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RE: Please crash more, dear Steem.
I do not know the mechanics but assuming sbd is as fucked as one would believe it to be and the system is not able to compensate or whichever it is entirely possible it can go lower, @exyle did a video about this recently and seems if it goes lower we will get more steem in exchange for less sbd? So damn drop SBD drop.
SBD won't drop much lower, when it drops below $1 it starts earning interest so it basically shouldn't really ever drop below $1 for long at all. STEEM on the other hand could very well drop lower
Oh so that is what exyle meant with they then need more steem to cover the debt? "interest" . I am going to try and understand this , but maybe in the grand scheme as someone who kinda just posts stuff I should not be to concerned with any of it . https://steemit.com/witness-category/@eonwarped/sbd-debt-ratio-10-behavior
No that's not what he meant. Interest creates more SBD to encourage holding it. And not all witnesses may agree to set an interest rate (also I forget where the interest comes from... and how it gets distributed) The real mechanism propping SBD is that the conversion mechanism lets you swap the SBD for 1 USD worth of steem. So it incentivizes people to buy SBD and use the conversion to get more STEEM than they would otherwise get from directly buying STEEM.
Exyle's post talks about the case where you don't actually get 1 SBD worth of steem when converting (which is when the debt ratio gets too high).
I am going to shut up now, and just stalk everyone's comments instead until I can fully understand this :) The conversion method you describe does make things a bit more clear thank you.
They pretty much sums it up how the SBD is working. Give those answer a good digestion.