syeem dollars

The Steem Dollar or Steem Based Dollar (abbreviated SBD) is an asset intended to be pegged to the United States dollar. Steem Dollars can be traded at cryptocurrency exchanges, and used for payments for goods and services.

There is an internal market on the Steem blockchain and integrated in the Steemit website where STEEM can be traded with Steem Dollars and vice-versa. Steem Dollars can also be converted into an equivalent-value amount of STEEM in a process that takes 3.5 days.

Steem Dollars which are held receive an interest rate. This rate is set as a variable collectively by Steem witnesses. This rate is often 0%, but it may fluctuate. If Steem Dollars are being traded below parity with the US dollar and the supply of Steem Dollars is not too high relative to the liquid STEEM supply, the interest rate may rise.

While nominally "pegged" to the US Dollar, the Steem system along with the volatility of cryptocurrencies make this goal difficult to maintain. Witnesses are empowered to manipulate the value of the SBD currency to return it to the peg; however, dips above and below USD parity are common.