What if we used the SBDs created every day in the DAO to buy and burn STEEM?
There is a major unused resource that the STEEM community could potentially put to very good use...
For those that do not know, a portion of the newly created inflation every day is distributed out to the DAO.
The DAO stands for Decentralized Autonomous Organization.
IE, it's automated and not controlled by a single entity.
This inflation to the DAO is in the form of SBDs (steem backed dollars), and as you have likely noticed, SBDs haven't been paying out on the steemit.com platform for some time now (6 months or more).
The original idea was that the DAO could be used to fund development/projects built on steem, but in reality when it was in use we have seen the vast majority of projects take in way more value than they ever deliver to the ecosystem. In fact, I think they all have. Ideally, only something that gives more value to everyone in the ecosystem than it takes in is funded.
The interesting thing about SBDs is that they have continuously been trading for more than a dollar on external exchanges for several years now...
The astute observer might see that we have "overpriced" SBDs continuously going to a fund that historically hasn't been capable of funding beneficial development and think to one's self, perhaps there is something else that can be done...?!
Something else can be done for sure!!!
My proposal...
I think we should take the newly created SBDs each day and funnel them instead to a service that buys and burns STEEM.
IE, the service would collect the SBDs on a daily basis, use the Internal Market to buy STEEM, and then ship that STEEM to the null address.
This would eventually start to pull more and more STEEM off the external exchanges and start to raise the price, plus it would help slow down the supply increase, or possibly even reduce it, depending on the amount of STEEM that could be bought and burned on a daily basis...
This is interesting to me because it would benefit the entire community equally. Everyone who participates in STEEM would benefit from this proposal which is unique in itself in terms of proposals tending to only benefit portions of the community.
Now the hard part...
There are some details that would need to be worked out.
Who would run the account that is suddenly credited with all the new SBDs meant for the DAO each day, and/or who would create the automated service that would execute this, and finally, what checks and balances would be put in place to make sure this service is not abused by those running it?
If we can figure out answers to the above questions, I think this would be a great use of the DAO funds.
It would likely raise the price of STEEM over time which is positive for everyone involved in the ecosystem and it would be done using a resource we already have, just aren't taking advantage of currently.
Lets make it happen!
What do you say?
Image Source: https://www.investinblockchain.com/steem-steemit/
Most of us would agree on this idea This was floated around sometime last year as well. However, getting this through and making STEEMIT remove the vote on the return proposal would not be an easy task to achieve, unfortunately.
Not a single entity is what I believe should happen. Both this and the service to buy and burn STEEM should be set up by multiple trusted entities. A multi-sig account that requires the approval of all entities involved.
Yes, I floated it a while back as well, and no one said it would be easy. Though I am not so sure it must be done with them removing the upvote... it may be possible the community could pull this off.
nice
These are good ideas
Hope All witnesses and users in steem can come up with good suggestions to put this into effect to be able to burn steem.
It will be healthy for our ecosystem if we can make it happen
The time has come for something to be done
Who will manage this?
There must be trusted witnesses, who are selected as a team for this process of dealing with SBD to buy steem on the single market and then burn steem
It should also be done with some knowledge of trading as many could increase the value in their selling prices expecting to be bought with this program.
The ideal would be to look for gradual price targets, to consolidate the floors and burn as many STEEMs as possible with the available SBD, not generate a spike that vanishes the same day (as it usually happens in Binance when the STEEM price rises.)
So the manager must produce confidence and have a good strategy.
Well the idea would be to use all the SBDs that flow in daily, so there wouldn't be any market timing aspects to it, just use the SBDs as they flow in regardless of STEEM price etc.
I was referring precisely to the domestic market. Suppose a person has in the market an order to sell 10kSTEEM.
Let's suppose that currently the heaviest selling order in the internal market is 0.08SBD and the amount of SBDs in the DAO is enough to buy 10K STEEMs at that price, but the news spreads that this will be done whenever SBDs are available, then the shrewd seller withdraws his order and places it at double the price, as we are going to buy as soon as the SBDs arrive we would be buying and burning 5kSTEEM instead of 10K.
If on the other hand we set a gradual price target we can set buy orders instead of taking the sell orders, and gradually increase the price of the buy order as the price consolidates, that would burn a larger amount of STEEMs with the available SBD than if we just go and take the existing sell orders, that's what I meant to express.
But it's just an idea, I could be wrong! Or there could be better strategies of course.
In my opinion, the way to do it would be just a continues flow of sbds to internal market buying all steem available on the ask. As this service is continuous it would be difficult to game, just one continues buying of steem available on the internal market. The internal market is mainly run by bots that are continuously replenishing their supply of steem as buy orders take them out, and this replenishment of steem eventually comes off external exchanges. If things get mispriced on the internal market vs the external markets then users will likely arbitrage the difference to keep the prices close.
Agreed. The idea of having the SBDs used to buy STEEM on the Internal Market adds a level of transparency since the funds never have to be shipped off the platform to another exchange etc. It all stays here, buys the STEEM here, and then ships to the null address, all verifiable here on steemit and steem.
And as far as I know it can be done without a hard fork
Correct, we just need a proposal... and that proposal to be approved by the powers that be.
While recently we do not see SBD in our payout I was not aware that the certain amount of SBD still been produced. The question is who owns it, whom that SBD belongs. If that belongs to the Steemit Inc. then it depends on Justin what to do with it.
