Steem Dollar Stability Enhancements

in steem •  2 years ago


Black swan on Vacha reservoir, Bulgaria by Kiril Krastev

Over the past couple of weeks, our team has been working through the Steem Dollar mechanics in an effort to secure the economic foundation of Steem against black swan events. It should be obvious to all that if at any point in the future the market cap of Steem fell below the supply of Steem Dollars then the Steem Dollar would break. Long before that happened there would be a run on the bank.

We designed the Steem incentives to always push Steem toward a Steem Dollar supply equal to about 5% of the available market cap. This happens because for every Steem Dollar we create we create about 19 Steem Dollar’s worth of Steem and Steem Power.

This system works well when the market cap is rising or relatively stable, but there is one edge case which could cause the system to unravel. When the market cap falls and pushes the Steem Dollar ratio to dangerously high levels (20% or more of market cap), then the network must start paying off its “debt” with “equity” and reducing the Steem Dollar supply.

Extremely Unlikely but not Impossible

Before anyone starts worrying, lets look at what would have to happen before these kind of scenarios become a concern.

Currently Steem Dollars represent about 1% of market cap and total about $2.1 million dollars. This is a very safe level. The market cap would have to fall to $10.5 million dollars before Steem Dollars represents 20% or more of the market cap.

Each day the supply of Steem Dollars is increasing so over time the danger zone market cap will rise.

Reducing Steem Dollar Supply in Down Market

There is only one way to reduce the Steem Dollar supply and that is by users voluntarily converting their Steem Dollars to STEEM at the price feed via the 7 day conversion. This processes can be incentivized by offering a short-term premium conversion rate that gives each Steem Dollar holder $1.25 worth of STEEM when they convert. This is possible by having the witnesses temporarily adjust the price feed.

It would be critical that the premium remain temporary and has a pre-planned deadline or else the market would permanently adjust the trading value of Steem Dollars to reflect this new premium conversion rate.

Steem Whales can also buy Steem Dollars on the market by powering down some STEEM and then convert to back to STEEM. This process would not necessarily be profitable for whales and suffers tragedy of the commons. One whale would carry the burden for the benefit of the entire platform.

Stop Increasing the Supply

Of course it gets difficult to reduce the Steem Dollar supply when the supply keeps growing due to interest and author rewards. The fastest way to dig yourself out of a hole is to stop digging. As it exists today, this isn’t an option for author rewards but it is possible to reduce the interest rate to 0%.

New Enhancements for Stability

In the up coming hard fork we will be including changes to the protocol designed to protect all parties in the event persistent price declines and lack of redemption requests allow the Steem Dollar supply to reach unhealthy and unsustainable levels.

Gradual Shift in Author Rewards

As the Steem Dollar supply grows from 3% to 5% the percent of author rewards paid in Steem Dollars will go from 50% to 0% and the percent paid as liquid STEEM will go from 0% to 50%. In this way authors are still awarded with liquid assets, but the network gradually slows down the printing presses on Steem Dollars.

At current levels, this measure wouldn’t take effect unless the market cap fell to $70M and would completely stop issuing new Steem Dollars when the market cap fell to about $40M.

Gradual Forced Redemption of Steem Dollars for STEEM

Any time the Steem Dollar supply reaches 20% of the market cap, 1% of everyone’s Steem Dollars will be converted to Steem Power at the price feed. This action can be viewed as a partial “bail-in” where everyone is treated equally. This will immediately reduce the Steem Dollar percent of total market cap while preventing immediate dumping of the STEEM which could accelerate the collapse in a positive feedback loop.

Steem Dollar holders that wish to avoid this forced redemption should convert to STEEM and sell on the market. If done via the 7 day conversion process, then the supply should decrease naturally and all Steem Dollar holders can be spared the “bail in”.

Implications

It is our belief that having this safety net in place before it becomes an issue will help the entire community know how stake will be allocated in the event of persistent long term declines in price. The existence of this safety net will in turn reduce the likelihood that fear will turn into panic selling that would ultimately precipitate such an event.

It should be obvious to all that Steem Dollars are not backed by any individual holding dollars in a bank or promising to pay US dollars and that the only thing you are guaranteed is some amount of STEEM. The STEEM cannot be guaranteed to have purchasing power.

Under the enhanced rules everyone is protected and fairly dealt with in the unfortunate event that the market cap of the platform is unable to sustain the Steem Dollar debt levels.

Feedback Wanted

If anyone has any concerns or has better solutions in mind please let us know.

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

I would like to make a brief statement that due to some legitimate concerns raised and an enhanced alternative solution I have come up with, the forced conversion at 20% will not be implemented. A future post will contain details about an alternative solution.

