Problem: HBD may soon be illegal in the US.
Legislation has been proposed in the US House of Representatives that will make HBD illegal. If it becomes law, then issuing, using and allowing the use of fiat-based stablecoins will become illegal in the US without the explicit approval of the Secretary of Treasury. HBD easily fits the definition of fiat-based stablecoins as defined in the bill.
Options:
- Ignore it and pretend like nothing has changed.
- No change to Hive/HBD, prepare for legal fight. While nothing will happen immediately, we can expect that eventually there will be a crackdown, likely targetting witnesses.
- Remove HBD from Hive. Perhaps all HBD will be auto-converted to Hive.
- Request approval from Secretary of Treasury and hope we get it
- Repeg to non-fiat index.
For me, it is clear that the first 4 options are not options at all. If we cave on HBD, we will likely end up caving every time the law is changed to hurt cryptocurrencies. Fighting the legal battle directly would be very costly at this stage, especially for the witnesses on Hive, we are still too small to attempt this.
The following are 4 steps required to repeg HBD, which I think is clearly the best option available, should the law come into force.
Step 1: Define the new index.
For example it could be 10 commodities weighted equally by dollar value. It could be called something like the "Commodity Currency Unit". It should be publicised widely in the crypto space as an open standard, and other cryptocurrencies would have the option of using it as a peg as well, increasing the potential for interoperability between chains with a common unit of account.
Eg. Copper, Oil, Zinc, Aluminium, Gold, Corn, Wheat, Coffee, Sugar, Oats - 10 cents of each commodity for a total of $1 of commodities.
Step 2: Decide a repegging date.
Eg. 1st January 2022 at 00:00:00 UTC
Step 3: Determine the physical weights of the index.
On the repegging date, the weights of each commodity is determined based on current price, published on Hive, and the top witnesses vote to approve it (doesn't have to be anything more than an informal vote, eg. comments saying "I approve the new index for pricing HBD" on the post).
The index might be 1 milligram of gold + 100 grams of copper + etc. etc.
Step 4. Witnesses price Hive according to the new Index
As long as a supermajority of the top witnesses agree, their nodes switch to pricing Hive by the index instead of directly in dollars. Witness nodes determine the value of the index in dollars. They then divide the price of Hive in dollars by the price of the index, instead of reporting the price of Hive in dollars as normal. They can update their index price as often as they chose to, more often is better, but their index price never actually has to be published to the blockchain, only the final price.
Optional Step: Rebrand HBD
Rebranding would bring new attention to HBD while minimizing confusion for those who research HBD only to find old explanations of how it works. My personal suggestion would be "Commodity Dollar", it is simple while also be a self-contained explanation of what the token is.
Conclusion
Repegging is a relatively simple way we can avoid the problem of fiat-based stablecoins becoming illegal in the US in the near future.