SBDs and the Reward Pool.
Taking take time away from my fun project #adoptaminnow to talk about SBDs (Steem Backed Dollars)
Currently the price of SBDs is at around $9 on Bittrex. This is interesting because the price of SteemBackedDollars is supposed to be pegged to the dollar.
*my bad art
Quick Info you should know to follow the conversation:
- According to our documentation and marketing, SBDs are pegged to a US Dollar. (1 USD = 1 SBD)
- The Blockchain treats SBDs as if they are worth a dollar.
- When you post it pays out it pays as if the peg is working.
- Currently 50/50 payouts are based on SBDs equaling a dollar, so content creators are getting a bonus if they sell SBDs at the current prices.
The Peg works to hold the price of SBDs UP to a dollar, but there is nothing to push the price back down except "Market Pressure". (Selling)
I have seen a couple of posts advocating that the Whales should self-upvote so they can sell the SBDs and push the price closer to the peg. This approach does not make sense to me, because YOU can sell your OWN SBDs.
There are theories about why the SBDs are high, but the Market has currently priced SBDs at about $10 (nobody knows why for sure)
There are mixed feelings about trying to correct the price of SBDs, one reason to try to correct the price is because it looks bad to say our SBDs are pegged when they obviously are not. (Reputation)
Here is the problem with that concept, there is nothing to hold the price down and if the Market decides to pump them again we still have a broken peg. Making this entire argument shaky in my opinion.
My opinion is to let the Markets naturally handle the price of SBDs instead of taking actions to correct them.
Regardless of what anyone else chooses to do, be aware that your SBDs are more valuable right now and if you want to sell them and you don't know how you might wish to seek this information out right now. Nobody knows how long this will last. Many users are using this opportunity to sell some SBDs and Buy Steem Power. I have wondered if that is helping our recent price increase.
Here are some of the antics going on:
Automated Self-Voting (on checkthisout the rewards are hidden in the comments and replies)
https://steemit.com/@rewardpoolrape
https://steemit.com/@checkthisout
Here are some of the other opinions on how to handle this:
https://steemit.com/steem/@demotruk/how-to-enforce-the-steem-dollar-peg-by-self-voting
My advice is just to be aware:
Make your decisions based on your own financial goals.
Check with the Witnesses that you vote for to find out what their views on SBDs are.
If you don't understand all of this, join a trusted community and find a mentor.
Ask questions, but remember you have to trust the person who is guiding you.
My Personal Actions:
I am selling my SBDs because I don't know how long this will last and it is in my best interest to sell at the high prices. I am powering some of the profits up and adding some of it to my "Investment Funds" for future projects I want to invest in. SMTs/Communities
I am treating the site the same way I treated it before.
I do flag obvious abuses from time to time, but even as my account is close to in the top 1000 accounts the biggest impact I can make is a few dollars.
Enjoy, I was hoping to create a simple explanation in laymen terms, please provide feedback below.
Let me ask, what would hurt more steem reputation?
A - Having a 1$ pegged blogger reward currency which has no roof?
B - Demonstrating that steem is not really decentralised and that some big players can manipulate price on their own by stealing the reward-pool?
If I had known about answear B before, maybe I wouldn't have put my money into steem.
It seems some whales are intentionally hurting our Reputation. I just don't understand how they are missing the big picture.
i would say leave the market to regulate and correct itself, atleast it shows no one owns the market and it also give the minnows to earn more thus encouraging them to invest more on the steemit network,
There is a force that brings the price of SBD down, that is the law of supply and demand. The price/market cap of Steem determines how much SBD is issued (as well as short term changes in voting behaviours). The price of SBD going higher than $1 gives holders of Steem Power extra purchasing power which they can use to remove Steem from the market, thus increasing the price of Steem, thus increasing the supply of SBD's and lowering the price.
Agreed so it is good idea to teach our New-Users how to get the most out of their investment.
What will happen if it goes up again? Will we just have everyone upvoting themselves each time?