If the Steemit Team and Justin are interested in that then again it depends on them how to do that buying Steem for SBD and then to burn. Should that be first clarified before starting planing?
CC: @steemcurator01
10% of the overall inflation goes to the DAO (Steem proposal Fund) in the form of SBDs. These funds are community owned and votes from the community dictate where they go. Currently there has been a proposal blocking any use of these funds currently, and that has been a good thing. However, I think for the right use case, and I think this is the only use case I would support these SBDs being used for, we could get a proposal above the one currently stopping the SBDs being used and see some benefit for the community.
It is again, something that I would say majority do not know. When you say
Who will do that proposal and who approves it?
Good questions. There is some more info in this post I just put out as well:
https://steemit.com/steem/@jondoe/using-the-dao-sbds-to-buy-and-burn-steem-how-we-can-make-it-happen
The funding for proposals in the DAO is decided by user's steem power. If you get your proposal above the return proposal, it gets funded.
This post has been featured in the latest edition of Steem News...
A bot that simply initiates a buy transaction whenever it has SBDs and initiates a transfer to null whenever it has Steem should be relatively easy for someone to implement, and really straightforward for anyone to audit that it's doing its job by just using a block explorer. So the bot itself probably doesn't need to be a super-high-trust operation, as long as people keep an eye on it and remove their votes from the proposal (thereby cutting off the bot's SBD supply) if they notice any funny business.
Yes agreed. We just need someone to take initiative on this. Any interest? It sounds like all we really need to do is get the bot setup, create a proposal, then get upvu and rme (maybe a couple more large sp holders) to vote for the proposal and it is off and running...
Personally I wouldn't want to have to find a server to host the script and be on the hook to keep it running (restarting it if it crashes, etc). If I already had some other Steem project running where I had already figured that stuff out then it probably wouldn't be a big deal, but I haven't done that yet so I wouldn't want to commit.
Fair enough. I have been in talks with a couple witnesses that are already doing exactly that and said they could get it up and running in a couple days.
Good conversation and initiatives shared here with a sole idea of returning the STEEM token to it's high value. Now it is time to match words with action.
The right question here...
The system to buy STEEM and send it to null is not something hard to code, with a very single script it can be done and could work on daily basis to avoid accumulating SBD and being misused later
Now we need a group of trusted users to hold authorities and run the bot securely👌🏻 it is a pretty good idea I think
Yes, pretty much what I was thinking. As far as top witnesses/trusted users, Steemchiller, Justyy, Roadofrich, xpilar.witness, upvu.witness, pennsif.witness, remlaps, rme and bangla.witness would all get my vote to be part of that team... Symbionts would not get my vote.
Thanks for the vote of confidence!
In principle, I agree with your proposal, but I have implementation concerns.
As you alluded to, my main concern definitely centers around who could be trusted to execute the transactions. Years ago, lots of people delegated funds to @sbdpotato, trusting the owner to maintain a circular set of transactions buying SBD, then converting to STEEM, then buying SBD, etc...
After the 2020 hardfork, I think the account has been using those funds for dlease rentals, instead.
Your proposal is better because it doesn't have the same permanency and the spigots can be shut off by simply removing a proposal vote, but I'd still want to see it done through the use of tools like Smart Contracts or a multisig wallet with signers who have diverse interests.
Also, I have a feeling that the price of SBD would drop to $1 pretty quick when the market learned that the initiative is being implemented.
I like all suggestions that could potentially benefit STEEM. But let's simulate what will happen if this proposal is implemented. Every day a certain amount of SBD will be sold and STEEM bought. The price of SBD will start to go down and STEEM will go up. The whole community will know that SBDs will be sold all the time. It will no longer make sense to keep SBD and everyone will rush to sell them as soon as possible. This will cause the price of SBD to fall more rapidly and the price of STEEM to rise more rapidly. Eventually the price of SBD will fall below $1. As we know, under these conditions, 1 SBD can be exchanged for an amount of STEEM equivalent to $1. Absolutely all authors will receive SBD and massively use the opportunity to exchange them for a larger amount of STEEM. As a result, the emission of STEEM will increase significantly. Authors will start selling more STTEM and no further price increase will occur. The price will begin to fall due to strong selling pressure. In my opinion, this offer will be useful until the price of SBD approaches $1.
The service can always be stopped if/when SBDs fall under a dollar...
Yes, probably this is how it will be necessary to act.
Ideas worth exploring.
Who has the ability to implement ideas?
Where does SBD come from?
The SBD is being issued to the DAO/Proposal Fund, you can see it here https://steemitwallet.com/proposals
That's a great idea my friend, one of the best I've seen. Increasing the price of STEEM at the same time will produce more SBDs maybe this will end up negatively affecting the price of SBD who knows, but it would be balancing the price balance between SBD/STEEM which at some time had an equal value (close to 7$). We sacrifice the SBD price (hypothetically writing) to improve the STEEM price which in my opinion is of greater importance to everyone.
On the other hand a significant increase in STEEM price could make the ecosystem more attractive to new users and potential investors and after a certain price for STEEM would stop paying liquid STEEMs which in turn decreases the amount of STEEMs available in the market.
The obstacle is also well raised... after the sad history of steemit inc thefts and recoveries of funds I think the levels of distrust are sky high, so .... is difficult to implement at the level of development and trust... but not impossible.
Yes exactly. One could make the argument that SBDs should be pushed back down to a dollar anyways. This would help with that while pushing that value lost into value gained for STEEM.