Almost my whole career is about downhole tool development (tool design and simulation, tool test, data process, answer product algorithm development and etc.). I have very limited financial knowledge. Though I will try my best to explain the financial mumbo jumbo with a plain English in my understanding, some might be not accurate. Please feel free to correct them.
In Hive white paper, about Assets only 8 lines, very brief. Since it is hard forked from Steemit, I used Steemit whitepaper (June 2018) to interpret Hive assets. There are three asset names:
- HIVE: a liquid currency; can be bought or sold on exchange, or transferred as payment. Three ways to get HIVE: buy on exchange, power down from HIVE Power (HP) and reward from Hive network.
- HIVE Power (HP): like a fix term investment (15% yearly interest with a 13 week vesting schedule). HP balances are non-transferrable and non-divisible. It is proportional to how much users can swing the reward distribution when voting on the content. Two ways to get HP: power up from HIVE and reward from Hive network.
(Off the topic a little bit here: In Steem Power Section, it starts with the sentence, "Start-up companies require long-term capital commitment." Sounds very funny to me. Isn't it true for all companies? The other thing making me ponder is why the number of 13 is chosen, not 10 or other easy divisors. Based upon many negative comments on Steem, it seems that the founders were extremely condescending. Then allow me to take a bold guess, this number must be related to Judas, the 13th guest. It implies that the users withdrawing their investment are betrayers. If they did think that way, what a shame they are!) - Hive backed Dollars (HBD): a tool to stable Hive value, 1 HBD always is equal to US$1. Only can covert HBD to HIVE and this, not vice versa. Besides, this conversion will be processed in 3.5 days. One way to get HBD: reward from Hive network.
To peg HBD to USD at one to one rate, first Hive network replies witness to publish price feeds. The published conversion price is mean value over the mean time window (3.5 days). The whitepaper said "As long as the price feed corruption lasts for less than half the moving median time window it will have minimal impact on the conversion price." My understanding is that the skip time is 1.75 days. The following is the example of skip time.
Days 0 0.5 1 1.5 2 2.5 3 3.5 4
Conversation rate 1 1.05 1 0.9 1 0.95 1 1 1
Two day mean with
skip time = 1 day 1 1 1 1
Two day mean with
skip time = 0.5 day 1 1.07 1 0.925 1 0.975 1
To me, the constant skip time set is not a good algorithm. Some smart hacker might get a way to influence the conversion rate.
Second , Hive network adjusted the amount of the awarded HIVE to keep the amount of HBD to
the total HIVE market cap (debt-to-ownership) ratio at 10%.
Last, When HBD is less than $1 and debt-to-ownership ratio is higher than 10%, witnesses have to give more HIVE to the market and return HBD to parity with USD.
My bread and right record: Today I have 0 HIVE, 0 Vote power.