Data On HBDStabilizer | HBD Received And Sent To The Hive.Fund

in LeoFinance3 months ago (edited)

The @hbdstabilizer account is trying to bring back the peg of the HBD to the dollar. It receives HBD from the DAO/DHF and sells it on the internal market for HIVE and then sent that HIVE back to the @hive.fund, where the HIVE is being converted to HBD.

It has been doing this for two months now, as the first time the @hbdstabilizer received funds was on February 20. Let’s take a look at some data and the performance of the account.

01.png

The @hbdstabilizer has been controversial at times, because some of the other projects that were funded from the @hive.fund, stopped receiving funds and all the available daily budget was redirected to the @hbdstabilizer.

A reminder the DHF can pay a maximum of 1% per day of the available HBD in the fund. It can’t go higher than that. Because of this and the increase of the value of the HBD, more funds were needed to bring the HBD price down. In the process all the HIVE that was sent to the fund is instantly converted to HBD, increasing the HBD in the fund, and increasing the daily available budget.

In the last days it seems that more projects are funded again because of the larger daily budget and most of them implemented a code, where they return the excess HBD if the price of the HBD is above the one dollar peg.

Funds Received

First let’s take a look at the received funds. Here is the chart.

02.png

As mentioned, the @hbdstabilizer started receiving funds for the first time on February 20, 2021. At first it was 2.3k per day then up to 7.2k per day, and constantly increasing up to 23k HBD per day.

In the period above the @hbdstabilizer have received a total of 715k HBD.

Funds From Posts Beneficiary

Apart from the @hive.fund, the @hbdstabilizer is receiving funds from posts beneficiaries as well. There is a post on every few days and plus comments that are voted on and those rewards go to the stabilizer account.

Here is the chart.

03a.png

Note for the purpose of simple presentation all rewards are presented in HBD equivalent value.

We can see that the rewards from the post’s beneficiaries started a bit later, at the end of March. At first the value of the posts payouts was around 400 HBD per day, but then it grows to more than a 1000 HBD per day.
In the period above a total of 20k in HBD equivalent was transferred to the stabilizer from posts beneficiaries.

Funds Sent To The Hive.Fund

We have seen the funding of the @hbdstabilizer now lets take a look at the funds that it has sent back to the fund.

First the HIVE transfers.

04.png

As mentioned the @hbdstabilizer sells HBD for HIVE on the internal market and then sent the HIVE to the @hive.fund where it is instantly converted to back to HBD.

We can see that at first there was around 20k HIVE per day sent back to the @hive.fund, and then at the end of March it started to grow reaching 70k HIVE per day.
In the period above a total of 2.1 million HIVE was sent to the @hive.fund from the @hbdstabilizer account.

HBD Transfers
There are some small amounts of HBD transfers from the @hbdstabilizer to the @hive.fund. These are most likely the beneficiaries rewards. There is a total of 23k HBD sent to the @hive.fund in the period.

Total HBD Equivalent Value Sent To The Hive.Fund

If we convert the HIVE sent to the @hive.fund into HBD and add the few HBD transfers we get this chart.

05.png

Disclaimer: I have been using the historical price of the HBD to HIVE conversions. Not totally sure what price the @hive.fund uses for instant HIVE to HBD conversions. If someone know the details let me know in the comments and if wrong I’ll correct the chart and the numbers.

With the ratio for HIVE to HBD used as above, we can see that at first the HBD added to the @hive.fund was in the range of 5k to 10k daily, but then it went up reaching almost 50k on one occasion. On average in the last days the amount of HBD added is in the range between 35k to 40k.

In the period above there was almost 1.2 million more HBD added to the fund from the @hbdstabilizer. If we compare this with the 715k HBD received its almost a half a million difference in HBD or 70% more. This again using the conversion ratio as mentioned and the numbers can be wrong.

At the moment of writing this there is 2.7 millions HBD in the fund, meaning a 27k HBD daily budget. A few month back this budget was less than a one million HBD. The @hive.fund has grown its available daily budget significantly in the last months, more than double, or almost triple.

The @hbdstabilizer has a big impact in this, but its not the only one, the slow conversion of ninja mine HIVE to HBD is happening with around 38k HIVE (20k HBD at current price) added from that as well, and the overall inflation. The increase in the HIVE price has also a part in this.

