Attention Keynesian Meddlers - SBD Floor ("Non-Peg") Is Working As Designed
First, let's get something out of the way.
SBD isn't pegged. It has a price floor. That price floor is a minimum of $1 of Steem via the conversion tool. This has always worked, would be working now (if implemented to the UI again), and will theoretically always work. SBD will never be below $1, at least not materially, or for any substantial period of time.
There, case closed. The "peg" is not a peg, it's a floor, and it's working as well now as it always has. You are demonstrably wrong if you think otherwise. You disagree with reality. /Thread.
Now, let's get one more thing out of the way. The Steem White Paper is not a bible (and, it's a bit long.) Just because something is in there, doesn't mean it's gospel. 52/104 week power downs and exponential whale-voting are also in the white paper. How come I don't see arguments for reviving those artifacts? Clearly, the existence of something in the white paper does not make it automatically correct nor immutable (unlike the blockchain itself.)
However, let's continue and make the great concession that SBD is "pegged", even when that is demonstrably false and it is not pegged and has never been pegged, it merely has a price floor.
If you think SBD is (or should be) pegged, and you are complaining about how the peg is broken and not getting fixed, you're blabbering on without having the faintest idea of what you are talking about. The "peg" is working perfectly to normalize the price of SBD and has already cut price by 85% in the last 3 months.
That's it, end of debate. SBD are working perfectly. The increase in supply as more people are posting to receive the higher value payouts has massively inflated the supply and market cap of SBD, leading to an 85%+ crash from around $15 to $2.25 today.
Even the precious whitepaper specifically disavows two-way conversion. Without it there is no, and never was, a peg.
I don't know what else to tell you.
Don't be like Krugman.
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No, it isn't pegged, but there is no clear argument that it is falling because the system is working to get SBD down to $1. It is more likely to be tracking the general trend of the market. SBD has nearly identical trend charts to all 30th-50th place coins over the last month. When you consider that a dozen other coins, including Dogecoin, have had the same price movements, it becomes hard to argue that the value of SBD is being driven lower by design.
Consider the proportion of each day's reward pool that prints in Steem vs SBD.
Right now, it's twice as much value roughly in SBD. It was previously 3x (maybe higher? don't feel like mathing) as much at the recent peak.
It's pretty hard not to draw a line between "massively increasing over-supply (by value)" and "massively decreasing price".
However, I cannot disagree with the chart comparisons. I think the proof will be when SBD doesn't resume a bull run past the old peak while most other coins do, owing to its (future) much higher supply.
Good points, thanks.
I don't think that is unreasonable. I would probably draw that conclusion as well if the trends were so consistent. The market is pretty tightly coupled right now, especially SBD and Steem. I think better proof would be if we saw a divergence of the two. That's what I am hoping for.
It's also worth noting that:
If people get more than they should, they will not complain :-)
Good thing if SBD is fixed at 1$, it could be competition to bitUSD and Tether.
Get out of this nonsense and fantasy of competition to bitUSD and Tether, a traders only true friend to maintain value is a conversion back to respective fiat, whether that is USD, GBP, etc,...These pegged base assets are doom to fail or out fraud, for now there isn't system within crypto that can maintain the legality of pegged asset...The other narrative of appeal to vendors is another fantasy and nonsense story, SBD is far better off as a floating currency with a guaranteed floor of 1 USD and imaginable upside, lets the traders, speculators and investors determine its value and innovation within the Steem ecosystem give it more use case...We have this fantasy that writers/ bloggers/ vloggers give Steem ecosystem value or add further value, that's nonsense, its the traders, speculators and investors, the bloggers/ writers content to add value, Steem has to a be a subscription base platform where readers readily pay fees to access the content...
Great SBD rant! While I don’t understand the inner workings of this market, I can certainly tell from where I’m sitting that the SBD don’t need to be messed with. They seem to be working just fine for my taste and I’m happy to see them to continue operating this way moving forward! Thanks for the post!
Great read, thanks.
I love this! @lexonical SBD is never pegged. It rather have a floor price of 1$. I got that!
"The steem whitepaper is not a bible and is not immutable unlike the blockchain" - coming to think of it, wouldn't it be a good idea to have it on the Blockchain in an updated version ? When I search I can only find the posts dating from 5-7 month ago (or from 2016). Too bad there's not a more active thread around the current code base and how it should be described in an up-to-date version of the whitepaper.
There is an updated version, check this post:
https://steemit.com/steem/@steemitblog/a-radically-updated-steem-whitepaper
Thank you but I was indeed referring to the August 2017 version, not the previous one from 2016.
My impression is that even the August 2017 one is not completely in line with the actual codebase running.
"The steem whitepaper is not a bible and is not immutable unlike the blockchain" - coming to think of it, wouldn't it be a good idea to have it on the Blockchain in an updated version ? When I search I can only find the posts dating from 5-7 month ago (or from 2016). Too bad there's not a more active thread around the current code base and how it should be described in an up-to-date version of the whitepaper.
“The "peg" is working perfectly to normalize the price of SBD and has already cut price by 85% in the last 3 months.”
In the context of the overall market correction this seems a bit of an exaggeration. When normalized against STEEM a bit of a different picture emerges. The floor appears to be the price of STEEM and not $1 of STEEM. Do you believe this is this is a psychological level at which point the market forces step in?
Yes, I think in the short-term, the market is irrational, and can stay that way longer than you can remain solvent. In the long-term, I can't see any explanation for SBD remaining above $1 worth of converted Steem, especially given how fast the total supply is increasing.
You are correct this mirrors the general correction. The proof will be if SBD can resume a bull run when other coins with actual projects/uses do. I think it if does, it will end in tears for speculators. We'll see.
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Thanks for the information, i have learnt a lot on this post and my doubt has been cleared. Now i know better why beloved SBD goes fluctuating. Nice