I guess Hive will go below the haircut price soon ….
.0413
What happens next ?
https://coinmarketcap.com/currencies/hive-blockchain/
In the Hive cryptocurrency ecosystem, the "debt haircut" (or haircut rule) refers to a protective blockchain mechanism that prevents the algorithmic stablecoin, Hive Backed Dollar (HBD), from becoming an unpayable debt.
The mechanism operates and affects pricing in the following ways :
:1. The Debt Ratio TriggerThe Hive blockchain monitors a debt ratio, which is the total supply of HBD compared to the overall market capitalization of the native HIVE token. The system is designed to keep this debt ratio safely below 30%
.2. What Happens When the Limit is ReachedWhen the HBD debt ratio exceeds 10% to 20% (depending on specific on-chain parameters set by witnesses), the blockchain progressively reduces how much new HBD it prints.Once the debt level reaches a critical threshold (like 30%), the "haircut rule" is fully triggered.
The system stops printing new HBD completely and breaks the fixed $1 USD peg.3.
The Impact on the HBD PriceUnder the haircut rule, if you attempt to convert your HBD into HIVE on the network, the blockchain will artificially discount the value of your HBD.
Instead of exchanging HBD at a full $1.00 value, the haircut forces a write-down.For instance, if a 20% haircut is applied, your HBD will be valued at $0.80 for the conversion, effectively forcing holders to take a financial loss to restore equilibrium to the system.
To get an idea of where the market currently stands, it is helpful to monitor the exact supply levels.
