What can Hive learn from Terra?

in #hive-16792218 days ago

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I've been doing some research about Luna and found some interesting things. Luna was discovered by South Koreans and has a variety of applications running on it but that's not even it.

Just like Hive, Terra had a humble beginning and then it suddenly exploded into this juggernaut of a platform in a short time. The major reason for that is the evolution of the relationship between Luna and TerraUST.

You see, just like Hive Blockchain, Terra is also a DPOS platform. Investors vote for validators with their tokens and they in turn validate new blocks and keep the platform working.

So in essence, validators on Luna are pretty much like witnesses on hive. These validators create proposals that ensure the smooth running of the blockchain and one of the pertinent tasks is the stabilization of UST stable coin.

Again, the algo-based stable coin is yet another parallel that Hive has with Luna. As you already know, both UST and HBD offer the highest stable coin interest rate of 20% APR.

Parallels

Luna's recent woes with managing the stable coin peg due to extreme volatility at the whim of whales should be a lesson to the hive community as a whole. We need to watch these events unfold and take a cue from them.

Just like UST, the HBD peg has been wobbly for a while. We've largely been within 10 cents of the peg in extreme conditions of volatility and within 2 cents of the peg on a normal day.

What we know for sure is that stable coins are here to stay and their importance cannot be overemphasized. The ability to create an Algo that ensures a stablish coin can lead to multiple opportunities springing up.

For example, thanks to the availability of UST, Anchor, a project running on Terra Blockchain, offers a whole 20% APR for staking UST there. Yes, the APR is exactly the same with hive but that's beside the point.

The point is that opportunities abound when you can actually get your stable coin to actually be pegged to the required amount. On Hive, we need to be able to ensure that HBD is as stable as possible.

UST hogged the spotlight when 20% APR was offered on Anchor. However, HBD offers the same thing, so it is only a matter of time before people start asking questions and showing interest.

Whenever the crowd comes, we need to ensure that we're hovering around the peg and in the process, ensure we have a stable coin that can have widespread utility.

Assuming we were able to sort out the stable coin situation on Hive, HBD could easily perform a role in remittances. We could consider having Hive debit cards for day to day transactions and generally just ensure that HBD, like UST, has a direct impact on people's lives.

Working the peg

At the time of writing, HBD is within range of the peg. However, as long as it is less or more than $1, we're not going to move forward.

Considering the fact that UST and Luna's surge to a project worth over $15B were tied together due to the Algo on Terra that is managed through a form of arbitrage trading between both assets. I believe that Hive also has the potential to rise to prominence in the same way.

Luna's rise from about 60 cents to peak at around $103 is the stuff of dreams. However, hive, with our own algorithm based asset that's also connected to Hive coin, has the capacity to rise to astronomical heights as well.

For now, though, the interest in Algo stables will probably take a hit temporarily. However, moving forward, Algo stables will be the order of the day.

We need to ensure that HBD is setting itself up to be at the forefront of the future league of stable coins. With a monthly APR of 20% and strong community backing, HBD like UST has the potential to bring massive success to Hive.

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It will be a great thing if we could get HBD to be as stable as possible by learning from this Luna experience that we are having now.

I just hope we do something about this. Thank you for sharing this with us dear.

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You mention the parallel between both blockchains in the light of the UST/terra debacle. Does Hive/hbd can suffer the same fate if we get to that level?

I do not know the technology between terra/UST but I know with Hive or hbd there is a locked mechanism that hold hbd for couple days and hbd is purely back by hive. If burned hive will be created and vice versa.
Terra is taking a huge hit at the wrong time of the spectrum. It could be the scapegoat of the relationship between stablecoin future for many.
Every time an action is happening by many at once always shows the negative light instead of the viability of the system.
Maybe I need to know more about Terra cause it is losing steam like a hot air balloon.

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Terra also has a lock mechanism but theirs is 21 days . The attack comes from liquid terra and whales manipulation in the market.