·

@dantheman any chance we can get an Official Steemit Guidelines and an Official Steemit Chat feature? See my post about Steemit Guidlines or my post about Steemit.Chat for a reasons why!

·

Today I wrote an article that is exposing your secret plan: https://steemit.com/steemit/@capitalism/capitalism-5-dan-s-secret-plan-for-world-domination-exposed-exclusive-cover-up
Opposite to the GivingPledge of Bill Gates I have made a KeepingPledge for it - so I will convert all SBD payed out by this article to Steem and power up afterwards. If more Steemians are doing this, this will stabilize the price. Lets make the #KeepingPledge popular.

Currently Steem Dollars represent about 1% of market cap and total about $2.1 million dollars. This is a very safe level.

Let's say that again:

Currently Steem Dollars represent about 1% of market cap and total about $2.1 million dollars. This is a very safe level.

---->> REMAIN CALM <<----

(Now you can read about a new way to burn steem in my STEEMIT SHOP idea)

·

Was going to sperg out, now I'm good. ;)

·

Thanks bro, I'm calm now.

·

We designed the Steem incentives to always push Steem toward a Steem Dollar supply equal to about 5% of the available market cap.

What is 'available marketcap'. The VESTS are illiquid, and not part of available market-cap. If we take them out, then we only have 8.4M SBD worth of liquid STEEM. This means, SBD to liquid STEEM ratio is 25%.

Calculated as:

2.1 / ((134.8-129.5)*1.59)
= 0.24919900

Using current values from steemd.com

·
·

All SP counts as well. Just because it is "locked up" doesn't mean it has no value.

·
·
·

I just find it weird to throw both STEEM and VESTS into the same market cap.

Technically they are not the same thing. They don't have the same value - VESTS need to be adjusted to account for inflation and opportunity cost that comes with the lock-in.

·
·
·
·

Although now that I think of it, my point on counting only the liquid STEEM is baseless. SBD is created in 1:19 ratio, all of the STEEM being issues as VESTS.

You could also introduce a flag in account information for accounts to volunteer to have their second half payout paid entirely in Steem Power, liquid Steem or Steem Dollars. This would slow down the increase of the SBD debt, and provide some more leeway.

·

I second this. I've been reinvesting all of my Steem Dollars into Steem Power and it would be nice not to have to take that extra step. I only plan on cashing out Steem Dollars if I make a post that pays out a large amount, and in such a case I would leave my Steem Power reward alone.

·

I agree with @recursive. I think I'd rather just have the Steem Power too.

·

That's a really good idea. I'm sure a lot of people would volunteer.

·

Yeah, it sounds great. Perhaps even a setting in how you would prefer them to be distributed on top of the always active 50% as Steem Power. Say, I'd like 75% SP, and 25% SBD, without having to convert or hit the internal market.

·

I like this idea as well and would probably sign up for it, but I also recognize the value created in terms of market liquidity my SBD -> Steem Power conversion brings. If no one had to do that step, would the liquidity (small as it is today without the liquidity reward) also dry up?

·

double upvote this one.

·

This is good for a few reasons: more user control on their payouts, incentives for STAYING POWERED UP, and sets the stage for user controlled payout percentage options for contributors, editors, or artists related to content (ie. 25% to userX; 25% to userY).

Gradual Forced Redemption of Steem Dollars for STEEM

Any time the Steem Dollar supply reaches 20% of the market cap, 1% of everyone’s Steem Dollars will be converted to Steem Power at the price feed. This action can be viewed as a partial “bail-in” where everyone is treated equally. This will immediately reduce the Steem Dollar percent of total market cap while preventing immediate dumping of the STEEM which could accelerate the collapse in a positive feedback loop.

Steem Dollar holders that wish to avoid this forced redemption should convert to STEEM and sell on the market. If done via the 7 day conversion process, then the supply should decrease naturally and all Steem Dollar holders can be spared the “bail in”.

Can you imagine what a mess this would be for exchanges and other Steem Dollar holding services? Do not do this.

From conversations in Steem chat, I understand this might already be in the Steem code. For the sake of everyone's sanity, it should probably be commented out or changed on the slightest chance this could happen.

·

I agree this is not good for the platform and could make some people more skeptical about Steemit posting articles like this from one of the founders of Steemit. This is no better then a government bailout to save there own fiat currency. @dantheman should update this or add more clarification or else this will make people more skeptical of the platform.

·
·

This was added to make people more confident. The alternative is to deny reality and pretend this could never happen. The odds are slim, but having insurance is better than denial.

