Your post points out that the conversion formula provides a sufficient peg for HBD.

The real question is: Does the 20% interest on HBD provide any value for the blockchain?

The 20% interest has pernicious effects throughout the Hive-O-Sphere. The long term effect is that most of the HBD interest will be converted to HIVE and sold on the open market. It is likely that the dumping of HBD will happen in a weak market.

In May HIVE gave out 55,000 HBD in interest. Over half of this interest went to the top 12 accounts. It turns out that the top 1 percent of active accounts received over 90% of the HBD interest.

So much for the claim that HIVE will lead to a more equitable society.

Converting 55000 HBD at $0.453 would create 121412 HIVE to be dumped on the market. The epic dumping of HBD will happen when HIVE is trading below $0.3.

The HBD interest has also had a pernicious effect on HIVE-Engine. One can prove the following observations by examining the transactions on honey.swap. Honey.swap which is the primary means for moving funds between HIVE and SWAP.HIVE.

It appears that a large number of authors were moving their HBD rewards to HIVE Engine and buying alt coins. When the witnesses raised the interest on HBD, the flow stopped.

There were many people who started liquidating their HE coins and moving it into HBD. The result was a collapse of the HE coins.

Even #LEO is faltering.

IF the conversion formula is sufficient for HBD to operate as a stablecoin, then why are we inflicting so much damage on the Hive-O-Sphere in a scheme that only benefits the top 1% of accounts?

!BEER

Posted using Proof of Brain