Read on Twitter
(1/5) Thread: The beauty of the @HavenXHV protocol mint and burn system is on full display today. A user is offshoring their wealth to a stable asset privately. Good for them, that is exactly the intended function of the system. $XHV $xUSD https://twitter.com/HavenTreasury/status/1347362813644304385
(2/5) What’s important to note is that in a bull market these moves can compound to accelerate an extremely deflationary movement in the Haven supply. This can’t be unlocked for a week, and the user may very well not care about making a trade on it.
(3/5) But if the price has increased to any significant extent, and the xUSD is used to mint back into XHV at a higher price, that supply difference is effectively lost.
(4/5) Now keep in mind on the other side of this is that the reverse effect could happen if the market turned bearish. But the key point is that a different perspective is needed when evaluating price movement of Haven when compared to other assets.
(5/5) It could theoretically experience large value swings even without affecting the overall market cap of the system. This is an interesting dynamic to pay attention to over the next months as these larger and larger moves are only likely to increase in frequency.
Check out the Haven Teams’ network analysis tool for a live display of the current state of the system. http://network.havenprotocol.org
