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RE: HBD Defenses: How HBD Is Different From UST

in LeoFinance • 2 years ago

I think as you already mentioned, the major problem LUNA has is limited use cases. That alone places Hive waaaaaaay ahead and drastically reduces the risk of us having the same fate.

I had no idea the absence of a lot of liquid HBD was protecting the system. That's a new lesson learned.

I also don't understand what an algorithm stablecoin means.

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2 years ago in LeoFinance by
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     2 years ago  

    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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       2 years ago  

      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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