I also don't understand what an algorithm stablecoin means.
It means that the coin is not backed by a Treasury holding of 1:1 in an asset like the USD. The backing of HIVE is done via the coding. It is not asset backed.
I had no idea the absence of a lot of liquid HBD was protecting the system. That's a new lesson learned.
If you understand that the risk is a lot of HBD being acquired and then converted to a ton of HIVE, which is what happened with LUNA/UST, that will cause a massive expansion of HIVE which would crash the price. Of course, that kills the peg.
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I was also made to understand that Luna didn't have the kind of staking abilities as Hive does with HP.
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