RE: Bounty 20 Steem: Should we fix SBD?
I am in favour of a pegged SBD asset and exploring alternative proposals for achieving this peg. I welcome your proposal for further discussion and it may be a solution but there are some risks and additional dependency on Witnesses which I think adds an extra burden on the system.
Existing Mechanism
My understanding of the current mechanism is
- Witnesses only need to intervene when the value of the SBD is below the 1 dollar peg. They intervene by increasing the interest rate payable for holding SBD.
- If SBD goes above the peg the market will (in theory) drive down the price of SBD as it makes rational sense that more SBD will be printed so that people active posting on Steem/it will choose the SBD option and increase the level of SBD in existence.
By market law of supply and demand will drive down the price.
This second part of the stability mechanism is what is not working at the moment. In my view the reason this is not working is because the supply of SBD is so small at the moment. i.e. Liquidity is the issue.
The current design should work if there is better communication over the design as well as more liquidity in the market. The latter will come in time if nothing is done now. The former we can be proactive on.
the objective of SBDs is stability and without it they have no utility
I completely agree with this statement and if the decision is to not in any way maintain a peg, or seek to maintain a peg, or change the peg then SBD has no utility. If that is the case what is the point of it all and should it be removed from the protocol?
The proposal you have outlined carries with it some risks and puts more control in the hands of witnesses, in particular over what to do with the SBD. Burn it etc. Is this an extra burden that is being put on witnesses shoulders?
At the root of the issue here seems to me to be a lack of understanding of what SBD is in the community at large and what the long term goal for it is. I would like to see consensus achieved on what SBD is and what its purpose is before tackling the question of how to fix it.
- Is it a speculative asset?
- Is it a counterparty free pegged asset?
- Is it a mechanism for varying the amount of liquid rewards paid out via the reward pool?
- Is it a mechanism for inflating the Reward Pool (Dollar Value) on an ad hoc basis?
- Is it a tool for bringing in dollar investment from unknowing people on 3rd party exchanges?
Before we get answers to some of these questions and achieve consens on what it is intended for the path forward is not clear.
Just one last point I would like to add to the conversation
The reason is that any price of SBD above the $1 brings value into the ecosystem, without any direct cost
This is the view of the majority of people who I have seen discussing this on Steemit but I would make the case that there is a direct cost. The current lack of a peg allows people to extract a larger proportion of the dollar value of the post payouts in liquid assets immediately. i.e. the payout effectively is no longer 50:50. I see this lock in of value for a period as a huge asset to Steem and a major design strength. Of course if people power up their rewards it doesn't matter.
Is this something we should really leave to witnesses? Can the blockchain not handle what is needed without their intervention?
very help full post . https://steemit.com/altcoins/@shuvosarker24/goldman-sachs-bitcoin-has-potential-to-drop-below-february-low-of-usd5-922
In addition to the cost you outline, which i agree with is the non function sbd and therefore lack of its utility. Again I feel this could be a 1b fuckup at the moment but likely even much higher. What do u think is the value of a stable currency in a 400b market?
Not sure I follow the question exactly but this graph shows the daily Volume across different coins with market cap gt 1bn
*full size image
The big blue dot in the middle is the daily volume on USDT which clearly shows a large appetite for a pegged asset.
The issue with SBD is the market cap is around 30m with a daily volume of close to 10m (today). I wouldn't me surprised if it was just downright manipulation keeping the price high. Steem volume (the underlying asset has a 14 million daily volume, that doesn't add up). If SBD had a market cap in the 100s of millions then I am speculating that it would be more stable. But it's never going to have this until we have some way of trading it outside of the Steem System. We need wallets and ways to spend it.
At the moment part of its utility is supposed to be as a trade-able liquid asset but you can only spend it on Steemit with the exception of using it to speculate on exchanges.
You have a much better grasp of the Facts of the Matter than the writer of this article. UV ;)
Here's what I added in my buried comment way down there LOL
Again, you do not understand how SBD works. SBD inflates NORMALLY, nobody is "doing something about it." You're just seeing the payouts from new posts, derp.
What's with the derogatory statements? I'll be the better man here and let you take the low road, I have other points to take you to task on. Below...
This was a good read.
Let me lead with - I wouldn't use a silver dollar at McDonald's on the dollar menu because, even though the tender is intended to represent $1 USD, the melt value is much higher.
It's worth nothing, upvote bots may have some role in lack of pegging to $1 USD. By sending 1 SBD to a upvote bot, the return right now is approximately 1 SBD + $ 1 USD worth of SP under a stable value scenario (before curation's cut). The reality is of course, there is a likelihood of ending up with less SBD than sent to the bot originally, this is due to fluctuations in market price during the seven day period and timing of when upvote bot lands on the post. However, when I use these services, there is some reasonable expectation of receiving most of my SBD back under stable 7-day value, receiving some Steem, and the value of inherent post promotion.
Let me know if you agree or disagree, but it seems like pegging the USD value would be difficult when the upvote bot rate of return on 1 SBD is so attractive.
The value can go up or down and your taking a risk when you you use an upvote bot. So even if todays value gives you return of $1 you may or may not get that and the one dollar is the fair reward you get for taking a risk. I see this is a slightly different phenomenon than the pegging of the SBD asset.
I agree that voting bots have a role to play in the pegging issue but I don't see them as a cause. People are exploiting the voting bots to maximise how much they can extract in daily rewards from the $ denominated reward pool.
Thanks for the perspective.
I agree with this~
While I do like pegging it. I also like the returns from bots, even if its just for the SP.
马马虎虎吧
"This second part of the stability mechanism is what is not working at the moment."
ORLY???
Do you normally ignore facts before posting? Or is this a special case as you have some agenda?
"SBD has no utility"
Except allowing us to cash out from posts without waiting 13 weeks. Just that tiny little utility.
"I see this lock in of value for a period as a huge asset to Steem and a major design strength."
Oh, well, there's your problem. You like market controls and think an asset that forces you to wait 13 weeks isn't screaming from the rooftops how weak it is because it literally needs to FORCE YOU TO HOLD IT.
SBD is going to 0?
For the record I have no agenda other than promoting the growth of Steem.
You are taking him almost completely out of context with the "SBD has no utility" pejorative... Here's the context:
That entirety changes it all up, but you do make a good point about "not needing to power down" which is a 13 week process. If we dispense with SBD and "the peg" to U$D then our 50/50 could be Steem and SP I suppose.
Steem provides this utility. Ie if there is too much SBD in circulation the blockchain pays rewards in SP and STEEM. So that is not a utility of SBD. What SBD provides right now when it trades above $1 is higher rewards. But the intended utility of sbd is non existent when the peg is not working.
Agreed, but I still think that the embedded market control system of SBD issuance is slowly bringing about the "peg" that would show STEEM is a stable and marketable cryptocurrency. The ballooning supply of SBD is bringing down prices faster than any other moves and as explained by your boi @lexicomical, this is simply from the higher post rewards. Looks to me that the system is working rather well. I'd just be interested to find out if this is by original design or a result of HF19 or a prior hardfork.
@knircky
very impressed
un entretenido aporte
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very help full post . https://steemit.com/altcoins/@shuvosarker24/goldman-sachs-bitcoin-has-potential-to-drop-below-february-low-of-usd5-922
uwu