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RE: The Hive Lending Platform

avatar of @badbitch
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@badbitch
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I feel like everybody reading this is getting it all wrong and only looking at the leverage that comes with using volatile assets as collaterals. At first, I thought, why would anybody want to put in HBD to get back HBD because sHBD is in fact HBD, well, this is where it is tricky and if you're heavily into Hive, you'd understand the merits and how it effectively promotes holding Hive Debt - HBD.

To narrow it down, first, we have to look at the demand pressure it forces on Hive, because getting HBD means buying Hive!

This causes Hive's market cap to grow, benefiting Hive holders and also serving as a catalysts for security because it leads up the coins marketcap, causing the heavy printing of HBD to fall to nothing as it doesn't up the supply way too much to cause concerns(like exceeding the haircut).

Additionally, the borrowers stands to earn an interest for taking instant loans that nearly matches the sum pooled. Long term, this becomes a medium of loan repayment and really doesn't disadvantage the borrower and also doesn't put the lending protocol at risk.

Then again, as a Hive holder, you're effectively earning not only on the loans you take out but also on the HP you hold, this is where we're really look at abundance.

The Network prints this value, users sustain it by being eager to grab high instant loans that earns them interest, the real problem here would be building up liquidity for sHBD that doesn't go to sink the Hive price.

Posted Using LeoFinance Beta