Crypto Academy Week 6 - Homework Post for @yohan2on Professor || Stable Coin (SBD)

Hello comrade @yohan2on, much greetings to you and thanks very much for your hard and selfless work in the various Crypto Academy Homework Professional Lectures you have taken your precious time to teach us. I missed out the previous Crypto Academy Homework due to the recent work load I was trying to complete. But now, I making to share my homework for this 6th week and the subsequent ones that you will prepare for us to work on. Also my greetings to @steemitblog, @steemcurtor01 and @steemcurator02; thanks for your great support with upvotes!

---

On Stable Coins, I would like to talk about Steem Backed Dollar (SBD) as one of the Stable Coins I'm much conversant with.

What Steem Backed Dollar (SBD) stand for in Crypto currency Exchanges & Market Hub?

Steem Backed Dollar as abbreviated as SBD is Steemit Stable Coin created and pegged to the US Dollar in the ratio of 1:1 such that it would help stabilize the "steem coin" which originally is the Steemit liquidity tradable in Crypto market.

In this case the value of steem Dollar ideally should be equal to $1 but due to volatile nature of crypto and high inflation that crop in, the price of Steem Backed Dollar(SBD) keeps fluctuation. However, this is minimal compared to the Steem. It doesn't frequently depreciate its value compare to other unstabilize coins.

Currently, the SBD is valued about 6 times the Dollar($) rate. But at first it was around $1.1. I think this explains why the SBD is Stable Coin.

In what parameters define that Steem Backed Dollar (SBD) is Stable Coin?

Ability to Match and Appreciate the Coin that it's pegged with.

The Steem Backed Dollar (SBD) has remained stable in Crypto market since last year 2020. It was around $1.1 of the Dollar rate and now keeps appreciating the Dollar well, though slight fluctuations occur but doesn't effect its value in relation to the dollar rate. As at now it holds between $6 and $7. This make the SBD very strong making Steem platform to be get slight stability.

Way back 2019 Steem platform was facing little hyperinflation which led the SBD depreciated against the US Dollar rate. However, much initiatives are putting in places to promote Steem Stable Coin.

The Pros of SBD as Stable Coin to the Steemit Platform

One of the most interesting part of Steemit platform as Decentralized application is having Stable Coin like SBD that is able to support Stern when it loses it value due to volatility of Crypto market and hyperinflation. When the prices of Steem decreases, Steemians have hopes of getting SBD as compensation to fill the gab of price lost. This keeps Steemians motivated to continues mining ( creating content and curation). Now, the price of Steem is low as $0.62 of the Dollar rate but the SBD is $7.4 of the Dollar rate. In this case, when a Steemian set his post to 50% reward, the Steemian is being paid with only SBD and Steem Power(SP). Since the SBD has high value, the Steemian gets more Steem when he converts to Steem to be exchange in Crypto Exchange platform for Fiat Currency.

Again, having strong Stable Coin like SBD make Steemit Community very strong. More people would wish to join platform with strong back force of Crypto coins. This also attract more investors and miners into Steemit Platform. Many people are out there who would want to set financial freedom for themselves and their families so, if they have Stable Coin like Steem keeping the Community strong, they will definitely contribute their support.

Cons on The part of SBD as Stable Coin

To every liver is attached with little bile. This would help to give a balance motion to prevent complacency. As the SBD is high value now compare to the US Dollar rate, it's also very difficult to get more reward of SBD. The demand for it is very high but its supply is very low. In percentage, the Steem Power is 70% increased compare to the SBD. This is because, we need more power to influence the Steem Community. We need to have a long time plan than a short term, where most Steemians would love to convert their SBD to Steem and cash out as much as they get as reward. When it comes to holding Steemit Community, it's the Steem Power that support strongly compare to the SBD , since it's very difficult to instantly cash out Steem Power, but SBD can be converted instantly.

Conclusion

In summary, the SBD continues to be the Stable Coin in Steemit platform stabilizing the frequent volatile of Steem price. It supports Steemians when Steem is low and compensate members. It also motivate members to share their contents in Steemit platform.

Image Links:

https://bitexchange.systems/stable-coin-development-company-agency/

https://appinventiv.com/blog/stablecoins-explained/

https://www.coinbase.com/learn/crypto-basics/what-is-a-stablecoin

Cc:

@steemitblog
@steemcurator01
@steemcurator02
@yohan2on