know, with the existing HBD supply, there is not a lot out there for commercial and financial applications.

That said, we are far below the limit. At the present market cap of roughly $151 million, we could have 45 million HBD in circulation (HBD in the DHF is not counted as it is effectively locked away, posing no threat to the ecosystem).

According to Hiveblocks, there are 31 million HBD total in existence. The DHF is sitting on 20 million, meaning there are 11 million in circulation. That is a long way from 45 million.

Of course, that is at the present market cap. The key to remember is the relationship between HBD and $HIVE is in USD. That is the unit of account both use.

Here is where things get interesting.

If we need to produce more HBD, the only requirement is for the market cap of $HIVE to increase. In fact, this is an fantastic way for the ecosystem to expand.

As more HBD is needed, the community (market) can produce it. By converting $HIVE, that decreases the supply. This, in theory, should drive the price up if demand is the same. Naturally, demand for the access token can come from the need for resource credits, creating the circular economy we discuss so often.

Therefore, if we the market required 300 million HBD, that is possible of the market cap of $HIVE is $1 billion.

It is a process that just keeps moving up the ladder.

Is 30% The Right Ratio?

This is something that is in place only for the last few months. In theory, it was a sensible move but we have to see it operating in practice. So far, there isn't even a hint of a problem.

The ratio is there primarily to prevent a money attack. UST was vulnerable because the expansion of both coins was without limit. That is not the case on Hive.

So what is the proper ratio and will we have to increase this in the future?

A better question might be why we would need to? Under what circumstance could a higher ratio be required?

The only thing I can think of is because we needed more HBD. However, if we were bumping into the ceiling, is that wise? As we can see, since there is no limit to the market cap of $HIVE, more HBD can always be produced.

If we need 30 billion HBD, still a rather small amount, the market capitalization of $HIVE would have to be $100 billion.

Seems fairly reasonable.

Could the ecosystem weather a 50% ratio? That could be possible. However, is it something that is wise to do? At this point, we are just speculating. If we find the haircut rule is regularly being hit, perhaps we can take a look at that. However, if the expansion of the ecosystem keeps driving the demand for $HIVE, we should not encounter any problems.

$HIVE is a value capture token. Whatever is created in value on Hive, in theory, should be captured in the price of the coin. Of course, we know markets do their own thing so it is not exact. Nevertheless, in the long run, as Hive's value grows, so should the market cap.

This allows for even more HBD to potentially be created.

In Conclusion

It is impossible to know exactly what level is proper for the ratio. We do know that 30% appears to be very manageable. There might be times where the rule is implemented and HBD production ceases until things get back in alignment. This is what the mechanism is designed to do.

Will there come a point where we want to raise it again? It is possible. However, the Hive ecosystem provides monetary elasticity as the market (community) sees fit. The haircut rule is in place to prevent the manipulation of this by nefarious actors who seek to duplicate what happened with UST.

In the end, if we are building value on HBD, through utility, we likely will never have to alter the haircut rule. $HIVE should capture the value of the entire ecosystem, of which HBD is a part of.

Of course, it is worthy to mention that even though Hive is feeless, to make payments in HBD does require some Hive Power. Once again, we see the circular. As HBD transactions increase, more HP is required to be able to transact.

This action would push the demand for $HIVE higher.

That said, we could see a time when volatility skyrockets. With a fair bit of $HIVE on Upbit and more being fed into Hive Power, the amount free floating could diminish. This tends to create volatile conditions that could see large moves in price.

Having the haircut rule in place helps the ecosystem weather these moves. While temporary, they could be points o vulnerability without it.


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Great post

@tipu curate

So are there only two ways that HBD is created? When you get rewards for a post and when you convert Hive to HBD? I have heard the term haircut before, but I never really understood what the percentages were all about until now.

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I believe HBD is also created to pay the Witnesses.

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Ah, okay. I wasn't even thinking of that one.

Witnesses are paid in HP. DHF proposals are paid in HBD.

Check, but DHF HBD is already created but locked up if I understood correctly?

Correct. The payout itself doesn't create HBD, but it does put it into circulation. HBD within DHF doesn't count toward the haircut calculation, but once paid out it does.

