Why does a stablecoin need to maintain perfect stability to be considered a stablecoin?
https://www.read.gov/aesop/011.html
Are you familiar with the story of the oak and the reeds? It's one of Aesop's Fables, linked above as it is worth reading, where the lesson is that a little bit of flexibility can be the difference between continued survival and death.
In the recent collapse of UST, aka TerraUSD, and LUNA the governance token which backed it, we have seen a massive release of capital in order to maintain the $1 peg in a bank run scenario. It's currently trading at $0.42, and earlier today it was close to $0.30.
Like the oak, the Luna foundation desperately tried to maintain a near perfect peg at $1, releasing all of their available capital to maintain it. Had they allowed the price to fall somewhat first, all the capital spent would have been able to go further in keeping the token alive.
HBD is more like the reeds in our fable. HBD never tried to be a perfect stablecoin. It routinely drops below $0.99 and lower. It is often also above $1.01. HBD only aims to be stable enough. When HBD does diverge from the intended price peg - the network itself has capital it releases to the HBD stabilizer from the Decentralized Hive Fund, and that capital has more power to defend the peg AND to make a profit for the DHF - the further the peg is allowed to bend. It also may prevent panic - if investors are used to the token not being perfectly pegged - it is not so likely to induce a panicked bank run, as we have seen how the token recovers from such deviations countless times before.
It is ok for a stablecoin not to be 100% pegged all the time. If the purpose of the token is to fulfill online exchanges, it only has to be stable "enough". If you are holding HBD for long term savings, again it only has to be stable "enough" - and it does need to survive attacks and economic events that result in a broken peg.
I personally think UST was fundamentally not viable, despite some similarities to HBD, which you can read about in my prior posts on the topic. And let me be clear that inflexibility is not the primary root cause of UST's collapse. However one contributing factor is that UST along with many other stablecoins, will break before they bend, and face utter collapse rather than allowing small routine deviations from the peg.