You are viewing a single comment's thread from:
RE: Getting Screwed by SBD Payouts: Switching to 100% SP (JK)
(page 10/11 of 32 SteemWhitePaper.pdf)
The primary concern of Steem feed producers is to maintain a stable one-to-one conversion between SBD and the U.S. Dollar (USD). Any time SBD is consistently trading above $1.00 USD interest payments must be stopped. In a market where 0% interest on debt still demands a premium, it is safe to say the market is willing to extend more credit than the debt the community is willing to take on. If this happens a SBD will be valued at more than $1.00 and there is little the community can do without charging negative interest rates.
It's called inflation. Pump more SBD into the reward pool until the value is $1.00 USD. Maybe $1.05 for an added buffer. JK I'm sure this isn't an option because of the relationship between SBD and Steem. Steem has fixed inflation. I thought that the entire point of having SBD would be variable inflation but I guess not.