Anyway its interesting to see the impact of the stabilizer on the fund, and it has been overall positive. The fund now has a healthy amount of daily budget, that keeps on growing and can fund in parallel the projects and the stabilizer.

All the best
@dalz

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Very nice report! While I've been able to estimate the value from these proposals by looking at the hourly transfers of HBD from hdbstabilizer to hive.funds on hiveblocks.com, it is helpful to see all the data summarized in one place.

The beneficial results of the proposals were predictable, but still quite impressive! In a short period of time, it seems they will result in profits in the range of DHF's entire expenses for last year.

Thanks!
I'm wondering will we be able to suport hbd on the down side as well, when the time comes.

If we are able to figure that out, we could very well have a nice income for the development fund and buying pressure for hive. Hive is looking bullish😃, not only because of the global bullrun of crypto, we are turning into a very different ecosystem.

I think conversion mechanism mostly does this already, except in case where we approach haircut limit.

It seems there is some time left on the present proposals, so it is presumed that this will continue, at least up until the next Hard Fork?

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I plan to submit renewal proposals, especially for the first one which was only originally scheduled for 90 days (about 30 left) when it was initially very experimental.

Even after the hard fork there is likely a role to play, because the hard fork only attempts to peg the upper value at 1.05. Between 1.00 and 1.05 the stabilizer can still help, and still earn a profit for DHF. Of course, under those conditions, the rate of profit will be lower, but if there is available budget after other important projects are funded (as has historically been the case, even with a much lower budget), why not?

There are some small amounts of HBD transfers from the @hbdstabilizer to the @hive.fund. These are most likely the beneficiaries rewards

The beneficiary rewards are treated the same way as DHF funding, so HBD is traded for HIVE as long as HBD is overvalued.

The reason some HBD got sent back is there were periods when HBD was not overvalued. So under those conditions, HBD received from DHF and beneficiaries is sent back right away, and HIVE that ends up in the account (mostly from power downs of HP beneficiary rewards) is used to buy HBD, which is then also sent back.

Also, i think the graph after that paragraph is missing.

Ok, thanks for clearing that out ... About the chart, I decide to remove it and just put the overall numbers in, since it was not much of info in it ... but obv, I forgot to delete the sentense :) corected now

P.S. Have you thought about an oposit operation, if hbd needs suport on the down side?

I think it is less needed for now since we have HBD to HIVE conversions, and also I think the goal of witnesses should be sustain enough demand with interest that HBD being below 1.00 should be rare (but will still happen on occasion). For multiple reasons that hasn't happened so much in the past but should be better handled going forward.

I might still consider it though. Already the stabilizer does do a bit of HBD buying when it gets HIVE from powering down HP, but this is relatively small.

So the stabilizer is both... stabilizing HBD and making profit for the Hive Fund. That seems great!

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And putting buy pressure on Hive tokens. It has purchased 2.1million hive!!

Yup, very important!

Yes

It appears to have added a lot to the DHF which is spectacular.

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Indeed! And the great thing it is that I don't see a scenario where it could go wrong.

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I see the HBD Price is going to be corrected soon

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I was just over in the proposal section and I saw some for this project but I didn't bother voting for them because I didn't really understand what they were doing. This post helped me a bit with that. I will have to jump back over there and check it out again.

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Really amazing.

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Disclaimer: I have been using the historical price of the HBD to HIVE conversions. Not totally sure what price the @hive.fund uses for instant HIVE to HBD conversions. If someone know the details let me know in the comments and if wrong I’ll correct the chart and the numbers.

You're fine. IIRC, it should be about 19:30 UTC every day, takes the active feed price at the time for the HIVE > HBD conversion.

I'm pretty curious about the actual price effects on HBD. The whole scheme only works to bring down the market price of HBD if the HBD that is sold on the internal market makes its way into the Korean exchanges that were the sources of the pump. The entire idea is to make arbitrage profits from Korean (or whoever) traders on external exchanges.

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Yes it needs arbitradge and most likely it is happening, otherwise we will see a hbd to zero on the internal market, with such a low liquidity.

Might take a look at the data for hbd transfers.

They are doing hard work to stabilize Hbd

Very nice review of a complicated topic. It will take a couple rereads for it to all sink in, but the bottom line success is notable.
Thanks

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