The Music and Money Show Replay! Interview with @buggedout talking SBD's, Coin Raffles and more!
If you missed it live you can catch it now. My conversation with @buggedout, he's a talented steemian and an Aussie to boot!
Listen in as we talk about everything from the SBD to the impact of the debt level and on into silver, gold and the monster raffle!
► Listen on DSound
► Listen from source (IPFS)
Thanks again @scaredycatguide I've resteemed and will see if I can get a few of my regular followers to give it a listen.
Might seem a bit like preaching to the choir though! :)
I've plugged it on discord for you too.
Great interview with @buggedout. The audio seems to stop at around 28 minutes though, so couldn't listen to the rest. The download also fails with a network error on Dsound. I'll try again on the other link.
My question is whether or not the free market (external exchanges), and no SBD produced by post rewards above the 10% debt ceiling would negate the SBD haircut, seeing as nobody would be using conversion anyway (especially if it remains disabled on the front ends)?
The reason the peg didn't hold is that SBD is freely traded on exchanges, and that's where the pump happened. The platform really has no control over the price of SBD, and can only produce more of less SBD to try to have some influence on the price. If the conversion was implementing a haircut of, say 90c in the $, nobody would use it anyway while they could still get their $1 for it on the exchanges.
I may be misunderstanding the principles of the haircut scenario here... am I missing something?
There are other ways to do the conversion. Easiest I've seen so far is via steemconnect or steemworld.org and there have been around 180K SBDs already converted since the purge began about 10 days ago. Maybe on average about 15K-25K per day.
If a haircut at 90c was applied due to high debt level then conversion would still be happening if the external markets were pricing it at below that 90c level and I personally think that it is likely that once the market realises SBD will not be supported at $1 it will be sold off further than it already has.
Yeah, I've seen a few conversion tools out there. What I'm saying is the incentive to convert is zero as long as the exchanges have SBD at a higher price than the conversion price. The market has to move down below the convert rate for conversion to be viable.
So as the debt ratio goes up, does the haircut scale up linearly until you get 0 for your SBD at x% debt?
I can see how this could put downward pressure on the SBD price from a price confidence perspective, and prices on the exchanges could follow it down I suppose, as long as those trading in it are well informed.
Because there is no bidirectional conversion, while the SBD price on exchanges is higher than the conversion price, conversions, in theory, would stop until enough SBD is sold off to get down to the conversion price. That , I suppose would reduce the debt ratio (if STEEM remains constant), and so start to push the conversion price back up some way. But if the STEEM price also keeps falling, the conversion price could drop significantly quicker I suppose, and so the haircut could end up looking more like a military buzz-cut....
I don't think you will ever get 0 for your SBD unless STEEM itself goes to zero. The haircut is enforced to ensure that the debt level never actually goes beyond 10% of the market cap. Think of it this way - If the debt level tried to go to 20% then that's double the 10% threshold, so the haircut would be half the regular conversion at 50 cents.
My main concern is the reputational damage a haircut like this would have on STEEM / SBD in the long run. May as well ditch the SBD at that point since it'll never be taken seriously as a stable coin again.
Good points. Let's just hope STEEM doesn't go down too much further then, and the haircut scenario doesn't come into play , or it will take a lot for confidence to come back into the platform.
Loving the convo gents. To take a high level view. I am yet to see a peg/currency manipulation that works effectively in the long run. The unintended consequences always rear their head. Thus, my overall feelings on the viability of SBD is mixed. If anything, maybe SBD needs to not be available on external exchanges and just STEEM is. Then these initiatives may possibly be more effective. That scenario isn't exactly a reality though.
That sure isn't the reality, butnit could be... bidirectional conversion at the peg....
Sorry you had audio issues. I just gave it a listen and it played through so who knows. You got all the SBD talk so that is good :-)
Yeah, I'll try again on another connection. May have just been my Internet. I was enjoying it, want to hear the rest.