SBD Overvalued - Facts and Advices for Changing Crisis to Opportunity

in #sbd3 years ago (edited)

The demand is huge

A recent high SBD price caused discussions and actions. Here, I looked at some facts and will suggest some advice to help SBD pegging as well as promote Steem.


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Fact 1: Daily SBD volume is 1.7x than SBD market cap

As for now, 24h SBD volume is $2.6 million. Meanwhile SBD market cap is $1.5 million. This implies there are numerous demands for SBD, much more than supply. We are not sure why, but suspiciously being related the collapse Tether. Rising Steem price can be another reason. The important thing is that SBD is getting highlighted now.

Fact 2: Daily SBD volumn is 20x more than daily SBD creation

To peg the price, most simple solution is increasing supply. There are both good thing and bad thing. A bad thing is daily creation of SBD is much smaller than market volume. It is around $1,000/day, and if we recover a normal reward level it will be around $3,000, which is still 1/9 of market volume. However, the good thing is that the creation continues at least Steem price goes down (SBD printing is stopped if its market cap is over 5% of Steem).

Fact 3 :Some conversions still exist

This is very irrational thing but there were 1,748 SBD converted. This is bad for individuals since they missed market premium as well as SBD pegging since it decreases SBD supply while never decrease demand.


This is a chance

The high SBD price is not from Steem community. I think it is caused by external factors. Some may think this is a threat to SBD pegging, but I think this is a chance. A high SBD price cannot harm our community. Only SBD buyers will bear loss while active authors gain bonus.
The one thing we have to focus on is Steem price. If we support Steem price, Steem market cap will increase, and hence SBD creation also increases, and helps pegging more. However, if we fail to support Steem price, the situation will be a vicious circle.

Here are three advices to make the current condition into a chance.

Advice 1: Don't convert SBD

If you convert, you will get $1, but if you sell you will get over $1.3 now. This explains all.

Advice 2: Don't choose Power-up 100%

If you want power-up, there is better solution that benefits both you and all. Sell your SBD reward, buy STEEM, then power up. You will obtain 10~20% more SP, and STEEM price will go up.

Advice 3: Try to be market maker

We are not sure this premium continues forever. We also have experienced weak SBD price just 6 month ago, discussing high debt ratio, price feed discount, converting SBD, etc. If you are willing to do, why don't you try to help SBD pegging? You can sell your SBD now (over $1) and buy when the price is lower than $1 (say, $0.995). As we have more potential supply for the peg, SBD price becomes robust.

Conclusion

To accomplish this, community-level action is needed, especially authors who are producers of SBD. Change crisis to opportunity with the community!

ADD:

One safer suggestion for SBD holders.

You can sell SBD at 1.x (e.g. $1.3). Then convert $1 to USD or fiat, and buy STEEM with the rest (e.g. $0.3).
For instance, if you sell 10,000 SBD, at $1.3 withdraw 10,000 USD and buy STEEM $3,000 amount.

In this way, you can keep your original money, get profit, and pump STEEM.

Sort:  

Using the internal market for SBD to steem exchanges is another option correct?

Yes, to reduce confusion I suggest avoiding using the word 'convert' for that. You can 'trade' or 'exchange' your SBD for STEEM using the internal market. This is better than using the 'convert' function, which will generally give you less STEEM (or SP if you then power up).

Haha ok, noted. Let me make some edits above. :)

I think so. There are bots connecting STEEM-BTC-SBD market (external exchanges) and STEEM-SBD market (internal exchange). If you sell SBD for STEEM in the internal market, bots will buy SBD from you, sell SBD in the external markets for BTC, and buy STEEM.

Do we know the identities of anyone running these bots? I would love to connect with them, as this is an important function of the Steem ecosystem.

smooth, for one.

Yes it's an option that will get you a good rate if you're buying STEEM. I don't recommend buying SBD with STEEM there though :)

Yea it does a good job of factoring in the market price of SBD for SBD to steem exchanges. I haven't used it going the other way much. :)

Glad I figured this out 1.5 weeks ago

Thanks for the explanation... I guess I have inadvertently being "doing it right," saving my liquid rewards and manually powering up once a month. Plan to continue contributing content, as much as my time allows!

One safer suggestion for SBD holders.

You can sell SBD at 1.x (e.g. $1.3). Then convert $1 to USD or fiat, and buy STEEM with the rest (e.g. $0.3).
For instance, if you sell 10,000 SBD, at $1.3 withdraw 10,000 USD and buy STEEM $3,000 amount.

In this way, you can keep your original money, get profit, and pump STEEM.

Thank you very much for the explanation!

Excellent post and advice @clayop.

With my understanding of things on this for awhile, I have actually been doing the things for awhile now, you suggest here.

Very good post by you to explain things to everyone.

Thanks for that.

Good market making opportunity! Good for my recent stockpile of SBD's.

Great analysis! that's what I have done and will continue to do so.

Guys! don't tick the power up 100% option, do it manually!!

Think before you tick!

Sound advice, just in time to sell a few SBD :)

Thanks!

Your advices are very good for STEEM and author's as well. Resteemed because they are important for all of us.

I sold a bundle of SBD at Poloniex when it has been at BTC 0.00115267 (USD 1.48) on April 25. Now I wait for the SBD rate of 1 Dollar the second day. It pauses around $1.22 and it is very tensing. I know it will fall down again. In the meantime, BTC is rising. Great game, @clayop. Thank you for your posting. You endorsed my recent deal.

thats the deal !! that the deal !! :)

One should be able to burn Steem to create SBD.

You bring some good points.

A high SBD price cannot harm our community. Only SBD buyers will bear loss while active authors gain bonus.

It can harm merchants who accept SBD as payment.

Actually, it could help them get a premium for their products and services. More merchants accepting SBD while the price is high and then selling to meet their business costs (presumably mostly denominated in fist) would add selling pressure to SBD and help stabilise it.

Opposite. They can earn more (paid with 1 SBD and get $1.3)