A quick look at HBD and its derivative price and we get this.
- 0.94 on bHBD on BSC
- 0.9 on pHBD on Polygon
- 0.9 on Upbit Korea
There is one more market price for HBD and that is on the internal market, that is also trading bellow one dollar.
But! The blockchain price for HBD is still one dollar!
If you convert HBD to HIVE it will give you a one dollar amount worth of HBD in HIVE after 3.5 days, at the average price for that period.
So why is HBD trading bellow one dollar?
Short answer is low liquidity and slow conversions.
1.
A bit more detailed is while the
2. Conversions
The stabilizer is just a helper for HBD. The main mechanics to support it are the conversions.
What users can do when HBD is bellow one dollar, is buy HBD at low price, convert it to HIVE and get a dollar worth of HIVE after 3.5 days. This is the main issue, it takes 3.5 days for the arbitraged to takes effect, and the HIVE price can change a lot in this type of conditions. Because of this users need larger gap in the price to be sure that the conversions will be profitable.
The HBD to HIVE conversions are build in since the beginning of the chain. The new addition, HIVE to HBD are newer and have 50% instant conversion in them, and we can say they are more efficient.
While the 3.5 delay seems a bit less effective, it does bring a lot of security, because it takes in account a price that is an average of 3.5 days, not the instant price by the minute that can be very volatile.
Liquidity
The main issue here will be the BTC-HBD pair on Upbit. This is the most liquid pool for HBD with 2M HBD on Upbit at the moment and it is paired with BTC. When BTC goes up it tends to pull HBD and the opposite, like today, when BTC is going down it is pushing HBD as well. The bigest downward pressure for HBD today is comming from here.
As reported by coingecko there is a 900k in volume today on this pair. This surpasses the internal market, the stabilizer can have around 190k per day, and it surpasses the derivatives like bHBD that has around 30k.
To answer the question from the title. The BTC-HBD pair on Upbit is pushing the external HBD price down, while there is still not enough liquidity on the internal market by the stabilizer and the Cub pools to take the volume in a short period of time. Conversions can have in theory all the volume we need but they are slow and delayed for 3.5 days with to much market risk at the moment.
Maybe we should make the conversions on the downside to work the same as on the upside? When HBD was pumping above one dollar back in August, the stabilizer provided only a factor of the needed liquidity, most of it came from the 50% instant conversions.
The blockchain is working as designed and it still provides a one dollar worth of HBD when converted to HIVE. This will happen until the debt limit is not hit, or around the 7 cents level per HIVE at the moment.
As long as the debt is not broken, HBD will come back to its levels, but maybe it will take a few days, depending on the market conditions.