·
·
·

Better lock the SBD (fixed deposit style) than convert it automatically to Steem, and then let the option to users to decide if they want to liquidate the position or keep it as vesting SBD. This has the advantage that people who are not paying attention won't mind if the SBD are vesting, and people who are paying attention will at least get to chose between accepting their SBD to be let in vesting (with higher interest rate) or liquidate the vesting SBD into liquid Steem or Steem Power after the 1-week conversion period. This effectively prevents a run on the bank on SBD and doesn't risk exposing people who are not paying attention to Steem volatility unbeknownst to them.

For more leeway, and to avoid making Vesting SBD feel like capital controls, you could create already a new type of asset called Vesting SBD (the very same to which you will convert liquid SBDs in case of black swan) so that people will already be familiar with it as a form of longer term asset and won't have a knee jerk reaction when they find their liquid SBD was converted to vesting SBD. And to encourage people to put their SBD in vesting proactively (and therefore give the network more leeway), you could pay an interest rate that is a function of the "Liquid SBD supply"/"Total SP market cap" so that the higher the ratio, the higher the interest will be and the higher the incentive to put SBD to vest.

To finance higher interests on Vesting SBD, and desincentivize holding liquid SBD, the interest rate on liquid SBD should be lower, but not that low as to discourage market makers from holding liquid SBD. That way people will keep liquid SBD if they want to cash out soon or do trading, or put it to vest if they just want to hold it there to make interests or until Steem hits the price at which they are keen on converting the vesting SBD to Steem or Steem Power.

·
·
·

How would you tell exchanges and services holding user balances to deal with this? Nobody would be happy. If this is sitting in the live code it's a timebomb.

·
·
·
·

Lack of code is a bomb without pressure releaf. It could be a hair cut, that would make things easier on exchange.

·
·
·

"but having insurance is better than denial" I completely agree on this!

·

Exactly.

That kind of shenanigans is why many of us are in cryptos and so skeptical of government interference in the first place. I think you need to discuss this with the community further. @dantheman I would urge you to take up @fyrstikken's offer and discuss this on steemspeak

I also think you need to distinctly separate the accounts you use for "discussion" and thinking aloud from those that are "official" Steem matters.

I commend you for being open but sometimes you have to consider the effects this kind of posting has on the confidence of the community who aren't necessarily as free thinking as you are.

It is very easy for people to take things the wrong way and misunderstand online.

·
·

I absolutely agree with you. The Steemit trolls will have a field day this post, and take everything out of context. Im not saying that the issues should not be discussed. It just needs to be discussed in much different context and possibly a different venue.

This gives me flashbacks of the BTS merger of Nov 2014, when a lot of misinformation was flying around.

·
·
·

What other venue do you think would be more appropriate? I see this as a blog, a social media site for personal expression, one that even hinders trolls through reputation and flagging. When it comes to more serious policy decision discussions, those happen on Github because code is law.

·
·
·
·

i am not a programmer OR a blogger ... but I have to say , I'am AMAZED at the growth and importance of Github ..wow .... some of the smartest people & content in the world are there ... imho
Idea !, need a t shirt ... Steemit.com, Where Code is LAW !, lmao

·
·

It is very easy for people to take things the wrong way and misunderstand online.

It is, but should we hold back innovation for those who don't understand the implications? To me, this change sounds somewhat reasonable in that it's very unlikely to happen, and it could potentially prevent people's investments from going to 0, which is a really beneficial thing.

I think we have an interesting balance here between those who really understand advanced game theory, economics, software, and cryptocurrency (I would put Dan in that category) and those who just have an opinion (mostly the rest of us).

I, for one, prefer the openness and communication about the possibilities.

From the OP:

If anyone has any concerns or has better solutions in mind please let us know.

This wasn't a decree from on high, but a start of a discussion. How often does the FED involve its subjects in an open conversation about monetary policy?

·
·
·

I'm all for discussion but right now it isn't always clear what is discussion and what is actually policy.

It is hard to separate what @dantheman's personal opinions are from the actual policies of the platform itself.

Some separation and clarity in this regard would not be harmful.

·
·
·
·

I agree, but I'm not sure how that is practically done. As they say, "Code is law." Dan writes much of the code, so he can dictate the law... but, as we saw recently with a Github issue that is now closed, the community also has a voice and, so far, that voice has power.

I see people with "The tweets here represent my personal view and not the view of my employer" in their bio often, and I always chuckle. "Companies" don't have opinions, only people do. A company can make an official statement, but that happens (in this case) from the steemit blog. To me, I assume everything said is Dan's opinion, even if he uses confusing language like "us" in his posts. That, at least for me, helps me lower cognitive dissonance.

