RE: Should SBD Be a Pegged Asset? If So, When Should We Peg It?
thanks for the detailed article, @lukestokes. A stable currency definitely has utility and value for a community and I would like to continue down the path of incentives and trying to find potential losers when SBD is much greater than $1.
The Minnow (as an author)
Steem(it) has a retention problem and much of it is b/c new users never make their first $5. With a high SBD price, this helps minnows the most and hopefully they will see rewards to incentivize them to stay around. Also, the majority of their rewards are paid out in a liquid asset. This can literally change lives. Check out my dude @bendollars and how excited he and his family are with his first payout. Think about what an extra $5/day could do for some people. SBDs offer this opportunity. https://steemit.com/introducemyself/@bendollars/my-first-steem-payout-experience-on-steemit-and-more-expectations-bendollars-24-10-2018 This is a winner b/c of the high SBD price.The Minnow (as a curator)
Simliar to the argument above. Community growth centers around minnow engagement and retention. A $0.25 comment could now be worth $1 b/c of the high SBD price. This is a winner b/c of the high SBD price.Whales/Dolphins (and their tribe)
That $0.05 upvote you give someone actually means a lot more. You can support more of your tribe/community without taxing your VP. This is a winner b/c of the high SBD price.Investor/Speculator
Look, some people will buy anything in this crypto market. These are the losers of gambling on an asset that should be at $1. You want your community to have a strong currency. Don't fall in to the Keynesian fallacy. While I agree that having a pegged asset is great, it's mostly great because of protection to the downside. If someone is willing to buy something from you for more than it is worth, then I believe it's a gift. Let them buy overvalued assets and let those who have more knowledge benefit from the additional time and experience that they have. These are the losers b/c of the high SBD price (assuming it eventually normalizes).
Conclusion:
By artificially restricting the up-side of SBD, you are hurting the community and it's ability to self fund at the expenses of speculators. This most notably hurts Minnows opportunities to make their first few dollars or rewards (especially in a liquid asset).
Thanks again for the great post :)
I agree Steemit has a retention problem, but I'm not sure STEEM does. It's an amazing cryptocurrency. I'm all about changed lives, but I also want to ensure people actually understand where the value comes from. It comes from investors increasing the value of STEEM which increases the rewards pool and the $ number people see on their posts which gets them excited about Steemit. You mention currators, but they are actually losing out with a high SBD price. People use bots for self-voting instead of curate because there's a better ROI there.
The Keynesian fallacy warnings are important. I'm certainly not wanting to artificially control anything. What I am trying to do is avoid boom and bust cycles which I think a broken peg allows for. If the SBD peg worked in both directions, that manipulation wouldn't be possible and the market cap of STEEM is large enough to not be easily manipulated compared to SBD (though it still needs to grow much larger).
Speculators would still be giving us a gift, we'd just be able to collect on it quickly as we convert STEEM to SBD to get more if it. Since the SBD could go right back to STEEM again, it wouldn't be creating new money out of nothing. That's the theory, anyway.
As to your conclusion, I do think it has validity. What I also see is people start to expect SBD to be worth something high. They hold it as it goes back to $1 instead of obtaining STEEM which (IMO) has a much, much higher upside. I want to get more people thinking long-term, not short-term. That's where the real value is. If they can't speculate on that future value, they they shouldn't speculate on a broken pegged coin either. It would serve them best to hold a stable coin.
Great comments, @ashe-oro. Thanks!