This is a really good explanation, and helps investors of hbd to understand the risks.
I find because of these mechanisms and the attractive interest rate buying large amounts of hbd is often difficult to buy without having a market impact on price or taking the risk that hive price will move over 3 days.
I think this is what protects hbd from being a bubble, like Luna and UST, but investors still need to understand the total hbd on issue and market cap of hive supporting that hbd, there is still a risk even with these mechanisms of losing value if hive drops enough. This means that investors rightly should demand a risk adjusted interest rate which is essentially what they are getting at 20%.
Thank you for your feedback! I'm glad you found the explanation helpful.
You're right, the mechanisms in place help maintain stability. However, as you mentioned, investors should always be aware of the risks and consider them when making decisions about HBD holdings and interest rates. Understanding the relationship between HBD and HIVE, as well as monitoring market trends, is crucial for making informed investment choices.