Has SBD transformed from Convertible Note (debt instrument) to a full-fledged cryptocurrency? Where has the Convert to STEEM function gone?

in #steem6 years ago (edited)

SBD is a promissory note.. it is the fiat of the Steem blockchain, backed by STEEM. It is supposed to be a convertible note, which allows you to convert it into STEEM at any time, with little notice (3 days conversion).

Except now the "Convert to STEEM" option has gone. Or am I looking in the wrong place?

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You can also use SBD to buy and sell goods and services here on Steemit, and on quite a few other online stores. @phelimint has started a list of them

With the conversion option in our wallets disappearing, perhaps because it is broken due to the high prices at which SBD is being traded on the markets, SBD appears to no longer be a promissory note any longer. You now have to sell your SBD on the market to the highest bidder. It has become an asset of value, and at the moment very high value.

Being a promissory note by design, the total debt value of SBD, according to the STEEM whitepaper, should always remain bellow 10% of the total market cap of STEEM.

A rapid change in the value of STEEM can dramatically change the debt-to-ownership ratio. The blockchain prevents the debt-to-ownership ratio from getting too high,by reducing the amount of STEEM awarded through SBD conversions if the debt level were to exceed 10%.If the amount of SBD debt ever exceeds 10% of the total STEEM market cap, the blockchain will automatically reduce the amount of STEEM generated through conversions to a maximum of 10% of the market cap. This ensures that the blockchain will never have higher than a 10% debt-to-ownership ratio.

The percentage floors used to compute STEEM creation are based on the supply including the STEEM value of all outstanding SBD and SP (as determined by the current rate / feed).
Source: Steem Whitepaper

With SBD being traded freely (at over $10) on the exchanges, and with value of SBD supply being limited to 10% of the total STEEM market cap, has SBD become a standalone currency, and should the "Convert to STEEM" option in our wallets be removed for good, removing its "instrument of debt" function (which appears to be disabled right now)?

Leaving the post rewards payouts as they are, there would still be a demand for STEEM, as it is STEEM which gives you power, and it is only STEEM POWER which determines the rewards from upvoting.

With STEEM being relatively cheaper vs SBD things are looking good from the rewards perspective, especially those using their higher rewards to power up.

I don't even know if this makes sense to anyone else, but they are my current thoughts. Maybe the paint fumes have gotten to me at last...

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Time for another coffee. Have a great day everyone.
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There seems to be a lot more attention being paid to SBD for the last week or so. Seemingly by buyers in the Asian markets.

I'm still trying to figure out if it's investment or speculation.

I suspect that folks are taking profits in BTC and shifting some of those profits into other cryptos, which makes good sense.

Hopefully they're investing instead of just using the SBD as a safe space to park the money.

Time will tell!

I'm not complaining either way. I'm loving the rewards right now.

SBD has been pretty comfortable at the $10 mark. Time will tell whether it can stay there. It has helped the STEEM price creep up a bit too.

Your definitely in the right track man. I read it was removed a weak ago as it wasn't converting proper and giving people less than 1:1 steem/sbd.
I'm really curious about the future. I'm quick sure they'll have to change the payout calculator to take into account the external value of SBD since the peg is shot now. I'm the meantime I'm just loving it and trying to make the most of it!

The peg is snapped for sure. We may find it stays off to keep things simple, and not having to pull in extra feeds from exchanges to facilitate something that isn't really needed.

Amusingly @ratticus and I were recently wondering if that option should be removed when we were discussing his "horrible failure". Probably for the better I think, though seeing as steem is a little bit more intense than your average socnet links to documentation are going to have to be clearer!

goatsig

Yeah, some people have lost out big time with the conversion. The documentation does need to be clearer, especially when it comes to money matters.

Did Steemit disable the conversion function in the UI to prevent people from making an obvious error?

It would appear that way. The error of converting may not be all that obvious to some, so they have done the responsible thing by taking it away.

It's all a bit whacky isn't it?
Enjoy the good times though!

Wacky is probably a very good description!! It sure is the good times right now!

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