The DHF receives newly-created HBD from the blockchain every hour (inflation), and some of the HIVE in DHF is converted into HBD every day.

thanks for the clarification, interesting how this all works together, lots of pieces.

Technically, DHF HBD is already created but it is not included in haircut calculation. For the purpose of haircut, DHF paying out a proposal is adding new HBD in the pool.

I am not sure what the haircut consequences are (probably just devs taking the loss as they are paid less in USD value and the HBD pool still mildly inflating).

Yeah that sounds logical I guess, there's a lot involved with this but starting to understand it more step by step

I'm glad there are better minds than mine working on it. Well done to all involved. HBD seems to be working well and even with the depegs hasn't been much of an out of control issue. No death spiral. That's all that matters really.

UST also worked well at one point and "no death spiral so far" was all that mattered.

UST never had any safeguards in place. That is one thing Hive is doing well, putting obstacles in place that slows things down if something similar is attempted.

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This is great, you explained it in a layman's terms and I now fully understand it. Hive is doing well and I'm proud to be part of this community

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Nice explanation of an important concept. It is worth rereading and developing. I had never heard of it prior to this time. I also wonder if steemit had anything like this going on. Its stable currency has not been very stable at all.

Me gusta saber cada vez más sobre hive, gracias por la información 👍, siento que me falta muuucho por conocer aún

good analysis


The rewards earned on this comment will go directly to the people( @taskmaster4450le ) sharing the post on Twitter as long as they are registered with @poshtoken. Sign up at https://hiveposh.com.

I asked about the term "haircut" you used in one of your videos last week. Nice of you to explain it in depth now. 👍

At the present market cap of roughly $151 million, we could have 45 million HBD in circulation.

Actually, the cap on the HBD in circulation would be 64 not 45 million. To estimate this number you have to divide the market cap by 0.7 (100% minus the debt ratio). Then the difference would represent 30% of the potential virtual supply and the actual hive supply would represent the other 70%.

You just have to remember that the debt ratio is in relation to the virtual supply and not to the current hive supply.

Thanks for the clarification.

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I wonder if this haircut rule is managed through the witnesses and if they can adapt it based on the market conditions. If that can be updated on the go, it would surely be a great safety measure to act right away if something bad happens.

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I believe the haircut is hard coded into the blockchain. This is why it was changed in the hard fork. The witnesses do control the interest on HBD in savings. So they could alter/stop that based upon market conditions.

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The witnesses do control the interest on HBD in savings. So they could alter/stop that based upon market conditions.

Titanic crew could have altered the route at any point until they no longer could. But they could keep turning the helm afterwards.

I believe the haircut is hard coded into the blockchain.

It is.
Technically, if the community calls for a quick fix, consensus witnesses can collude (I stressed the consent of the Hive stakeholders - otherwise they'll get voted out for fraud) to adjust the HIVE price feed to allow or disallow further printing without a hardfork. It would be a hell of a mess to follow but not an armageddon (like pretending HIVE is worth more (turning the haircut off) lets people convert HIVE to HBD getting more HBD coins than the rate dictates for a dollar-worth-coin but everyone knows the HBD are worth less so it evens out). Unlikely scenario, but possible.

Once HBD starts having more applications, people will be less inclined to buy HIVE with it, will this have a negative effect on the value of HIVE?

Once you no longer have to use USD to buy groceries (you can pay with HBD), you will find out you have spare bills in your pockets so you will buy your HIVE with that instead.

The only difference is that your neighbors own Hive accounts now.

You are right, now the primary use case of HBD is to buy the other coin. However, do not forget, to utilize HBD, one needs resource credits which means powering it up. Someone has to provide the RCs to operate on chain.

Hence activity on chain could well be the primary driver of demand for Hive. After all, it is an access token.

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Hence activity on chain could well be the primary driver of demand for Hive. After all, it is an access token

Good reminder, HP is the true sink for HIVE and every new user needs Resource Credits. Growth on the hive blockchain will increase demand for HIVE, let's keep growing the chain! Thank you for your support!