We can go back to flagging each other for taking the rewards for ourselves. We'll see how it works out in practice. There is of course risk involved in breaking the taboo on self voting, but those who bought SP with the excess PP will have more power to downvote when the peg is back to normal.
Yes, it is going to be interesting for sure. I am for people using their stake, I am also for people flagging!
So yes, it is going to get interesting.
It has fallen from the $15 that it usually roams around but it is still high where it caused an increase in new members traffic which came spammers , and what not . But I’ll take it :P
Agreed that it was hanging around the $14 mark.
It may have impacted new users coming into SteemIt.
For those wanting to know how to trade their SBD for Steem on the internal market, this guide walks you through it easily:
https://steemit.com/steem-help/@sykochica/answering-common-questions-how-to-exchange-my-steem-dollars-for-steem
Hey Everyone, Here is the guide on how to sell them if you don't already know.
I am captain obvious, and I approve this message.
lol
i use to transfer to steem until i read this a few days ago , now i get more using the internal market, this was acoin saver, wish i had found out about this earlier
I’m loving this bonus! We know it will go back down but honestly it’s lasting way longer then I thought!
Btw thank you for getting into this! Many don’t talk about this enough. It’s great seeing someone so respected discuss!
With my limited knowledge of the trading world 😉 I would prefer to let the market work itsself out. Even if we think we know what happens with an 'artificial' correction - we don't.
I have seen a couple of posts advocating that the Whales should self-upvote so they can sell the SBDs and push the price closer to the peg.
XD XD XD
That's the worst idea I ever heard. lol
Your 20 SBD "bill" art is amazing BTW, I really enjoy that. I am with you that the best thing is for all of us to keep using Steem normally and just enjoy the extra money.
It seems like the only reason SBDs are worth so much is that some group of people is buying LOTS of them - who knows why. It might be a convenient way for them to store funds, since it's such a small circulation of tokens.
I'm not complaining, that is for sure :-).
Me either not only are the extra rewards nice, I didn't expect it to last this long.
I wrote About those high SBD prices a couple weeks ago. I agree with most of what you wrote, and I am enjoying the post payouts as much as anyone, but there are other stakeholders to consider besides just the content creators. I don't advocate doing anything different at this point, but I'm not sure what purpose SBD serves if it can't hold the peg. It's starting to seem like useless complexity.
At any rate, from your post, this is important advice:
Agreed, I was writing this to the minnows and because of the BS some whales are pulling to try to justify what I would consider to be excessive self-voting.
However, I support their ability to do what they want with their stake, but I also approve of the community using flags to sort that out. :)
I think that sooner or later we're going to have to get over worrying about what other people do with their stake. It's probably just a matter of time 'til some app comes along that obscures its data before storing it on the block chain and controls who can see what inside the app. If you can't read it, how do you even guess at what to downvote?
I've been saying for a while that I think an upvote only algorithm modeled after a second price auction might be a better way to discover post values. That's what Google uses for Ad-words. Of course, too many people here are locked into the downvote way of thinking for that to be a realistic possibility in the foreseeable future.
So... as long as we have flags, I agree that they're there to be used.
I'm helping minnows by writing guides about Steemit and people keep asking me about the correct division of payouts. This has been confusing but pleasing for whatever we are getting paid because at the end of the day, we're getting paid more than what we are supposed to be paid based on that pegged amount of SBDs.
Regarding SBD price, I'm 100% agreed with you:
This could be one of thee major reasons why the SBD price went up in no time and keeps staying there..
Lastly, this art is good and you should keep trying it more often:
Very good post @whatsup. Shared.
Awesome ur doing this! Thank you 👍
I'm also taking advantage of the high price to sell, but I do not want the price to go down, I'm just being cautious.
I do not understand the people who want the price to go down, by reputation? We are in a totally unstable market like that of cryptocurrency, in any market in the world if an action was lowered by more than 90%, like the price has done the BTC a couple of times, nobody would trust him, but this is not a common market, people here know that prices fluctuate and are not always the same. I do not believe at all that people outside Steem, see this as something bad, rather I think it benefits them, that's why it went up in price.