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     7 years ago 

    The white paper does not say it explicitly but on page 11 it says:

    The primary concern of Steem feed producers is to maintain a stable one-to-one conversion between SBD and the U.S. Dollar..

    How is this done? There is only one price that is fed to the blockchain...the price of Steem. So the blockchain does not have a way of "knowing" what the market price of a SBD is. The code only takes into consideration the steem price feeds and there is a reason for it.

    Let's assume a wild scenario:

    • The total supply of steem is 300 million.
    • The total SBD in circulation is 10% of the supply (30 million)
    • The market price of steem is 1 USD
    • The market price of SBD is 20 USD (or 600 million market cap)

    If the conversion of all Steem Dollars were to happen at the market price there wouldn't be enough steem to make the conversion.

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     7 years ago 

    This makes sense as a possible explanation, but it must be explicitly stated somewhere. I’ll keep digging.

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