What is SBD: Looking for an official definition

in sbd •  4 months ago

I have just reviewed the steem whitepaper and the blue-paper in search of a technical definition of how SBD work.

Unfortunately from reading these the defintion is not clear:

From memory I understand that rewards are issued in SBD until we have about 5% of debt to market cap ratio.

When the debt is more than 10% the conversion rate is reduced, to avoid the blockchain to go broke over its debt.

I think it is important that there is an official description in some of the technical papers we have.

Did I just overlook where this is specified or does this truly not exist?  

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I'll try to explain this to the best of my ability. @tcpolymath gave me the best explanation asking to think of SBD as basically just "STEEM in a box".

SBD is a smart contract 5% of debt was actually changed to 10% at HF 20. Until debt is at 9% you can choose to receive half of your payout in the form of SBD. At the moment of payout, the SBD received is equal to half the worth of you payout. This is where the "STEEM in a box" come into play. When you convert your SBD to STEEM, it's like opening a loot box (or @steemmonsters booster pack) but without random elements. If you convert 5 SBD you get 5 USD worth STEEM. The existence of SBD has no effect on STEEM supply.

Instead of suddenly stop printing SBD, between 9% - 10% the SBD print rate goes down in a linear way. At 9.5% debt you get your payouts 50% SP 25% SBD 25% STEEM. After debt level hits 10% the amount of USD (worth STEEM) you get per SBD starts to go down.

SBD is basically a smart contract based financial instrument than an actual currency.

The current 13,574,053 SBD supply can be converted to 31,554,338 STEEM which means you get 2.324 STEEM per SBD with STEEM priced at 43 cents. If STEEM fall a lot more in price, not giving 1 USD worth STEEM per SBD will keep everything afloat.

Disclaimer: I'm not a programmer or STEEM dev. It's best to consult an actual dev for the job.

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Good summary. The latest details should be in the HF20 hardfork documentation where they messed up the way SBD works. For some additional information and a deeper analysis of what went wrong, what can be done and how to benefit from the chaos please have a look at my pre HF20 prediction link
(that became true all too soon) and my two recent posts on the current situation here and here.

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Yea it looks like this was just a bad mistake. Instead of allowing people to print SBD at will they increased the print rate and made it so that a haircut is virtually guaranteed. This unfortuanetly decreases the use of it quite a lot.

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Yes,
but allowing people to print it is also dangerous. There should be an 'inverse' haircut to make printing unprofitable at larger debt ratios.

I think we just need a more complex solution that allows for private collaterals for SBD. We can still allow the chain to issue SBD using a decentralised collateral. But that would be some work to implement and not be as easy as changing some numbers.

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I actually made another analysis (a little more complex this time) where I show that the peg is already broken already at 9% debt ratio where we are already printing sbd at full rate. This is a disaster!

Also buying right now and doing conversions will result in losses.

R

Would like to know more as well. I was not able to find further info on this.

Does anybody know more?

SBD is like tether or USDC. Its a store of value pegged to 1 USD. System always assumes SBD to be equal to one dollar no matter what the exchange rate is. This is the reason you can convert SBD for steem at pegged value even though its trading at .84$.

Now the reason behind it is simple. So you don't take money out of steem ecosystem. If you think that steem price is going to fall, you can sell your steem for SBD instead of dollar knowing that it will always hold its peg in the system.

Hope this helps.

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sorry but this is not correct. At the current time you CANNOT convert 1 SBD for 1$ worth of steem.

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I have 20 sbd lined up for conversion. It takes 3.5 days.
https://busy.org/@emrebeyler/let-s-save-the-sbd-peg

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Yes and unless the price suddenly spikes up you will not get 20$ worth of steem.

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Please read the article. Steem converts sbd at 1$ peg. Thr are multiple discussions on this and multiple tools

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If you don't believe me here is an article from markymark link

Other than that there is not much point in discussing, let's just wait to see how much steem you get.

Posted using Partiko Android

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That article is no information so i didnt quite understand how is conversion changed. Lets see how many steems i get.

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Screenshot 2018-11-26 15.25.58.png

As predicted you got less than 20$ worth of steem. For an updated analysis of the conversion mechanics and the problems please see this post

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I can tell you right now out of personal experience the peg is closer to 0.8 USD as of right now and I am quite upset.

what i know is SBD is pegged to $1.

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Only sometimes.

Thank you for posting the question and an even bigger thank you for the steemians that posted the very informative answers!
I have learned a lot again today!