How about UST? Does it has a locked as well?
It is way way from the peg.
I can understand the terra situation suppply and demand effect.

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I know you can earn 20% APR when you stake it on Anchor but that's about as much as I know about the locking mechanism. I'll do some research on it.

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The LUNA/UST downfall is a harsh reminder of what can happen to.. well, anything in the crypto world. For now, HIVE/HBD is small enough to not have anything close to such a problem, but I do wonder what would happen - it'd also mean HIVE went crazy popular, so count me in for that experiment 😂

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We'd be so damn rich bruh lol

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I don't like it when the hive has to learn from some shitcoins, on the contrary, Terra has a lot to learn from the hive)

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Fair point. Although I was just pointing out how keeping the HBD peg is important moving forward

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I did not mean to offend you, these are just thoughts out loud about how I feel about what I love. In this case, to Ulyu). Other authorities cease to exist)

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Oh I'm not offended bro, I think you're right because there's a lot they can learn from Hive.

I believe the presence of VCs is hurting Luna as well.

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Thank God), I'm glad, you know, I tend to think that we are strong if we put everything in priority - the Hive, without compromise. Always, and at all times, it worked for the benefit of the one who treated his idea in this way. When a beginner reads that the hive is not yet perfect, that he still has much to learn, this can create a reason for distrust. This is what I'm talking about in general terms. But, we are adults and we understand that studying never hurts)

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One of the main lessons for HBD is that it should not hold reserves of BTC only, but some USD as well.... basically a mix between dollars and btc ... one for the bear and other for the bull :)

Volatility cannot back volatility

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Yeah build the value of HBD and stop trying to back it with value from elsewhere.

That is the mistake everyone is making.

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yes absolutely necessary if you want a successful algo stable coin. This mitigates any point of attack.

Stable Kwon(One of the major Terra devs) was talking about backing the UST peg with Bitcoin and I kind of figured that was destined to fail, especially since this event seems coordinated.

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Hello! do you see coincidences in what happened with TERRA with what happened with WAVE before?

Let's hope that the regulators don't come in now all heavy handy and try and destroy everything.

Thanks for the Luna information. I like knowing the background of things. I saw your post on ListNerds because a ListNerd member shared the link to your post in an email. If you are not already a member of ListNerds, you may want to consider joining and get the same benefits as the person who shared your link. I would love to see more of your posts.

I'll check it out kind ser. I think I've signed up already though

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Terra may also use DPoS for governance, but when you consider Do Kwon's unknown pre-mine and whatever other VCs/insiders were gifted, it is not the same as Hive.

Token distribution is the key to DPoS governance and having that pre-mine makes this system of governance completely obsolete.

Okay, I'm expanding on this discussion into today's blog ;)

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It is true that a stable coin like HBD will bring many benefits to the chain, especially for the development of DEFI projects.

The question is, will the control algorithm be able to maintain parity when these scenarios are presented? You have to anticipate this and take security measures to shield the system.

Thanks for your input.

Unfortunately, you cannot create algorithms or incentives that can stop people from going against them when the shit hits the fan.

Algo stablecoins are ripe for exploitation, it's just the new grift to recycle capital within one chain and create fake volume and trades for your token.

If a 40 billion dollar liquidity pool with 1.5 billion bitcoin with pools of mixed stablecoins can't pull it off, then I think its safe to say this trend is done for.

This massive blow up is only going to see algo stablecoins regulated Janet Yellen has already spoken about it, Luna is the perfect reason to regulate this faux euro dollar market.

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In summary, this is a monumental clusterfuck

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how you feeling belemo? You alright today?

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Hi Mykos, I'm just getting by. The .market really hurt me bad

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yea that sucks.. bbd coin is working on some type of bailout plan for terra luna, if it works that may give some of them relief

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We deginately need to analyze the Terra Luns situation carefully and learn from it to compare our vulnerabilities.

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