·
·
·

One thing about the mass market, it that it does not think critically. It thinks very very basic, gets things out of context extremely easily and moves impulsively in herds.

·
·

I agree ! When I fist came here i felt as if i were settingin on a corp boad meeting ...I was like wtf ? people talking that had NO concept of what was going on or being said, but yet, comments were flowing that had no business being said at a "Board" meeting .. don't get me wrong here .. but come on now, "personal thoughts are WAY diff than 'Official" statements ! man .. Steemit needs a (Like WoW admins in BLUE) official post page (Announcements etc.) IMHO !

All these types of things should be made very clear in the interface. The current interest rate should be shown, as well as any award shifts or forced redemptions.

·

Yeah it would be nice if they showed the interest rate.

·

Yes... it is also a major selling point that although there might be risk in holding SBD, there is also a considerable risk in having a bail-in in a commercial bank... especially in autumn (September/October)... and there one does not get a penny in interest... only risks...

And the funny thing is, that as always banks are shown in the mainstream media to be solid as hell... while we care much about pointing out 20 times that there is risk involved in this space. In the perception of an outsider we ourselves say we are risky, while the others say that they are safe... with lots of cute capital ratios and stress tests... all bogus in my eyes...

·

They need to get the advertising revenue coming in and use that revenue for buying back SBD.

·
·

I was thinking that we need more ways to consume STEEM other than advertising, which ruins the experience.

For instance? Want to earn yourself an avatar image? It costs XYZ STEEM. This will cause people to spend $20 or something realistic to buy their avatar, either by earning it, or buying it.

The steemit.com/shop/ could be created. Owned, and staffed by the blockchain itself.

Virtual products, virtual services, sold by the blockchain, that consume STEEM. This way people who hold value, or can buy value from traditional exchanges, and enjoy these virtual products and virtual services to beef up their steemit accounts with something other than SP.

https://steemit.com/steem/@intelliguy/let-s-use-steem-and-consume-it-in-our-new-steemit-shop

·
·
·

Good idea.

a safety net during a "run to the bank" ... I have to think about this @dantheman for a few hours.

Would you mind coming on http://steemspeak.com and talk with us about it later today? A lot of people suddenly got panicked by this post.

·

Yes I hope he takes you up on that. These kind of things need at the very least to be discussed.

You should really have a changelog where you're actively updating all the rule changes you're implementing (and there should be a master doc that has all the rules presently in place).

Right now it seems like its a combination of blog posts and Github, and that's frankly hard to track. To track rules I'm kind of doing a combination of Google searches and reading the Github and it should be more simple than that IMO.

I think these solutions are more complicated than they need to be. If holding Steem Dollars creates a problem for the network, the resolution is simple: Reduce the incentive to hold Steem Dollars.

How would this be accomplished?

As the percentage of (Steem Dollars/Market Cap) grows, gradually lower the interest rate. Do the opposite when that percentage is shrinking. In order for this to work, these interest rate changes must be highly transparent.

When you think about the function of an interest rate, it's encouraging savers when the interest rate is high and discouraging savers when the interest rate is low. I don't think it would be any different with the Steem Dollar. What do you think, Dan?

By the way, I'm not against having other safeguards in place, it's just that I think we can solve this with​ a simple floating interest rate.

·

Variable interest rate shown in the interface is a good idea and may help much.

This processes can be incentivized by offering a short-term premium conversion rate that gives each Steem Dollar holder $1.25 worth of STEEM when they convert. This is possible by having the witnesses temporarily adjust the price feed.

Can you clarify this? Do you mean they would "fake" what the exchanges are actually offering for SBD on the open market? That, to me, seems odd, but I get how it would work, given the current mechanisms that are already in place. It just feels... icky.

Also, would this be widely communicated via a notification on the site? Seems like an important change people would need to know about.

It seems to me an active marketplace for SBD is the best long term solution here. Even if the value of STEEM dropped, a market place for SBD could (in theory) prop up the value of STEEM beyond what cryptocurrency speculators invest in it.

Do you have a timeline for the birth of that marketplace?

I run an ecommerce platform with thousands of merchants and already demonstrated how people could sell products on Steemit blogs right now. All we need to make this go mainstream would be official integration and a SBD payment system such as http://www.steempayments.com/.

·

Ah, I love this response. Thank you @dantheman. That post answers a lot of my questions and concerns.

Flagged for using a preview purpose only image from dreamstime.

·

Man what big balls you have!

·
·

@dantheman you changed the image again but seems to be plagiarism once again.

