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RE: Should SBD Be a Pegged Asset? If So, When Should We Peg It?
@lukestokes: I have a very simple idea, but I am not an expert and thus not sure if it is working together with the existing rules:
Allow the individual user to freely set the ratio between SBD and Steem for rewards. Up to 100% SBD is allowed.
Fix the inflation of steem and keep the inflation of SBD variable.
If the SBD price is above 1 USD, people will ask for payouts 100% in SBD
Inflation of SBD would increase, hardly any new Steem would be issued.
This would result in significantly increasing vote values - and the amount of SBD issued would increase even more.
I am pretty sure that this would reduce the value of SBD to 1 USD pretty quickly and automatically.
What do you think?
Good suggestion and you can see that I suggested that in the github issue that was linked from the post. However, it has downsides in that liquid rewards don't encourage people to have a stake in the platform, as intended with 50/50 or 100% SP.
Note that we already do have a version of this. People choose 50/50 when SBD is more valuable and often choose 100% when it is not. So the supply adjusts, just not very much and not quickly enough.
I've heard this discussed as well, but here's my main concern: The blockchain itself is secured by SP holders voting in competent witnesses. If we disincentivized holding SP, we could in theory decrease the distribution of SP which could be seen as a decrease in decentralization and thus a weakening of the security of the blockchain. For that reason (and the no-commitment / spam concerns), I’d be strongly against a full SBD payout option. I think it could potentially create systemic risk by creating too much SBD too quickly. Maybe if we designed it in such a way that the payout option, on a blockchain level, is only available when the price of SBD is too far outside the peg... but that adds other complexities, like witnesses providing a price feed on SBD as well as STEEM.
I think that this would not create a problem. People would want to be paid in SBD not because they like the SBD but because it is the more profitable option. They would get SBD - and quickly transfer it to steem. Steam price would increase relative to the SBD, SBD would fall. People wanting to be paid in SBD is in my view not equal to people wanting to own SBD.
What about those who need stability? Either because they have to pay for real world services or because they are poor and should not be risking their value on speculations?
I think there would very soon be stability - because people would realize that the mechanism which brings down the SBD price is too strong to speculate against. At least I would think it would work like this.
I think we have to accept that all we can do is creating a mechanism which results in a peg if people react rational. For a real peg, you would have to make sure that the value at any tie is really worth exactly 1 SBD. For this to reach, there needs to be an arbitrage possibility. For example if could would have the opportunity to create new SBD at any time by paying 1 USD and to get your 1 USD back it would certainly be closely pegged to the USD. However, this is not possible and wanted I think. The only other way is to create a mechanism which is sensitive to the USD.
I think, if you would pay out the SBD part also based on its USD value as you do with steam, the price would sky rocket even more because inflation would go down massively.