I see people shared a couple good formatting links. Most Hive front ends primarily utilize the “markdown” language for formatting, so finding general tutorials on that are largely applicable even if they’re not Hive specific.

The price of HBD is essentially just determined by the free market, however it is now designed to stay very close to $1 USD. There has always been a “downside” peg because from the beginning there was a mechanism in the base layer of the blockchain that allowed 1 HBD to be converted to $1 USD worth of Hive. Obviously when HBD strayed too low people could buy it up, convert it to $1 worth of Hive and profit off the difference!

With the most recent hardfork there is now also a mechanism to convert Hive to HBD, so with conversions in place both ways there is now also an upside peg due to the arbitrage opportunities it creates. If HBD trades up to $2 people will be waiting to convert $1 of Hive for $2 worth of HBD and sell!

So, since the blockchain defines HBD as always being worth $1 USD, market forces keep it pegged there. Every witness maintains a “price feed” showing the current market price of Hive, and that information is utilized in the conversion process.

Short answer; the code of the blockchain always values 1 HBD as $1 USD. Because anyone can freely swap between the two currencies, any deviation from $1 in the market creates a profitable arbitrage opportunity which brings HBD back to the peg when taken advantage of!