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RE: DHF proposal to incentivize SWAP.HBD:SWAP.BUSD pool

3 years ago

In my understanding, the goal of this proposal is to mimic the Savings APR mechanism which should let liquidity providers earn interest without keeping their HBD on saving accounts (and thus allowing them to provide liquidity on the stablecoins pair). Am I right? If so, I don't like the idea as there is already an incentive offered by the pool itself.

0.02495615 BEE

3 comments

@empoderat72

3 years ago

The point's not providing an APR to liquidity providers, it's more about 'incentivizing' a pool that will tighten much better the HBD peg.

For example, right now a simple 1000$ swap carries a 1-2% slippage, which is (if you allow me the expression) laughable.

We'll never attract enough liquidity without incentivizing it, and after this step is done, the black hole will just keep feeding itself.

More liquidity -> HBD peg tights -> HBD gains utility (as a 'better' stablecoin) --> more eyes on us & user expansion --> more HBD printing -> More liquidity -> (repeat)

We'll need more liquidity in orders of magnitude to make HBD work properly. This proposal is only a starting point.

Additional benefits:

Gerber already said that doesn't want retribution, and the code is ready. What better way to put the DAO's funds to work?
Taking the HBD.stabilizer as an example, we can always increase/decrease the funding as we see convenient.
Given that we're 'creating' a sink for HBD but also for BUSD, a pool with millions of BUSD into it could serve as a great starting point for @lordbutterfly to negotiate a possible HBD listing on binance CEX.

These are a few but surely I'm missing some. Bihg thank your for your work on the HIVE ledger app @engrave :)