·
·
·

The image was licensed under creative commons: Wikipedia

·
·
·
·

@dantheman Thank you for editing to include attribution! These little things may seem trivial but it is important for the big whales and big posters to 'do things well' to set a shining example for the community -- as people will replicate the posting style.

·
·
·
·

commons.wikimedia.org/wiki/File:Black_Swan_bg.jpg

Attribution – You must attribute the work in the manner specified by the author or licensor (but not in any way that suggests that they endorse you or your use of the work).

Add source please.

·
·
·
·

FYI

https://steemit.com/photography/@repholder/how-copying-and-pasting-images-can-get-you-in-trouble

Edited : A thank you from the steemitabuse-channel members (aka steemcleaners) for adding attribution.

Flag removed ;)

·
·
·
·

The image already contains attribution in lower right and the URL already defines source (wikipedia).

@dantheman sounds like you guys really thought this out. I think a mixture of all those ideas would be ideal and guarantee permanent longevity for the platform and crypto.

I like the monitoring and panic-button option for black-swan events. In the cybersecurity world, it is far better to put detective measures in place to rapidly detect and respond to such events than attempt to put controls which prevent black-swans. The ROSI (Return on Security Investment) is typically not there to establish prevention measures, whereas detection mechanism are relatively cheap. Coupled with proper response intervention capabilities and processes, it tends to be the most economically and user-friendly path for sustainability.

Forced transactions which automatically adjust users assets is a slippery slope and should really be the last resort. Would you patron a bank that had a policy that they could automatically shift your assets from one financial instrument to another, to benefit their stability? Establishing automatic sell-offs and slowing return rates creates complications which might be gamed or fuel unintended consequences based upon human behaviors. And that could just be the beginning.

You have identified one black-swan. Others will eventually follow. Define an overall strategy for how you will address these. Will you create a complex and custom mechanism for every fear? I hope not. Instead, do the value assessment and find the optimal level of risk based upon the long term complexities, costs, and user-impacts.

Loading...

Pay interest for holding SBD in Steem Power.
This scenario could happen easily if Steem jumps to 6-7$ and keeps there for a few month and then go back to 1$.
Security mechanism for liquid rewards seems fair, let users decide in what 'currency' they want to receive rewards SBD or Steem or even full rewards in SP.

Another solution would be to introduce in Steem Bitshares UIA and have gateway USD listed, with a XXX.USD / SBD book and XXX.BTC / SBD book. People who would wish a avoid the risk of having their SBD transformed in Steem in case of black swan would convert to XXX.USD or XXX.BTC. It also makes it easier to withdraw: they can directly withdraw the XXX.USD to XXX exchange and then wire transfer it to their bank account or even directly send XXX.BTC to their BTC wallet with gateways wallet integration like in OpenLedger. Once people have converted their SBD for XXX.USD/BTC, SBD will most likely end up in the hands of market makers who are responsive to incentives and arbitrage opportunities, and will use any incentive mecanism thrown their way by the blockchain to convert SBD back to Steem.

"As the Steem Dollar supply grows from 3% to 5% the percent of author rewards paid in Steem Dollars will go from 50% to 0% and the percent paid as liquid STEEM will go from 0% to 50%. "

Fantastic idea. Kudos!

Not so fond of the Bail-in idea. For me, I'm in the boat here, so it won't affect me hardly at all. I like having SP or just converting to ST. But it's a matter of the freedom to do what one desires. I know this idea is in the best interest of Steemit as a whole, but isn't it a bit on the draconian side too?

How about including a percentage of market cap in the formula for whether authors get SD or ST? This way, regardless of how much the market cap drops, the amount of SD being issued will adjust accordingly... or did I miss something? :)
I realize that on one hand it's sorta six of one half-dozen of the other. But adjusting the payout is a lot different than pulling from someone's savings. Perhaps it's more a matter of principle than practicality, but principle matters.

Thanks for your hard work on this.

·

Assume all sbd printing stopped. Assume market cap keeps falling. At some point you must convert to steem forcefully.

·
·

Thanks Dan,

Is that even possible? I guess ST would have to drop quite precipitously for that to happen. Pretty unlikely, but I see your point. No sense sending the whole project into a nosedive.

·
·

Hi Dan, I have a question around why there is a 7 day delay on converting SBD to STEEM on the platform? I could achieve this nearly immediately on Bittrex.

Great to see more proactive measures being put in place to maintain SBD value , however I'm already pretty impressed how well its doing so far..