!ALIVE

@taskmaster4450le! You Are Alive so I just staked 0.1 $ALIVE to your account on behalf of @ironshield. (18/20)

The tip has been paid for by the We Are Alive Tribe through the earnings on @alive.chat, feel free to swing by our daily chat any time you want.

it is very interested how the HDB generation works, at the moment of reading I was going to ask if we could see a LUNA situation but seems very unlikely, going to bookmark this one to keep it handy, thx for sharing ✌️

There are some obstacles in place to deter something similar like that. The haircut rule is one. The HBD stabilizer can be looked at as another. The conversion mechanism also is not immediate.

All of this is meant to push people away from pulling something similar.

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I think the haircut rule is reasonable right now but we haven't really had too much of a stress on the system yet. I think we still need a ton more HBD liquidity and then we can see how it affects things first.

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The uses of HBD are limited. Increasing this should be among our priorities. For example, if a shopping card called HiveCard, which is used for shopping, is released, it can solve some problems.

As mentioned, Hivepay is already in operation and can be integrated.

Utility for HBD is vital. But there is more to a currency than just payments. That is important but it is also a small sliver of the pie.

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There's hivepay a service built by the @clicktrackprofit team that you can integrate into your webshop right now to accept not just hbd and hive, but also other hive-engine tokens as payments.

The game Ragnarok will become a massive HBD sink.

The same will be true for the Speak network that is built by @3speak

Hashkings is another game that uses a lot of payments with HBD. They integrated Hivepay for that.

The @leofinance team has created derivatives on the Binance smart chain and Polygon and is earning thousands of dollars arbitraging the price of HBD. Soon they will do that on the internal exchange as well.

Many, many more projects are looking into it. Because it works.

Good summary of what is already taking place.

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What this means is there needs to be at least $1 worth of $HIVE available for each HBD that is outstanding.

Thank you for the above line, since I have been reading about the haircut rule this is the simplest form that finally hits home. Am slow to grasp some of these fancy terms.

The Hive, HBD relationship is like none out there, from all I have been reading about Hive and HBD, it shows the mechanics in place were carefully thought of and not just some tokenonmics built with only token price appreciation in mind, there has to be security and we have that.

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There are some safeguards in place based upon what happened elsewhere. The key in all of this seems to be to try and slow things down. That is the difference in an attack. Speed is how things get out of control.

Slowing things down and making the process a pain in the ass can deter some behaviors.

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It's actually really easy to tell where the haircut should be.

The increase to 30% was nice, but we need to leave it here for years to test it.

At the end of the day if legitimate demand for HBD goes higher than 30% we will be forced to increase it. There's really no question about it. Otherwise it will just spike to the upside and be impossible to maintain the peg.

The real problem is estimating the range of elastic demand that will fluctuate wildly between bear markets and bull markets. We need to think of ways to increase demand for our debt during the bear market so that HBD is less likely to be converted to Hive and doubly cripple us during the bad times. It would also be just as helpful if we could lower demand for our debt during the bull. Both of these strategies create more elasticity and buffer for the main chain.

What constitues a legitimate demand for HBD?

I assume hoarding HBD in savings is illegitimate and healing your Ragnarok deck is legitimate? Even though the coins apparently end up hoarded in Ragnarok savings account? (spoiler: all of them won't, that's unrealistic)

There is no need for HBD for transcating. Two rational parties can always agree to send X HIVE instead of 10 HBD if actual HBD coins are hard to get.

Although in practice, I wouldn't be surprised to see SIM Based Dollar or LEO Based Dollar if people are stubborn about stablecoin transactions. And that's after SWAP.USDT and SWAP.BUSD that Hive-Engine already has.

We need to think of ways to increase demand for our debt during the bear market so that HBD is less likely to be converted to Hive and doubly cripple us during the bad times. It would also be just as helpful if we could lower demand for our debt during the bull. Both of these strategies create more elasticity and buffer for the main chain.

My plan is to tell everyone "Keep your HBD, you'll get more HIVE later" during bear and "Dump HBD into HIVE before it moons" during bull. I expect noone to listen to me because they will be busy doing it already. OK, I concede, once the bull starts I am fine with anyone burning 2.5 HIVE to get their HBD only to convert it back into 0.25 HIVE later.

