Wait, isn't this bad? The stabilizer is kind of working against itself here. It converts HBD to Hive to keep HBD at peg, but by creating more Hive it is increasing the inflation and contributing to the lowering of Hive's value, which then makes it convert even more HBD. This is like a bad snowball effect, or flywheel then.
Is a bull run the only way we can fix this? Did lowering the HBD APR made things worse? The stabilizer converted 1.1M, but users converted 2.9M. I have seen a lot of posts/comments say they started converting more after the APR was lowered. Would returning the APR back to 20 percent help stop the bleeding?
Lowering the HIVE value doesn't cause any more conversions. Only lowering the HBD market value below $1 causes conversions. In the short run less selling (or more buying) of HBD would put a stop to conversions. But then again with less selling and more buying of HIVE we might not care at all because the HIVE price would be going up and not down. So it is hard to say which selling is more of a problem, but either way putting more of our tokens into circulation than people want is not good for the prices.
It doesn't? If I understand it correctly HBD is backed by Hive, thus the name. So if the Hive value gets lower, then the stabilizer will be forced to convert, which is what is happening now.
But the opposite is happening right now. People are not buying, and a lot of accounts are converting/creating more Hive which makes things worse.
The stabilizer only considers the HBD price (<$1 or >$1.05) in deciding whether to convert, not the HIVE price.
Interesting, TIL. And what makes the HBD price move?
Buying and selling of it through the various exchanges and pools.
Ok, thanks.