Heres a new chart of Steem and SBD valued in USD , we're just under parity again :)

Using my SteemUSD/SBDUSD indicator

This is such an interesting show to watch! Another Grand Experiment... All I have to say is thank you for your part in these exciting times!

Quite a bit of economic theory at play here @dantheman. If SD interest rate dropped, I would either convert to SP or Steem. I'm concerned about dilution of Steem over time and would like the witnesses to consider alternatives for those who would like to hold more liquid assets on the platform. Personally, after my first interest rate payout next week, I'll be moving SD to SP.

I have posted this in an earlier post: Steemit could come up with solutions to make inflation less costly for investors, why not do that in a Steem buy back program where Steemit buys back their own coin and taking them out of circulation, this would be paid for with money from advertising and revenue from new programs that creators come out with.

·

Are you a "spy" from Facebook?

·
·

What makes you say that? I have nothing to do with Facebook.

To me my immediate reaction is that this sounds like a brilliant solution. I believe that this will work and trust the minds that have made Steemit so successful already.

@dantheman, thank you for listening to the users in your platform. Giving us all the ability to voice our opinions not only lets us participate and feel our thoughts are given proper consideration, but also benefits you. Regardless of status or reputation, any user could come up with a valuable idea about this future change that you can weigh out with some others and form the best system possible.

Side note, you can't be putting watermarked images into your posts without giving the authors credit. That would look like a black eye to new users in my opinion. I'd recommend changing the picture to one without watermarks and as a prominent leader here, I think it is important to lead by example. We may need an easy way to give credit to the authors of a picture or video and embed it inside for those who wish to see. Would cut down on copyright infringement.

I just wish I could understand all this stuff. There's quite a bit of terminology that I don't get. Would there be any chance of a webinar at some point in the future? I know, you don't have to know how a car works to use one, but it is interesting stuff this :-)

I agree with you.

Thank you to you and your team for having the foresight to mitigate future risks to the SteemIt community.

I don't think you should "adjust the (witness) price feed". There must be many ways to accomplish this.

In fact, you should be expanding accurate price feeds... and get into the oracle business. The witnesses should be required to provide a whole array of prices for the payouts they are getting.

·

I agree that adjusting the feed is not a good idea. I included it in the post to show that it was the "best option available" without a change to the platform.

What about an option that would allow users the option to accept their entire post reward in steem power? While it may not be the route everyone would go, I know myself and others would love that option to avoid conversion time. Even your proposed right to steem would accomplish this. It would be completely voluntary at this point, but could take pressure of the SBD peg.

·

That's a great idea and I'm sure more whales will upvote your post if you only "accept" SP, that's how they roll.

·

Already exists just not in GUI

·
·

Beautiful! Can't wait till added!

·
·

Introduce it into the GUI. Or is this option already included in the next hard fork?

BTW: the idea of an official Steemit blog is a good one. There should exactly one place available for official announcements and the latest set of rules.

Then you publish a post and refer to the blog :)

·

Yeah, this conversion stuff really is a drag if you didn't come just to cash out.

NIce ... good effort :)

The SBD peg is affected by BTC fluctuations and volatility, could we not just peg to BTC directly or have a mixture of SBD / STEEM / BTC liquid payout based on user preference? Maybe even getting rid of SBD altogether could be a good thing.

The best way to have people not hold steem dollars, is to make them easier to sell. The average non crypto user has to put in a lot of work to get the steem dollars out.

·

I would consider myself the "average non crypto". Never had any real exposure to Crypto before Steemit. I am also non US based geographically.
I want to debunk this difficulty myth. I found it incredibly easy to 'get my Steem dollars out' and convert to either $US, Euros, or GBP in only 2 steps.
(1) Using Blocktrades - Direct exchange of Steem Dollars to Bitcoin (https://blocktrades.us/) and (2) a new AdvCash Card account - Bitcoin to "Fiat" currency of choice (http://advcash.com/en/)
I found the whole process pretty intuitive. My very first attempt: - Only 30 seconds did it once I had my new AdvCash A/C setup, which itself took about 5 minutes. Peace :)

·
·

Yeah, I am a actually a programmer/developer...sometimes i have no idea whats hard for the average person. I was just imaging my mom or and any person above 55 trying to do this. These are people who would make great contributors but have no idea how to get money off the platform...so it will just sit.

·
·

My procedure is following:

  • transfer SBD to Bittrex
  • sell them there to BTC
  • transfer BTC to Cashila <- referral link

This way I end up with Euros which I can directly use to pay anything via SEPA transfer.

What about sell Advertising space on steemit site that pays in SteemDollar, then system will auto convert to Steem via 7 day conversion process.
Profit will be shared to all SP holders via Steem liquid.

