Data On The @hbdstabilizer | HBD Bought, Sold and Overall Profitability

HBD keeps performing as it should after a several small but important tweaks.
One of the key parts for HBD is the work of the @hbdstabilizer. The stabilizer is providing an incentivized internal market for HBD to trade at $1.
The funding for the stabilizer has increased significantly in the last year, as the DHF kept growing.

Let’s take a look how is the @hbdstabilizer doing!

Recently there was a renewal for the proposal and continuation for its work with the funds proposed until May 2023. The stabilizer is now seeking 240k HBD per day. It is not receiving this amount yet, since this requires a 24M HBD budget in the DHF, that now stands at 18M. Because the maximum daily payout is 1% of the funds in the DHF, the current budget for the stabilizer is 180k HBD per day and growing. The bot is runed and operated by @smooth.

We have two scenarios/modes of the stabilizer operation.

1. Selling HBD
2. Buying HBD

HBD is paired on the internal market with HIVE so the trading is in the two native Hive currencies.

Selling HBD

If the price of HBD is above the dollar then the stabilizer is selling HBD to bring it back to $1.
When the stabilizer is selling HBD, it receives HBD from the DHF (DHF payments are in HBD only), sells it on the internal market for HIVE and sends back the HIVE to the DHF, where it is being instantly converted to HBD so it can be used from the DHF.
These instant conversions from HIVE to HBD in the DHF are a bit tricky since there is no virtual or any operation showing them, hence the exact price of conversions. Following the next HF this operations should be visible.

Buying HBD

When HBD is below the peg then the stabilizer is buying HBD to bring the HBD value to $1. Since it receives HBD from the DHF, fist it is converting that HBD to HIVE, and then uses HIVE on the internal market to buy HBD. Buying HBD means selling HIVE.

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From the description above we can conclude that the @hbdstabulizer is receiving funds in HBD only but it is returning funds in HBD and HIVE. When it sells HBD it is returning funds to the DHF in form of HIVE, and when it is buying HBD it is returning funds in form of HBD. To be able to compare the received vs returned funds we will need to convert the HIVE sent to the DHF in HBD.

The @hbdstabilizser started operating at the end of February 2021, and we will be looking at the data since then.

HBD Sold VS Bought

Let’s take a look at the market activities and how much selling and buying the stabilizers has been doing.

Positive bar means the stabilizer is selling HBD, negative bar means it is buying HBD.

We can see that until August 2021 the numbers for the HBD sold mostly kept going up and reached 50k per day. The stabilizer had a small budget in that period and the market conditions allowed HBD to break the peg on the upside.

HBD broke the peg on the upside by a lot in August 2021 and because of this a lot of conversions from HIVE to HBD happened in September 2021, resulting in HBD expansion. Then in October the HBD price returned back to 1$ as the speculators stopped buying HBD, and then a lot of buying was made from the stabilizer.
Since October 2021, the stabilizer is buying more HBD then selling (supporting the price of HBD), although the amounts keep going down.

Here is the monthly chart.

We can see the trend from above here as well. Selling HBD at first in 2021, and a constant buying HBD since October 2021, giving HBD a support.
In 2022 the numbers have stabilized more and we are somewhere in the range of 500k to 1M net HBD bought per month.

More than 6M net HBD in absolute numbers was bought in 2022. Note these numbers are recycled as the stabilizer receives and returns funds back to the DHF.

Funds Received

As already mentioned the DHF is paying funds only in HDB. Here is the chart for the HBD transferred to the stabilizers.

As mentioned, the @hbdstabilizer started receiving funds for the first time on February 20, 2021. At first it was only 2k per day. The thing is the DHF had a small amount of HBD back in February 2021 and could not transfer more funds. As the time progressed the funds in the DHF grew from 1M to more than 18M HBD now and the daily payouts increased.

The stabilizer now receives more than 180k HBD daily and growing. It is not using all these funds and a big sums is just sent back. Depending on the market condition it will use the funds as needed and provide liquidity in the direction that is needed at the moment.

Funds Sent To The Hive.Fund

We have seen the funding of the @hbdstabilizer now let’s take a look at the funds that it has sent back to the fund.

Note that funds sent to the @hive.fund are in form of HIVE and HBD. I have converted the HIVE rewards to HBD, for easy representation and comparison. The numbers are approximate because of the conversions.

As mentioned the @hbdstabilizer sells HBD for HIVE on the internal market and then sent the HIVE to the @hive.fund where it is instantly converted to back to HBD. It is also buying HBD with HIVE when the price of HBD is bellow one dollar and sends that back the HBD as well.

On occasions there was more then 300k HBD sent to the DHF on a daily basis, and the overall trend is up thanks to the increased funding.

HBD Received VS Sent

If we plot the amount of HBD received VS sent to the @hive.fund from the @hbdstabilizers we get this.

A positive bar means that the stabilizer has sent more funds to the DHF then received, a net profit, while a negative bar means that the stabilizer has received more funds then sent back, or a net loss.

The monthly chart looks like this.

The most important chart for the @hbdstabilizer

We can see that in most of the months of operations the stabilizer is in profit or neutral. October 2021 is the month with the biggest loss for the stabilizer.

Interesting in July and August 2022 the stabilizer is in a small loss, although we have seen an increase in the price for HBD in these months. Looks like there was a lot of selling after or prior to the increase in the price of HBD.
September has been a positive month.

The hbdstabilizer profitability is a combination of the buying and selling it is making on the internal market and the conversions from HBD to HIVE.

As mentioned above the @hbdstabilizer is constantly making HBD to HIVE conversions in order to have HIVE and buy HBD if needed. The thing is these conversions take 3.5 days and have a market risk in them, and sometimes they can be market positive, while other times negative. Because the stabilizer is making a relative big amounts in conversions, those can add up.

Overall, in the period of operation the stabilizer received a total of 52.1M HBD from the DHF and returned a 53.6M HBD, resulting in 1.4M profit.

A cumulative profit for the @hbdstabilizer of 1.5M HBD.

HBD Price

At the end the chart for the HBD price in the period.

We can see that HBD was quite unstable in the first half of 2021 reaching price more then 2$. At that time the HIVE to HBD conversions were not possible, and the DHF funds were small. Since June 2021 the HBD has been more stable, with a recent spike up to 1.2$, but the peg was restored fast.

There are now HBD pools on the Cub and Polycub platform, providing additional liquidity and additional price oracles from where we can see that HBD has been holding quite well in this bear year.

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The net effect from the @hbdstabilizer still remains positive! This profitability comes from the trading on the internal market but also from the HBD to HIVE conversions.

There was a lot more volatile in terms of positive and negative balance for the stabilizer in 2021, while 2022 has less volatility.
The final goal is for the HBD to have a stable price, and that has been achieved with relative success in the last period.
The HBD concept is solid. It has a lot of elements now for it to work. It has an incentivized internal market where DHF funds are used through the @hbdstabilizer to maintain the peg. Any external markets and exchanges can use the internal market and arbitrage the price of HBD. The two-way conversions are also doing their job. HBD has a 20% interest now for the savings account, that is a competitive APR. After the next HF the debt limit will also be increased providing more security for HBD holders.

All the best
@dalz

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