RE: Crypto.com Sends 320k ETH Out Of Treasury Accidentally
Even with the HBD it is not fully clear to me how it can sustainably work.
What you are implying here is that, not only can Hive not generate an average return of like 1% to make up for HBD yield, but also HBD yield will never change even though it's a variable number that can be changed at any time.
For example, if there is 10M HBD in circulation, and Hive market cap is $100M, then we have a debt ratio of 10%. After a year, we owe the HBD holders 2M more HBD, which is only 2% of the total Hive market cap. Thus Hive only has to go up 2% that year to pay for the yield. Is this unsustainable?
On top of all this you're not even factoring in inflation either. Everyone knows the value of fiat goes down. This can also be subtracted from the 20%. If you think inflation is 8% then 20% APR is really only a 12% return on value. And if that is true, that USD has been devalued 8%, then Hive token price should see an increase of 8% to reflect that, which is already magnitudes more than enough to pay the HBD yield.
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As long as the market is small enough that you have a central actor to conduct open market operations you can keep it within its bounds, so sure it can be an insignificant market that a few actors manage the peg but the moment it had any scale it would fall on its arse
Anyone with 15 minutes can head to an exchange and see that HBD is a roach motel with no natural buyers of any scale to get you in and out of it, 20% APR is fine like I said for someone holding a few bucks, but any reasonable size, it doesn't factor in the time decay it would take for you to unroll that position