Great updates, ive been suffering hard enough from sbd nose dive. Half of my portfolio was invested to sbd. It was a bad trade decision that led me to this platform. Im hoping that the trend would be reversed soon. Thank you for taking care of the community

A last simple solution to avoid a run on the bank: allow SBD to vest too, and give the interest rate only to SBD that has been put to vest. This allows to convert short term debt into long term debt.

great posting, and thanks @dantheman
I did cash out the first bit I got from you upvoting my comment on @blakemiles84 re: the blake vs tone debate. I very much appreciate that upvote, and sorely needed the funds. (more than you can imagine)
I won't be cashing out my totals any more. I'm here for the long haul.
The uptick yesterday in the "Master Trader Coin" on Bittrex gave me more than I expected. Made about 20x on 1/10BTC. So I'm good!
Still waiting for the damned Mona Coin to wake hell up!!!
:^)

Information that is very helpful and I love.

Steemdollar stability would be sweet!

However, after seeing nubits crap the bed so to speak on it's peg I'm not sure how you guys tend to solidify the SBD peg. Good luck! I think phasing out the SBD and SP output of authors content may scare some folks away

I know even myself as an "early adopter" have found the changes in the beta build up to be a wee bit odd.
Hopefully we can address the Steemdollar as a community and try and find a method to pegging it properly..

That being said.. Who is going to be the whale in charge of trying to keep the liquidity / peg active?

·

Although he took some flak for it, Dan originally called nubits a ponzi scheme, and he was right. The peg in nubits didnt break until bitcoin had a big rally (it was not that big from a historical perspective) and they didnt have enough bitcoin to cover the amount of nubits being redeemed at higher prices. I was frankly amazed that the peg broke after only about an 80% price rise over a few weeks. I thought they had something like 7 layers of protection in place.

Anyway, the unfortunate reality for a non-native pegged asset is that some type of safety net has to be in place at the expense of all users, either through dilution or a bail-in of some sort. Otherwise, the system can break under certain conditions.

Would it be a problem for the system to simply adopt a variable interest rate based on the SD supply and market cap?

Also - as users leave the platform or lose passwords, what will happen to any SD in their wallets? Could those auto-conversions be high enough to essentially wipe out an account's SD holdings if they were sitting on, perhaps, $10,000 SD? What could an auto-conversion look like for inactive user accounts? A percentage of holdings over a specified time frame?

Great post. I currently have no suggestions on the best solution to this, but thank you for initiating this brainstorm. With so many talented and passionate individuals having a stake in the success of steemit, I'm glad that we can all come together to prevent potential issues before they arise. Thanks again!

This is a great idea , we're all learning together.

This was needed a long time ago.

Good information.

Overcomplicated and rife for corruption, 'nuf said.

Where can we find a how-to video to increase our steam power, learn how to vote accurately and so on

Its quite a complicated system and one that can defo go over a lot of peoples heads, myself included. Some kind of animated video explaining simply all things interest/risk related would be helpful i think.

As clearly the interpretation of your post, made me analyze various facnctores to take into account, after a thorough study conducted by my team, we came to the conclusion after a hard work of research, that the important thing is that we are alive and have health man.

I have predicted that would happen in this case, yeah it did occur whereby all just make money here without seeing how it will evolve in the future, I have not seen a good plan in this project just give feedback to you @dantheman

What if SteemDollar eliminated and all writers are paid with STEEMPOWER, I thought it was better and could produce Steem every week

If the in this case does not look good, you can use the auto conversion to steemdollar be steempower

The last thing Steemit needs is a run on the bank so i pleased these possible issues are being focused...keep up the good work and long live Steemit.

With only a small % of Steem being traded, and most big investors having all their Steem basically locked up in Steem Power, I don't see it having many big problems with price stability to be honest. Its only when people can pump and dump that prices get silly and people lose faith or gain unrealistic faith. But its interesting to hear the weaknesses and how to make the system stronger.

Its good solution, but mandatory 1% Power Up... people in crypto-community dont love when something controls their finances. I hope this will not happen and all be fine.

·

Holding steem dollars isn't mandatory.

Bitcoin mining to give the foundations some financial backup? Hrmm thanks for letting us all know anyway @dantheman

Respectfully @dantheman, using watermarked stock images sets a very poor example.

·

I thought I was advertising for them, but changed the image to one with creative commons license.

I don't understand all the implications of this post, but I am starting to seriously being concerned about the future of Steemit

Is Steemit becoming another bank? Because thats what banks do: take decision for other people's assets

This kind of deeply considered hands-on approach to maintaining and perpetuating the STEEM Universe, is nothing but ALLLL GOOOOOD! I for one am very happy that you have the desire 'and' capability to make these kinds of adjustments.

