Why isn't "convert" being used more right now? Should it be added back to the steemit web interface?
I think this is interesting, and it goes to show I either really don't understand a fundamental part of how STEEM vs SBD economy is supposed to work. Since last night, SBD has been trading below the magic $1,- mark.
Now what I would expect to see right now would be the economic incentives towards pegging kick in. The convert command (that has been removed from the web interface but is still available through the API) should allow for using the blockchain for converting SBD to STEEM at an exchange rate lying above that of the market. And if we look at the convert transactions since SBD started dropping below $1.000, there is something happening.
| Time | Account | Amount |
|---|---|---|
| 2018-08-13 22:31:42 | @smooth-f | 66.622 SBD |
| 2018-08-13 23:31:42 | @smooth-f | 66.622 SBD |
| 2018-08-14 00:31:42 | @smooth-f | 66.622 SBD |
| 2018-08-14 01:31:42 | @smooth-f | 66.622 SBD |
| 2018-08-14 02:18:33 | @smooth-f | 66.622 SBD |
| 2018-08-14 03:18:33 | @smooth-f | 66.675 SBD |
| 2018-08-14 04:01:36 | @eonwarped | 229.000 SBD |
| 2018-08-14 04:18:33 | @smooth-f | 66.788 SBD |
| 2018-08-14 04:41:03 | @livingfree | 1.000 SBD |
| 2018-08-14 04:41:45 | @livingfree | 1.000 SBD |
| 2018-08-14 05:18:36 | @smooth-f | 66.830 SBD |
| 2018-08-14 06:18:36 | @smooth-f | 66.830 SBD |
| 2018-08-14 07:12:30 | @isnochys | 1.000 SBD |
| 2018-08-14 07:18:39 | @smooth-f | 66.898 SBD |
| 2018-08-14 07:32:09 | @cryptonized | 100.000 SBD |
| 2018-08-14 08:18:39 | @smooth-f | 304.994 SBD |
| 2018-08-14 08:46:39 | @demotruk | 1.000 SBD |
| 2018-08-14 08:47:09 | @demotruk | 282.186 SBD |
| 2018-08-14 09:18:42 | @smooth-f | 304.994 SBD |
| 2018-08-14 09:42:12 | @doctor-cog-diss | 80.001 SBD |
| 2018-08-14 10:18:42 | @smooth-f | 424.078 SBD |
| 2018-08-14 10:31:09 | @emrebeyler | 0.500 SBD |
But then, these are just a hand full of accounts converting amounts of SBD that are rather small compared to the amounts we would expect to be needed to drive the market back to peg level. I thought this would be a great opportunity to see convert based pegging in action, but the rate of convert usage and more importantly the volume of SBD is nowhere near the volume I would expect from this mechanism.
This could mean one of multiple things:
- I really don't understand how SBD pegging is supposed to work
- Most people holding large amounts of SBD don't know they can get above-market prices for their SBD by using convert
- Without an option to do so from the steemit user interface, most people holding large amounts of SBD don't know how to use convert
If it is #1, please enlighten me on this subject. I'm interested in learning how this stuff works.
If it's #3, should convert be added back to the steemit web interface?
How do you use the API?
Install steemd and use the CLI wallet. A Google search for Steem CLI Wallet will give instructions. The command I used was convert_sbd demotruk "1.000 SBD" true
It only just became profitable after a year of irrelevance. I expect conversions will kick into gear as people start to recognise the opportunity to profit from it again.
I think it can be partly #3 and partly another thing, some may expect cryptos (therefore Steem) to go lower, or at least wait to see what happens before they convert.
Anyway, I think if SBD price continues to stay below $1, the convert option in the Steemit interface should be re-introduced.
Why keep this an option for the tech savvy users only, who will use the cli wallet?
And maybe keep it in the menu, but disabled (with a tooltip to explain why), when SBD goes above $1 and stays there for a while (like more than a week). Makes more sense than removing it completely.
I (with my secondary @doctor-cog-diss, that you tagged) tested this function via a web tool.
The thing is this: Converting is always speculative for you have to wait for 3 days, and then the SBDs are converted at a rate of 1 SBD vs. the STEEM median price over these 3 days. So if SBD rises again tomorrow, I am losing the gamble.
SBD has just dropped below 1$, and it's not sure it will stay there. If it stays stable below the magic line, I'm sure many more people will convert instead of using the internal market.
Plus I think it is past time that steemit.inc adds the convert button it the web interface again.