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RE: ✴️ SBD IS $0.58! IS STEEM BACK DOLLARS DEAD? ☠️ ☠️ ☠️
It's not dead unless STEEM is dead too. If STEEM recovers to 40 cents then SBD would be pegged back to $1. This price target for re-pegging declines along with the supply of SBD. It was 41.5 cents several days ago. So even if STEEM just stops dropping, SBD will eventually recover (though in that situation it may take a while).
The SBD system was designed to drop off the peg if STEEM declines too much (in a crash type situation as we have had), but it was also designed to recover, which it is in the process of doing. The latter requires that STEEM not continue to crash though.
All the whales were bitching when the authors were making more money last year with pumped up SBD pricing so they added more supply to SBD and looked what happened...
We need to just remove SBD completely, if it can't hold a peg then it's worthless anyway and it's something people can point at as a weakness to our platform.
Let’s remove it ourselves... do u know how to hack it? Jk 😂
Posted using Partiko iOS
hahhaha, i wish
No change was made to the SBD supply until after its price had already returned to $1. It was discussed but there was never consensus to take action. It was the pump itself which created the oversupply, not the later changes (even with the incremental supply from the code change subtracted out, we are still in the haircut zone now).
Also your theory of pointing fingers at Steem whales doesn't explain why BitUSD reached its 'global settlement' at almost the exactly the same time that SBD reached its 'haircut'. In fact these systems have limits which recent extreme bearish conditions in crypto markets have reached. They are designed (we at least hope) to bend and recover rather than completely break.
There are many things about Steem which don't work well or at all, starting with the flagship feature of rewarding content/contributions. This is all a work in progress, and improvements have been and will continue to be made. Many of us believe that SBD has enormous potential and is deserving of the same sorts of efforts to improve it rather than removing it (for which no known viable method to do so exists anyway).
Why was the SBD supply increasing so fast last year when the prices were high? I was watching the supply go up super fast. I assumed it was the witnesses changing some settings to try and get SBD to go back to 1 by issuing more SBD's.
There's really no need for SBD. We can just use a calculator to calculate the amount of Steem needed for any given transaction, just like all the bitcoin merchants do. Also there are already stable coins that actually hold a peg out there like TrueUSD, why not just use those?
There were no witness setting changes whatsoever. A couple of witnesses did attempt to do so but all witness settings are subject to a vote (or median function in the case of price inputs) and it takes more than two witnesses to make any difference.
The high rate of supply growth was a function of the high price of STEEM (so large reward pool) coupled with SBD being overvalued. Normally (when SBD is priced about $1), there is a dynamic balance bewteen SBD being printed and SBD being destroyed by conversions. However, when SBD is way overvalued no sane person does conversions so the supply just builds up.
Those coins have counterparty risk and have 'features' which enable the custodian to freeze your coins. They also require using other blockchains with inferior scalability and the need to pay transaction fees in another coin (so if you want to buy some TUSD, you also have to buy ETH just to pay fees). The former is a different tradeoff (meaning there is room for both) and the latter is just a product with a much worse user experience.
Why not just use a calculator like the bitcoin merchants do?
Also what is your discord name, i didn't find you under smooth.
People want to HOLD some stable value (at least for short to intermediate periods). There is at least 2 billion dollars in stablecoins and it is one of the most rapidly growing segments of the cryptocurrency market both in terms of market cap and new projects working to address it.
Merchant might be another use case but just not having the value of your coins change by 10% +/- per day is enough of a reason to want it. Actually, this relates to merchants too, since most of the Bitcoin merchants immediately convert to fiat (or have their payment processor do so). They can't or don't want to risk losing 10% of their revenue on a Bitcoin dump.
I'm registered as smooth but I don't sign onto discord much.
Do you use skype?
Yeah that all makes sense, what do you propose for the SBD going below $1 like now.
Unfortunately all I can propose is wait it out. That's both a short term and a longer term answer. Short term SBD is in the process of righting itself, like a flooded boat with a bilge pump running.
Longer term, the volatility of the underlying backing assets needs to decline some. SBD (nor BitUSD nor NuBits, nor probably DAI, etc.) can not tolerate an environment where the backing asset routinely drops 95% in value and has single days of 20-30% drops. But when we get to the point that volatility of cryptos is similar to gold or stocks, if perhaps somewhat (not insanely) higher, the core asset will still too volatile for most people and businesses to want to hold it directly as a short term store of value (as opposed to longer term investment or store of value) but systems like SBD (maybe not exactly the current SBD, as it still needs some work, but something not far from it) built on top of those assets will work much better, perhaps never failing at all.
Thanks for you input! Should the witness try change the rate or is it to early or do they care anymore? 😀
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Witnesses care and are watching the situation closely. At this point it appears that SBD is working as designed and intended without any immediate witness action. It is slowly recovering on its own from very nasty market conditions which require resorting to some degraded service (reduced peg target) for a period of time until STEEM recovers or at least stabilizes.
Great comments @smooth 👍
Posted using Steeve, an AI-powered Steem interface