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RE: Burning Mechanism Can Save Hive From Continuous Dumping || HIVE at $0.04
If the funds are not going outside the system, then where are they being spent? And what is causing so much selling pressure?
0.00009214 BEE
My understanding is that the HBD stabiliser funds are a notional amount, used to swap between HBD and HIVE in order to try to keep HBD reasonably close to it's $1.00 peg (provided the Hive Debt Ratio is under 30%, but that's a separate issue).
The selling pressure is a combination of several factors - like all such things, there isn't a single simple answer.
The first is inflation, because we effectively print HIVE at will to pay author, curation and witness rewards.
The second is people extracting funds from the ecosystem; a mix of DHF funds used to pay for proposals other than the HBD stabiliser (some good, many bad, and most with no business case that explains the claimed benefit in financial terms), Hivers powering down and taking their HIVE onto exchanges to turn into cash, and witnesses pulling out their witness rewards in order to cover their server costs (and again, some don't, and some pull out far more than servers actually cost to run).
Finally, there's an overall feeling in the wider market that crypto-based investments have had their day, and that Hive isn't the exciting new thing it was a few years ago. Which is why I keep arguing that we need to be meeting real world needs using the blockchain but without actually making a point of saying it's crypto.
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