You are viewing a single comment's thread from:
RE: The accumulate, pump, and convert strategy to show that the proposed two-way SBD peg can be abused
This thought crossed my mind when I learned of the potential ability to convert STEEM back to SBD. Seeing that STEEM is more valuable than SBD right now, and with this two way system, I can see a lot of people taking advantage. You'd think the witnesses planned on this happening but who knows what they think. Interesting idea you got there though!
STEEM being worth more than SBD isn't a problem with the proposed two-way SBD peg to $1. STEEM could be worth $100 and the proposed two-way peg could still work well. However, if you owned SBD and SBD was worth more than $1 then as soon as some people became aware of the two-way SBD peg going into effect then people who were still holding SBD thinking it were worth more than $1 would lose money, but that isn't an issue with the proposed two-way SBD peg either because that is the only reason the witnesses are considering the proposed two-way SBD peg because they want the SBD to be a stable currency pegged at $1. The big problem with the proposed two-way peg is that it would enable people to buy and sell huge quantities of STEEM without directly impacting the market price and this could enable the proposed two-way SBD peg to be abused.
So would it be wise to hodl STEEM and not SBD then? I've been sitting on my SBD because I've been used to getting more STEEM out of it, and I've been waiting to purchase STEEM because I'm hoping it goes back down a bit, but that may not be the case. If I'm reading this correctly I should probably try to get more STEEM, especially if SBD is going to be pegged at 1USD
The two-way SBD peg at $1 is just something the witnesses are considering so it may or may not happen. However, if the two-way peg does go into effect then SBD would likely go to and stay pretty close to $1 so if you think the proposed two-way SBD peg is likely to be implemented, then it would make sense to sell SBD now before it goes to $1. However, even if they don't implement the SBD peg there are lots of reasons to think SBD will go back down to $1 anyway so if I was holding a lot of SBD right now I would probably be in a hurry to sell it at its current price of $3.
Thanks for the information :)
Ahh ok, that makes sense. I am still new to all this and definitely trying to understand how all of it works. Thanks for the distinction