RE: SBD Conversion Statistics 2016/10/16~2016/10/22
It would only get powered up if the person doing the conversion purchased the SBD with that intent. It isn't a bad thing to do, as an investor you can possibly get a lower effective price for your SP that way (with some risk of ending up paying a higher price). I've suggested to the devs that they introduce a power-up-upon-conversion option that would eliminate the extra step.
On the other hand, if an investor did do this, it would likely be in leiu of buying STEEM directly to power up, which is removing buying pressure from the STEEM market. So, six one way, half-a-dozen the other.
In practice this hardly ever seems to happen. Most conversions are for arbitrage purposes (with the effect of converting from debt to equity). Some of the tinier ones are authors who power up rewards, but that doesn't actually reduce debt at all since it is all newly-created SBD.
Nice to see that the SBD price increased during the week of this chart. Unfortunately it appears to have dropped subsequent to the data period (currently 93 to 94).
Wow, thanks for the education on that professor smooth! I actually had no idea how it was working at that level. I've been encouraging just the SBD side with everyone. Here in Mexico dollars are prized for price stability since the peso is falling about as fast as steem.
Should I maybe be encouraging people to buy steem instead of SBD? Just regular folks, not power investors.
I don't think so, if they aren't speculative investors. If they buy Steem they will have huge volatility and probably suffer from high inflation over time (but short term volatility is the bigger factor and the inflation does not guarantee a downward trajectory over any limited time period). Still, buying STEEM for beyond short-term really should be locked up as SP which still means still having high volatility but being locked in.
SBD is the best vehicle for non-investors IMO and especially for commerce (though it still pays interest so can be attractive to some investors). We just need to get things back to a tighter balance. With the market cap down 90% and SBD not having many uses, that puts a lot of stress on it. 90% declines can't be common and uses should improve. So ideally I see SBD as becoming far more stable and usable.
STEEM was intended in the design to be a sort of on-ramp and off-ramp for long term (SP) investors, not something to be widely used. In the real world though, not everything works out exactly as an original design envisions (we see this with STEEM now being paid out to users due to the "SBD stability" feature, so it already has another use). Still I see it primarily serving that role, eventually.
we need Steem-Gold next to SBD
Yeah maybe we could add the golos token.
Steem gold (or golos gold) that pays interest would be awesome.
Mo monies, mo problems. SBD is enough of an issue already. Long term I don't think it would be bad. One of the interesting thing about Golos is the gold-backed pegged asset.
Thank you for that info. So steem for longterm investors and SBD for everyone else is the message we should be sending?
By the way, speaking of increasing uses for SBD...
https://steemit.com/steemit/@williambanks/steembux-is-here
Hope you guys all enjoy it!
Steem powered up is for long term investors. Liquid steem is for on-ramp and on-ramp purposes for those investors, as well as traders and short-term speculators who want to play it that way. SBD is for everyone else, ideally. Unfortunately, as I commented in a reply to you elsewhere, there isn't any way to separate the long-term investment component from the social media component, so for someone who just wants to be a long term investor (not social media), no ideal vehicle for that currently exists.
Actually, I think you (and as a result everyone) is overpaying for SD as it is. That will become more clear if the abit group of accounts start to actually sell their huge stack of SD.
My SBD purchases are primarily for conversion, with the primary purpose being debt reduction. I think the price I'm paying has a small expected profit or perhaps a break even (the latter doesn't particularly bother me since it still leads to debt reduction). Of course I can't prove that since expected return is unobservable. Actual outcomes may differ on any particular trade.
The goal of SBD existing at all in this system is for it to be pegged to 1 USD. The witnesses have been and continue to be adjusting the available parameters to achieve that goal along with debt reduction.
This might be against your distribution philosophy but if more sbd increase the virtual supply doesn't that mean steem holders increase their stake without even curating (vest are <90 % of virtual supply)
So more sbd actually outstanding actually makes it more attractive to power up for passive investors.
(When vest went below 90 is when I started powering up my sbd.)
If that's the case burning sbd is counter product.
SP holders are not protected against the dilution caused by ballooning virtual supply (only from rewards, which are relatively small at this point). It does mean that SP dilution due to rewards is reduced, but the debt expansion as STEEM price declines is still very real.
In fact I'm not sure whether what you said about it being more attractive to power up now make sense at all. At 5% or 8% liquid the SP dilution is pretty low already. At 11% it might be slightly negative over time but you are risking another 5.5% instant dilution if SBD grows to 10% of market cap from its current 4.5%. Plus risking potentially severe price declines if SBD holders decide to dump rather than risk unlimited losses at >10% market cap.