In the ever-evolving landscape of cryptocurrencies, stability has always been a sought-after feature. Enter Hive Backed Dollar (HBD), a native stablecoin residing on the robust Hive blockchain. But what sets HBD apart from the myriad of stablecoins out there? Let's delve into its inner workings and explore the mechanisms that uphold its peg to the US Dollar.
Decentralized Stability
At its core, HBD is designed to maintain a value of $1 USD through decentralized means. Leveraging the fee-less and swift transactions facilitated by the Hive blockchain, HBD ensures efficiency without compromise.
The $1 USD Peg: How It's Maintained
Achieving and sustaining the $1 USD peg involves two decentralized conversion operations:
HBD to HIVE Conversion: This operation converts predetermined amounts of HBD into HIVE equivalent to $1 USD, with no additional fees. However, it takes 3.5 days for the conversion to finalize, with the conversion price being the median price over this period to thwart market manipulations.
HIVE to HBD Conversion: This collateral-based conversion allows users to initiate the conversion of a specified amount of HIVE into HBD. Upon initiation, users receive an equivalent value of HBD, calculated as half the value of the HIVE. After 3.5 days, the cost of the received HBD is determined, with any remaining HIVE returned to the user. However, a 5% fee is incurred during this conversion, which is burned in the process.
Supported Wallets and Savings Opportunities
HBD transactions are supported by a range of wallets, including Vessel, Peakd, and Hive Keychain. Moreover, holding HBD in a Savings Account on the Hive blockchain can yield returns, with an attractive Annual Percentage Rate (APR) of 20%.
Navigating Risks: The Haircut Rule
Despite its stability mechanisms, HBD is not without risks. The haircut rule serves as a security measure, ensuring that the debt ratio of HBD to HIVE remains below 30%. When this threshold is breached, the haircut rule halts the printing of HBD, potentially disrupting the $1 peg. However, history has shown that this rule effectively prevents over-debt while maintaining healthy token prices.
Where to Engage with HBD
For those looking to engage with HBD, several platforms offer avenues for purchase and exchange, including Hivedex.io, Hive.blog, Ecency, Blocktrades, Tribaldex, Upbit, and XBTS.
Tracking Performance
For real-time statistics, market capitalization, and more, visit https://hive.ausbit.dev/hbd to stay updated on HBD's performance.
In conclusion, Hive Backed Dollar presents a compelling option for those seeking stability within the cryptocurrency space. With its decentralized approach and robust mechanisms, HBD stands as a beacon of reliability amidst the volatility of digital assets.