LeoGlossary: Virtual Supply (Hive)
On Hive, the virtual supply refers to the amount of $HIVE potentially available. This includes both $HIVE in circulation along with the amount that could be created from Hive Back Dollar (HBD) conversions.
Each HBD can be converted into $1 worth of $HIVE. Depending upon the price of $HIVE, this equates to a certain amount for each HBD.
An example is the market price of $HIVE of 50 cents. This means that each HBD could be converted to 2 $HIVE. Thus, 10 million HBD would add 20 million $HIVE to the virtual supply.
If the price of $HIVE moves higher against the USD, there is less of a virtual supply. The opposite happens when the price moves down.
This is only a potentiality since, for it to be reality, the conversion mechanism has to be utilized.
Also, since a large portion of HBD is locked in the Decentralized Hive Fund (DHF), it is not eligible to be converted and should be backed out of the numbers pertaining to this.
General:
Posted Using LeoFinance Beta