Wouldn't it be the same as swapping Hive for BTC if you're replacing HIVE for HBD? Trading/Transacting with just Hive would just increase sell-pressure for Hive. Having HBD as a mandatory option should give more stability and should lower volatility to the downside (as it is pegged). But I guess it's all theory until it's not. So I think it's good to test things out for longer periods of time before making adjustments.

It also makes for a valid reason to hold and transact with HBD if you want to chip in and do your part btw. At least, this would be the case for me to hold some/more HBD, and to put more in savings to mint new HBD (which also increases the supply).

My apologies if I come out rude. I do appreciate the input.

Wouldn't it be the same as swapping Hive for BTC if you're replacing HIVE for HBD?

I am not sure what you refer to. Did anyone ever use SWAP.BTC to buy a product?

Trading/Transacting with just Hive would just increase sell-pressure for Hive.

If the government of Utopia says it is illegal to pay another citizen in a different currency than Utopian Mark, that should probably increase sell pressure on Utopian Mark (because there must be something wrong with the currency).

If all people prefer to use Utopian Mark over alternatives, why would any Utopian sell theirs for any other reason than travelling abroad or pure speculation?

Having HBD as a mandatory option (...)

I can read this two ways:

One: You have to transact in HBD.
Two: You can transact in whatever currency both sides prefer, but if you disagree you have to accept HBD.

Either way, I stopped reading the sentence right there to remind you that the currency of my transactions is none of your business.

It also makes for a valid reason to hold and transact with HBD if you want to chip in and do your part btw. At least, this would be the case for me to hold some/more HBD, and to put more in savings to mint new HBD (which also increases the supply).

I do not get the message here either (what does "It" refer to?) but I hope you help your country's economy by minting new coins too. OK, HBD is minted according to fixed rules but this exercise should help understanding why HBD is not a dollar.

No worries, English isn't my first language. Mandatory wasn't the right word, 'secondary' would've been correct.

I am not sure what you refer to. Did anyone ever use SWAP.BTC to buy a product?

You missed the point. But sure, indirectly it's probably how one may see that, as in: "I sold my BTC to buy X". Whatever form of (wrapped) BTC, in your case; SWAP.BTC is then sold (note the selling pressure if thousands will do this)/traded by buyer/merchant for a currency to cover costs and expenses. The same would go for HIVE, and obviously HBD as well. Since HIVE is a governance token, and HBD has more properties that resemble a similar stablecoin (like a dollar), it's a no-brainer which one to prioritize to use to transact, but that's indeed not my business. Fair, anyone could use HIVE to transact, I wouldn't mind. I price HIVE much higher than it is right now, so I'd be more than happy to accept HIVE -right now- as a receiver. Understand that uncertainty will grow when prices of Hive will be higher, are volatile, spike, etc., and the risks (insert your Utopian Coin here) and volatility probably grow with it as well. But another important factor is that buying pressure -needs- to be equal to the introduced selling pressure to cover costs/expenses of products that are being bought/sold with HIVE (and not with HBD).

If you have purchased Hive for 10 cents, and you can buy something for 10 dollars for 1 Hive in the future, let's say 30% is costs/expenses. Guess how much money is actually flowing out of the ecosystem at the price of 10 cents? Sure, this is great for the early investor, but the newcomers are paying for that. Do the same basic math with HBD. This could be easily countered with transacting in HBD, as prices have shown to be quite stable over time. At this point, I'm not even considering the Utopian version. It would be the same as "Hey, I bought this with HBD", even if this meant using HBD to swap for BTC, which then swaps for USD or whatever currency is accepted. The point is, that such a thing will decrease selling pressure -to the downside- of Hive (and increases that of HBD).

OK, HBD is minted according to fixed rules but this exercise should help understanding why HBD is not a dollar.

No one is saying that HBD is the same as a dollar. It is aimed to be pegged to a dollar equivalent worth, do note the difference. With your logic: Hive isn't a dollar either.

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This is great information for me. It helps me understand some of how tokens work. I never heard of the 'Haircut Rule' and it sounds like a good thing to be in place.

