Do Your Part For Steem, Destroy The Debt!!
Debt is never a good thing and steem has a serious problem,
SBD Debt Ratio Per STEEM Whitpaper
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)
A chart displaying STEEM debt ratio since june 25th 2017, from this post by @buggedout
The STEEM DOLLAR Purge Begins : This is what we need to DO
You'll notice in this chart that in the space of two months the SBD debt ratio nearly tripled!!
An important mechanism for the STEEM system that was left disabled even though the SBD price has been around $1 since August 7th.
If the rate rises above 10% will be seriously damaging for the economy and difficult to mend once breached, in comparison the average ratio was 1% for the longest time as little conversions were done by the masses through the steemit.com site helping keep the economy in check at little cost individually gaining back with growth of STEEM
Since the onsite conversion was disabled its not as straightforward to convert SBD > STEEM, there are two options either use Third-party tools or CLI_Wallet.
Tools to convert SBD > STEEM
Steemworld : I Tested the Convert SBD Function Yesterday Using SteemWorld
Steemconnect :How to convert SBD into STEEM using SteemConnect
CLI_Wallet
How to use the Steem CLI wallet(2016)
Does SBD haircut mean that SBD will no longer be convertible for 1$ worth of STEEM?
Only for less than 1$?
Why was the conversion option removed from the wallet interface?
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you are correct,
will always be a loss in the amount of STEEM from converting and would lead to death(debt) spiralling out of control as very few will pay to reduce debt.
P.S i notice you using upvote bots on comments, some problems with using this way
Why?
If there will be a run on SBD in the form of a big enough conversion, the amount of debt will decrease.
The flopped HF20 transition also set the system back to SBD creation, which means the debt has been reduced.
The recent orcas war also keeps reduce the amount of SBD creation (and STEEM creation with it, but it seems that the usual SBD creation is faster than STEEM creation, in terms of debt ratio maintenance)
Your post was more relevant prior to HF20 than yesterday.
About the flags, I still have a few open spots for new people to play with.
The bidbots that you use usually result in a loss, not the bidbots that I use , unless you factor the flags, and even then it was mainly them that brought me from 3 STEEM to where I am.
no the DEBT RATIO is currently 6 times the average 1% as last year SBD moved from $1 peg this is when conversions were stopped as users had heavy losses using onsite conversion
at one point it was 10 to 1 SBD to STEEM, so you only got %10 using onsite conversion this time.
by right if the system is worked properly by the witnesses SBD should never deviate too far from $1
this is controlled by witness SBD bias
you started with 37 STEEM not 0 but i can see you made some into powerup
not liquid so you cant measure as profit until is powered down this is what i mean by all factors
crypto is in downward trend and not stopping soon
I have no clue about this debt ratio (is it total SBD divided by total STEEM?), witness' bias, and how SBD conversion to STEEM worked or works now.
If it incurred losses on users, it means that eliminating it from wallet's interface was the just thing to do.
Why let people use an interface full of landmines?
I started with 3 owned STEEM.
Organic upvotes helped me, but the majority of what I made came from bidbotry.
Well the DEBT RATIO is as important and should be updated as much as price feed as it effects the economic workings of the site adn was designed this way
you can see here the current BIAS% (How much extra SBD is printed) by witnesses
if SBD goes over $1 top witnesses should adjust bias to print more and keep system stable
the interface wasn't the problem, the problem was top 20 witnesses decided not to enforce SBD BIAS to print more to keep price stable when SBD moved past $1.
But if more SBD were to be printed then, would not the debt problem that we have now been much worse?
no because the onsite conversion would not have been removed and users would be incentivised to use as you make more STEEM
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Thanks for the shout out.
According to steemworld.org the current debt ratio is 6.278% and while there has been some SBD conversions going on I expect that number to slowly creep higher post HF20.
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