There is so much wrong in this blog i dont know where to start.

AMM for HBD on base layer is a great idea, i'd implement it tomorrow and run the code on our witness if you built it.

but this idea from you that bonds aren't the best mechanism in history for creating liquidity is so far off the mark, i really really dont know where to start.

bonds are sold via reverse auction. so the market sets the rate. witnesses will do it initially, but over time the market can set the rate via monthly auctions.

copying the old system is exactly what we should be doing. they invented an insanely good liquidity provision tool. have you ever traded national level bonds? then you would know how big a size that you can get in and out of with one click. billions, with one click and you don't even move the market.

we just don't copy the legacy system's mistakes (covering up mistakes, not being transparent about when fresh money is coming due from bond maturity) the whole point is that hive can do this, since it is by default transparent. So yes, we can copy exactly what the old economy was trying to do, create the most liquid market in history doing it, have the lowest possible interest rates for the ppl requesting loans and out compete everyone else by a country mile.

they idea of bonds is using them as collateral and this is what creates the liquidity. above you said that nothing happens when the hive is locked into bonds to create HBD bonds, but you cannot be further from reality thinking this. once you have bonds the whole point is that you can use them as collateral for loans to make much much higher interest rates than any high APR that you can fantasise about on the base layer.

This also removes any risk off of the base layer and puts it into the hands of the bond traders, loaners and passive income earners. it takes it away from hive holders. so not only can we drastically lower the APR on the base layer on HBD by letting the market reverse auction compete for the lowest rate to get hold of the bonds, thus deleveraging risk on Hive LI, but we can also earn far far more than 20% APR passively on our HBD bonds by using those low rate bonds on an LII collateralized loans system and putting the risk on the passive earners and their counter parties on LII. this is great for hive and it literally replaces the whole Euro Dollar international banking system with a better alternative. do you have any idea how many trillions per day of liquidity moves through that market. it basically invented liquidity. The addressable market is so big it is difficult to comprehend. if hive were to capture just 0.1% of that by mimicking it with a more transparent model it would be the most liquid asset in crypto by 100x

U bring the big boys by having an ultra low rate, reverse auction market driven stable LI bond. AMM liquidity pools on LI can be a great addition to this too. then you offer them insanely high APR's on LII systems that use their stable LI bonds as collateral. this makes a low risk LI with a higher risk LII where higher APR can be earned passively without putting risk on the LI bond holders who are not loaning out as collateral for higher passive APR on the LII loans system