Currently, the SBD pool is "insured" by "effectively" holding a certain amount of STM which limits the available amount of STM. This would be fine EXCEPT when STM goes down, the SBD pool "effectively" immediately "grabs" any necessary additional STM.
This proposal does a one-time destruction of STM rather than a constantly open flow. You can also buy up SBD with STM and reverse the operation but, once again, the transaction is frozen at the instant of completion -- not subject to the constant variance in value of STM.
Note: I suspect that the above explanation is what led Dan to believe that I don't understand SBD creation and destruction. The point is that it is the perceived total Market Cap of STEEM + SBD that is generally perceived to be constant. If that is true, any increase in value (or payout) of SBD affects the price of STEEM. The converse, of course, is true as well. EXCEPT the interest payouts on SBD are far higher than they should be which is a drag on the entire system that shows up only on the STM side.
Currently, the SBD pool is "insured" by "effectively" holding a certain amount of STM which limits the available amount of STM. This would be fine EXCEPT when STM goes down, the SBD pool "effectively" immediately "grabs" any necessary additional STM.
This proposal does a one-time destruction of STM rather than a constantly open flow. You can also buy up SBD with STM and reverse the operation but, once again, the transaction is frozen at the instant of completion -- not subject to the constant variance in value of STM.
Note: I suspect that the above explanation is what led Dan to believe that I don't understand SBD creation and destruction. The point is that it is the perceived total Market Cap of STEEM + SBD that is generally perceived to be constant. If that is true, any increase in value (or payout) of SBD affects the price of STEEM. The converse, of course, is true as well. EXCEPT the interest payouts on SBD are far higher than they should be which is a drag on the entire system that shows up only on the STM side.