!CTP

Let fly over a scenario inside of the Haircut:
Here are numbers, Hive = 27c$
100.000.000,00$ Hive MC
30.000.000,00$ HBD aka 30m HBD

--
Now the HBD APY and general Inflation will be paid in HP and Hive from that point on, and the HBD APY in liquid Hive.

Here is a starting point and fixed parameters to keep the complexity in check:

  1. All the 30m HBD are locked in saving and create ~1.7% a month. The rest of the Inflation in Hive is ~0.58%/m.
  2. None sells off, we all Diamond Hand into the Network.
  3. Everyone wants to go as deep as possible into HBD and we stay at Haircut.

How I see it play out:
The HIVE Marketcap will increase due to;
HBD Savings by 30.000.000$*0,017= 510.000,00$ in Hive <=> 1.888.888 Hive
Hive Infaltion 100.000.000 * 0,058 = 580.000 Hive <=> 156.600$

So people can reinvest 30% of that into HBD, due to the Haircut and 70% will have to stay liquid. Now I believe that the HBD price will start to rise by a small % in waves, people will arbitrage and the Hive price started to rise to expand the MC and create additional space for more HBD - in good market conditions. If there's the bottom of a bear market outside and all coins start to swing downwards, we might see the Haircut getting very deep and additional sell pressure is generated.

What do you think?

Let fly over a scenario inside of the Haircut:
Here are numbers, Hive = 27c$
100.000.000,00$ Hive MC
30.000.000,00$ HBD aka 30m HBD

This is not inside the haircut. This is on the edge. Right in the doorway. That infers you might be one of those still thinking the haircut kicks in when someone says: "Good job guys, we have printed the last HBD, take some rest now" in the printing room. In practice, haircut kicks in when the witness price feed goes down and it does not stop in the door. The haircut that came to your house is not hitting the wall and stopping there. It is rushing through inside fully intending to go upstairs right in your bed.

Now the HBD APY and general Inflation will be paid in HP and Hive from that point on, and the HBD APY in liquid Hive.

Assuming I FYPed correctly to what you wanted to say, the former is true (note that HBD printing was already limited there since 20% debt ratio) but the latter is not. Noone wants to pay your HBD Savings interest in Hive. The whole point of debt ratio is that we stop pretending we are allowed to print dollars at one point. You want HBD coin? You get interest in HBD coin! HBD is not worth $1? Your problem!

So people can reinvest 30% of that into HBD, due to the Haircut and 70% will have to stay liquid.

How? Pretending all inflation is paid in HIVE and everyone wants HBD, there is 2.5M new HIVE coins and zero new HBD coins so HBD/USD goes up (I am not saying over 1.00 as it surely was well below 1.00 before the haircut). Unfortunately, the spike can only be followed on inside-your-head exchanges ("all HBD locked" is not very useful premise, is it?) and there is no way you can reinvest even 10 HIVE into HBD. And you claim it is 30% (of 2.5M) and not 29% or 31% based on something you do not explain (just because debt ratio is the same figure).

Even if you allow some liquid HBD for trades to actually happen, what does "people will arbitrage" mean? They can buy existing HBD driving the price up but no HBD is created to keep the peg so it overpegs (that sounds silly, and it really is - and that's because in practice all three "complexity-check points" are the exact opposite of what you can expect). I see no way to finish the mind experiment from that point on.

The potential for a ratio of 125% existed. How could a backing coin hold if the market cap of what it was supporting was worth more? The answer is obvious as we found out.

And chance for that still exist on Hive. You can't really compare both or write about HBD haircut ignoring value drop on "collateral". You just described one side of the deal, pretending it's all safer than UST, and ignoring main risk.

This 30% can be 125% very fast. Someone could say there is no limit for that. Even if you stop printing hbd, hive value still can go down.

Which factor have higher impact on mentioned ratio, hive price or people?
I think however you approach this matter price change is more important.
This might be even measurable, you can compare activity based changes on ratio to price based changes to ratio in time. Like: take ratio some time ago, could be date of mentioned change, compare it to actual ratio after time, and compare influence on change by activity -> printing hbd, burning hbd to change caused by hive price.

