Since hive is a fork of Steem, it has the same features as Steem. And one of those features is the two currency system, Hive and Hive Dollar. Hive has two states, Liquid Hive and Powered Up Hive.
Liquid Hive is called just Hive and Powered Up or staked Hive is called Hive Power. The other currency Hive Dollar is always liquid.
Hive Dollar is meant to or expected to always have a 1:1 US Dollar backing. It is supposed to be a stable coin, a coin that always follows the price of USD.
But that is not the case. The system that ensures the dollar peg is fragile. Hive Dollar often goes below the 1 Dollar peg and sometimes goes above the peg.
There is two ways we can solve this. One is to re-brand it as Hive Cash or something like that so that it is no longer associated with the peg.
The second is a strong mechanism that forces a 1$ peg. I am not sure if the second is possible though but the devs might find some intelligent ideas to solve that.
The current status quo is not helping hive. When investor see that a token isn't doing what it is expected to do, they are less likely to invest in that token.
And occasional large pumps show that market demand can easily break the peg. Well, Hive Dollar trading at above 1 USD is not the problem. But when it goes below 1 USD, it becomes a huge problem.
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I'd personally prefer to see Hive Dollar function as a stable currency. That is, it should be spent, not HOLDed by investors.
If Hive Dollar can truely become a stable currency, it will help Hive attract ecommerce payment solutions. Online stores generally won't accept volatile cryptocurrencies that go up 300% and then go down 200%.
I think the Hive community should discuss this issue thoroughly to come up with a solution that is good for the ecosystem.
I am open to hear out what readers think of this? Feel free to leave a comment.
