HBD Interest paid by Hive holders.
I have made a post about "how 200%+ inflation are possible" with 7$ hive to 0,2$ hive.
That was only in theory. But to be honest 50% would damage a lot too.
Printing HBD means shorting hive.
That's something nobody wants to hear. Printing a Billion HBD can be short-term perfect for the price.
Or 10 Billion or whatever stablecoin.
But at the end, its a reliability to the network.
Default ( going to 0) or devalue the coin.
That will be always the song.
The current market is a bullshit ponzi market. Printing $ out of thin air and trading with the same people.
No more real fiat comes into the game.
that is the bottle neck and will crush this bullrun.
I get that you can recycle between tokens and make any APR for a certain period to get capital to flow from the one to the other and just slosh the capital, basically like a wash trade and then scalping the arbs and maybe that 5% minting fee to a certain point
The way I see it is to get people to lock their HIVE up to decrease supply do some accounting tricks as not enough new fiat is hitting the market to absorb the increasing supply so make your own fiat out of nowhere and encourage people to "purchase that fiat" with locked up hive.
It's a great point you make about shorting HIVE I didn't think of it that way.
every HBD created is "no extra demand purchase".
And you get an exponential MC curve with falling prices in Hive.
Convert HBD to Hive on falling price = increase MC of Hive = allow more HBD to be in existence.
So if hive hits a lower price, it's like a short option, because you don't need to buy, you simply can create it.
Doesn't matter how deep the market is.
And the best, no extra demand. This transaction creates more hive and doesn't remove hive from the market in terms of a buyer purchase.
IMO a timebomb. I remember the 20% + Inflation times on steem because of SBD.
Same on larger scale we will see in bear too here IMO.