If we reach 30% ratio at 3$ Hive and hive price will drop overnight to 1$ it's not 30% anymore, right? You can imagine all the events following this scenario, printing hive to drop price even more to print more hive, etc...

So, Hive price amplitude is probably most important factor on the topic you describe, but you missed it. Possible any number above 10% creates risk, not necessary we will see it now at low hive price, but eventually with next bull period if people start cashing out to HBD and we will get closer to 30%, eventually price will drop and some funny events may occur.

Take a look at Hive chart, think about something like max possible value drop on Hive. Maybe 3 - 0.3?, 10x ? Then simulate how this will affect ratio at 30% :)

Worth to mention is that I know nothing about hbd itself. Wrote it based on your post and basic math knowledge.

You are correct on the math that a huge drop in price will cause the ratio to drop. When that happens, the creation of HBD stops along with conversions. The point was that more creation doesnt continue unabated like with UST/Luna.

Conversion of HBD would help to eat it up, lowering the market cap and ratio.

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Conversion of HBD would help to eat it up, lowering the market cap and ratio.

Unfortunately, conversions don't earn full dollar of HIVE and the released (created) HIVE pushes HIVE price further down after 3.5 days of sky-is-falling posts all around.

I am pretty sure it is going to be intelectually challenging to play the market but I am afraid even the top prize is not too lucrative.

If we reach 30% ratio at 3$ Hive and hive price will drop overnight to 1$ it's not 30% anymore, right? You can imagine all the events following this scenario, printing hive to drop price even more to print more hive, etc...

If the debt ratio is at the maximum of 30% and the value of Hive drops the blockchain will stop paying one dollar's worth of Hive. In the scenario that you described, HBD would be worth 30 cents. So the debt ratio cannot go above 30% by design.

In fact, the blockchain starts printing less and less HBD when the debt ratio hits 20%.

That's good to know.

So the debt ratio cannot go above 30% by design.

He literally demonstrated how that happens, nothing you can do if HIVE price falls.

Fun fact: If we changed the haircut debt ratio to 100%, that would be rather arbitrary as well. HBD price is dictated by supply and demand and if people decide to trust it and use it despite blockchain setting a 150% debt ratio, once again there is nothing anyone can do about it. It will work. People trusted a coin that openly set that variable to infinity.

In fact, the blockchain starts printing less and less HBD when the debt ratio hits 20%.

This a good point that is actually overlooked by most people. Most believe that HBD is worth $1 all the way the the haircut threshold (30% debt ratio atm) and only starts losing value once it goes over but historically that has been proved wrong so it was wise to widen the preparatory stage (it used to be as narrow as 9% to 10% before HF that moved the haircut from 10% to 30%). This way supply starts reacting to upcoming risks at a more reasonable point. That's the side that can be handled. The other can not.

Possible any number above 10% creates risk, not necessary we will see it now at low hive price, but eventually with next bull period if people start cashing out to HBD and we will get closer to 30%, eventually price will drop and some funny events may occur.

That should read "Possible any number above zero creates risk". Surely noone loses many with 0.1%-haircut-imaginary-HBD as there is not enough of those out to bother. Sooner or later, any number gets there, 10% or 30%. The good thing about the architecture is that it clearly defines who the losers are. If HIVE price inflates due to HBD success, and the troubles hit during a bear, it is going to add some selling pressure from people who would feel cheated (in fact they didn't RTFM) at the worst moment possible but since the Hive network still has value outside HBD, there is no need to crash all the way to $0 HIVE (Luna style).

right game starts from 0. At least we play it against ourselves. Possible it's more psychological matter than numbers and stretching playground probably doesn't matter until we maybe reach very high HIVE price somewhere in 10 years

since the Hive network still has value outside HBD, there is no need to crash all the way to $0 HIVE (Luna style).

That is true. Applications have an incentive to hold it simply because of the need for resource credits. People need them to engage onchain.

Also, the key is to build value on HBD itself, through utility. That means that in spite of the trading and other financial aspects, users have incentive to keep it in their wallet, ie to make payments and purchases.

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