I don't understand your response. I clearly stated that I think that HBD is a derivative and, therefore not debt. I just pointed out that the definition that you are using is a strict one. If I lend a friend some money I expect to be repaid but I am not necessarily expecting interest on top of that. Anyone will agree that my friend is in debt. That falls under a wider definition of debt.

My point is that under a wider definition, someone may argue that HBD is debt. I do not agree with that argument...not entirely. I remember Dan Larimer stating in one of his posts (way back on the legacy chain) that the network was lending the value of a dollar to SBD holders. That statement struck me as really odd, especially from the guy who designed the chain. I don't think that he understood what he was designing.

The argument that HBD is debt stems from the fact that the holders of the token can (at any point in time), broadcast a conversion operation that compels the network to issue the dollar value of HBD in the form of HIVE. That is the argument. Arguing that HBD is not debt because it doesn't fit a strict definition misses the point.

On its own, HBD is an instrument to short HIVE. If you buy HBD with HIVE and, later on, convert it at a lower price, you end up with more stake in the network. The risk of doing this (in theory), is that the price of HIVE does not go below the initial buy point or that the "debt limit" is surpassed and you end up where you started (or worse). You can get the same outcome by simply selling high and buying low on the open market but, with conversions, you do not run the risk of moving the price too much, especially if you are dealing with big amounts.