RE: SBD Debt Issue - Riding the STEEM Price Roller Coaster
You make some really good points. One the one hand Steem Dollars provide stability on the other hand they actually create instability in the way that the economy basically ends up in much bigger debt after a large price rise. None of the solutions are ideal. These are untested waters and I don't think there are easy answers.
I think the best (of a bunch of bad solutions) may be the one that people might find most unpalatable i.e. abolishing the Steem Dollar. On balance it's existence may create too much of a problem to be sustainable. It could be argued that volatility is going to be a feature of cryptocurrencies for the foreseeable future and this is going to create future debt problems.
In terms of brainstorming I can think of some ideas but again they are all problematic:
- have some sort of expiry or demurrage on SBD and remove the interest, making it a purely transitional currency for making purchases
- alternatively offer people a higher Steem value on their SBD if they cash them in within a certain period of time (e.g. an extra 10% within 48 hrs) - this would still incur debt but you would be less likely to get something of the magnitude of the x40 differential in value (that we had at one point from the peak).
- vary production of Steem according to market price - this is probably the worst idea and would likely lead to the opposite of what it tried to accomplish.
Like I said there are no easy answers and abolishing the Steem Dollar may be the simplest (albeit unpopular and problematic) solution to use.
What about keeping it but abolishing it as a reward for content, and continuing to only pay out in SP/Steem. It might be easier to control in that case?
That's a really interesting idea. Any time it is converted or burned the supply decreases, so there would need to be some way to regenerate it, but removing it as the primary form of payment would probably go a long way towards solving it!
Well it's regenerated from the 15% APR payout to holders. Another thought I have with regards to SBD is the exchange wallets hold a lot of it, so they get large APR payouts, are the exchanges crediting the holders with that money? If they aren't wouldn't it be nice if the exchanges would powerup their payouts to help alleviate the strain of the debt on the system.
No
Great question, I actually don't know how that works. I'm very curious to know too :)
This is actually a very good idea, IMO.
It is certainly possible but part of the goal is to both pay users in a stable currency that is more user-friendly than a highly-volatile crypto asset and also to seed SBD to a large number of platform users that makes it attractive to offer goods and and services to that large potential customer base.
If SBD is just turned into a financial instrument and not part of platform rewards then I think it loses a lot of its value, and the risk and costs that it adds to the system are harder to justify.
Yes that might help.
I like your first two bullet points. Also, wouldn't abolishing the steem dollar be less painful now that there will be no hyperinflation? However, I like having SBD, it is a nice feature.
Yes I agree it would be better now. I think we all like the idea of it a lot though so it might be difficult to convince people.