I think that we have many Hivers who depend on rewards for income, which has had a downward pressure on the price as they have to sell to pay for living expenses. By having a stablecoin and paying interest, we might be able to shift some of that sell pressure into converting to HBD, which itself pays interest. This income, compared to Hive rewards, is more stable. 10% interest is decent by most financial standards. Getting closer to 20% interest on HBD, I think, gets close to killing the goose that lays the golden eggs.

As far as the debt cap, it could be a non-issue if we raise the overall value of the Hive network. If Hive were to hit $1 Billion in market cap, we are looking at $100 Million in HBD. That's still not a lot for commerce.

Tether is $69 Billion
USDC is $29 Billion BUSD is $12 Billion DAI is $6 Billion TUSD is $1.4 Billion

Hive is sitting at around $265 Million. Even if we raise the debt limit to 100%, we're not talking a lot of money for commercial purposes.

We should focus on increasing the value of Hive. I could see maybe setting the debt limit to 20%. If we go too high, we risk the security of the network. We should not lose sight that what gives HBD value is the underlying Hive. So, we need to focus on maintaining that value. We should proceed in 2% increments as there are likely unexpected consequences in maintaining the peg at higher levels of debt. I get the sense that upswings in HBD price at higher debt levels could prove highly deflationary for Hive as we recently saw.

Posted Using LeoFinance ^Beta