Is The HBD Stabilizer Frontrunning Everyone Else For HIVE to HBD Conversions?

dalz.shorts in #hbd • 3 years ago

There is a 5% fee for converting HIVE to HBD. Meaning this is getting profitable only if the price of HBD is at $1.05 or more. Plus there is a 3.5 conversion window that add market risk on top of it, so to be on the safe side you really want the price for HBD to be up a lot.

Meanwhile the stabilizer has a bunch of HBD from the DHF (130k per day to be exact) and it is selling it to a small premium of 1% or less, meaning 1.01 price. What this means that the stabilizer is the only one that can profit for a HBD price in the range of 1.01 to 1.05.

What this means that for this price range the stabilizer is the only one that will keep profiting and growing the DHF balance and locking HIVE in the process. Now the DHF is not a single entity and it serves the whole Hive ecosystem, but I think it still needs to be on a same level playing field with everyone else, meaning selling HBD for the same premium as the fee for conversions. At the moment that will be 5% premium or more preferably we change the conversion fee from 5% to 1%. This will most likely make HBD to scale more easy as well. Maybe there is still room in the next HF for this?

Any thoughts are welcomed :)

#conversions #hive #leo #pob

3 years ago in #hbd by dalz.shorts

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deepresearch 3 years ago

Let's decentralize conversion process. Not simply to make field equal, but for the stabilisation to be made more efficient.

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dalz.shorts 3 years ago

or the stabilisation to be made more efficient

How?

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deepresearch 3 years ago

Arbitrage made by a free market should work better than with one entity. And we are not strangled by a size of DHF funding limits (which might be a case in the future)

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engrave 3 years ago

Arbitrage made by a free market should work better than with one entity

But it's working pretty well right now. If it wouldn't be enough to keep to the upper peg, the price would raise enough to make the conversions profitable for average users and it only happened once for a longer period last year.

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deepresearch 3 years ago

I have to objections to how conversion works RN. It's a matter of principle and future growth. I don't know however if that might be changed according to needs or HF is necessary?

Edit: I have NO objections

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engrave 3 years ago

What kind of objections do you have and what kind of changes you would like to introduce?

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deepresearch 3 years ago

Comment edited, misspelling happened.

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revisesociology 3 years ago

I 100% agree with brining down that conversion fee, 5% means it's a non starter for most people.

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dwayne16 3 years ago

I don't know about this but bring the fee down will be great. Have been hbd alot recently I will welcome that change

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erikah 3 years ago

I'm also in favor of changing the conversion fee from 5% to 1%.

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woodathegsd 3 years ago

And what is the difference between the liquidity swap? Because I can trade Hive for hbd or the other way around instantly. And if I was part of that liquidity pool I would also get a share of the fees...

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iliyan90 3 years ago

I was doing the test myself a few days back trying to figure out the math around it…

Did a few types of exchange market and 3.5 days trying to get to a point…

But didn’t get much far…

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melbourneswest 3 years ago

I still have no idea how all this works and I just stack HBD and don't worry about anything else. Makes no sense

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dalz 3 years ago

That is acctualy the proper thing for a user to do :)
Dont wory for all of this to much

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melbourneswest 3 years ago

haha! yes that's right. I let others worry about the intricate details I will just focus on Building

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smooth 3 years ago

Well, anyone can do the same thing, but they have to be donating to DHF. Most people aren't willing to donate to DHF just to get a small profit on HBD, but stabilizer is!

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dalz 3 years ago

Yes that is true as well.... also not everyone is getting their hbd from the dhf :)

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smooth 3 years ago

Anyone can. You need to make a proposal that is persuasive to the stakeholders. Donating the funding, potentially with profit, is reasonably persuasive.

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steemstreems 3 years ago

They can only do that on HBD that are in the system. Once it gets out (PolyCUB -- cough cough) it will likely not come back in easily.

Of course HIVE does control the supply and down the road there may be a situation where most HBD is traded off chain. Maybe that is the goal. I don't know and don't have the chops to game out the scenarios. Maybe @smooth could speak to this ;-)

I personally think having HBD out in the world trading and being spent would be a great thing for the future of the coin, but what do I know.

Oh. Yes I think it would be good if they came off of the fee somewhat :-)

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smooth 3 years ago

People using HBD to trade both on and off the chain is great. Either way it is using the product as intended.

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steemstreems 3 years ago

Thanks for the reply. I hope I am not being premature, but I feel that several catalysts are lining up for us to capitalize on Actifit, LEO, new games, Defi.

The move by the witnesses to up the interest has fanned all of these small flames into bigger ones. Now I just want outsiders to come and sit by our fires, take our money out with them, and get others excited :-)

Keep those HBD coming.... as long as it is wise anyway...who knows the real answer to that one :-0

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