What can Hive learn from Terra?
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.
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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