Although transparency, and requesting feedback is a healthy thing for the community, I see at least one post in the comments section asking that "all this be made clear in the interface". I just want to point out to those who are very demanding when it comes to all things related to the STEEM economy, that changes found to be necessary for the long-life and health of the system, need not be made public, these kinds of adjustments could all be done without community feedback.

If for instance, you saw a need to transfer wealth from the bloated and undeserving, to the poor and struggling STEEMers, then you could just go ahead and do that .. like, anytime! :)

dantheman created, ned downvoted... what's happening right now?

·

I would think, that @dantheman and @ned dont want this post to get high rewards, so ned downvoted it.

·
·

oh.. never thought about it.. perhaps.

·
·
·

would be the only logical explanation. if not steemit is doomed ;)

·

@ned: no comment?

I believe this to be a very smart solution to a "possible" future problem. I would add @recursive 's idea of letting users choose whether to receive their payout in SBD, Steem or SP.

·

Hola hermano, te mencione en mi ultimo post espero que te guste

I was about to publish a post with the proposal to offer the author a choice before posting; I personally would opt to get my rewards in STEEM POWER instead of SBD. I think many other would also. How about integrating this as well? It solves a big part of the issue.

How about you guys use revenue from advertisers to buy back SBD? And make it so it only takes 1 or 2 days to convert SBD to Steem? I transfer my SBD to Poloniex and convert to SP instantly cause I don't want to wait for 7 days.

Seeing whales powering down massively surely does not help confidence. Although the market cap is 1%, it becomes worthless if major whales pull back before it can be replenished with new STEEM capital from newcomers.

Users that have been around know this after spending sometime with the know-hows. Newcomers don't. Remember. Value is all about trust and right now there is not much trust in the value from higher up.

@dantheman we should promote sd usage as a currency outside of steemit activities. like uber-taxi services or person to person vacations. The more uses SD's gets the more the safety levels will be secured. But that is something that will happen eventually as the community grows, I don't think there should be any reasons for concerns.

·

Steem market is a step in good direction. Unlike BTC SMD is stable and thus more suitable for sales of goods.
https://steemmarket.sharetribe.com/

I prefer Steem Power over Steem Dollars and I wish more people would choose Steem Power, because then you can reward better content and keep more value on the site. This will bring in more new people and more content, because they will have a better chance of being rewarded. Then your investment of Steem Power will grow tremendously.

It seems silly to see people pull everything that they can off the site to sell for pennies on the dollar.

·

Content does not make social media, people do... and the content follows

·
·

Or as synereo says attention does.

Could there be an option to directly power up SBD instead of having to go through the one week conversation, or trade it for Steem first on the exchange?

Dan, can you clarify if marketplaces were to evolve around Steemit, would it be better that they accept Steem rather than Steem Dollars and rather put focus on Steem as the digital currency for trade purposes to help with this problem?

Hello Dan,

I always wondered, why there is no direct function to power up using SD to SP. Now i have to go to the market, buy Steem than power up. Would be much easier if i could just directly power up SD-> Steem.

If there was an option to select the payout method (for example 100% in Steem Power instead of SD+ SP) i might chose 100% SP for some payouts.

  • Reduce the interest rate on SBD gradually, sort of like a halving system.
  • Steemit will grow as more and more people join us, increasing the STEEM market cap
  • Change the ratio between SP & SBD payout, more SP should be given and less SBD

Up voted!!!
just wanted to feel like whale up-voting someone's terrible idias

Honestly.... brutally stupid idea Dan!

Good post

I love the idea of reducing steem dollar % payout on rewards.. however might I suggest that the existence of Steem Dollars will always be a black swan waiting to happen unless a lot of awkward patches are created..some of which you've presented here. Auto converting Steem Dollars for Steem Power if ratios get to dangerous levels is fine..but what about a Dodge? Users who didn't want this could move all Steem Dollars to an exchange. Worse..users who wanted to harm Steemit could do that and then wait until market cap troughs and slowly feed dollars back into the wallet to convert for Steem. Right now the system is young and I think this is its biggest mathematical threat. Forcing a new system to have sufficient market cap at all times is a lot to demand on an already new endeavour. I propose an auto conversion before long of Steem Dollars for Steem Power or Steem. As far as Steem Dollars on exchanges, either consider that a minimal risk and allow it to remain for a time or have a cutoff date whereby Steem Dollars will disappear. Prune the branches and let the project survive without the awkward risk and patches.