RE: What is SBD: Looking for an official definition
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.
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.
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.
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.
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