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RE: Blocktrades proposal to quarantine and increase HBD interest rates

in LeoFinance3 years ago

If there was just a promise of a random interest rate, then you would be correct, that factor would drive the price of HBD higher.

But you're not taking into account the impact of the new Hive->HBD conversion operation which will keep the price of HBD stable (by enabling liquid Hive holders to create more HBD supply to drive the price down to approximately $1).

In fact, I think this one reason that witnesses aren't yet willing to set a higher interest rate on HBD, because without the conversion mechanism, it would lead to an increase in the price of HBD.