Why is the internal median price stuck at 0.19400?
Crypto prices have fallen dramatically over the last 48 hours, an Steem has not been immune to this. As of now, the Steem market cap has declined to USD 50.7m.
Due to the distinct feature of Steem, that we have two native crypto currencies built into our code - STEEM and SBD (or three if you include MVests as well) - of which one (SBD) is supposed to be a stable coin, the current STEEM vs. the USD price plays an important role in the Steem eco system.
The market cap of SBD - measured as 1 SBD theoretically being worth 1 USD, is not allowed to exceed 10% of the total combined market cap of the two coins. Once 10% is reached, no more SBD is printed as rewards. Instead, additional Steem is printed. Also, SBD can no longer be coverted into Steem at a theoretical level of 1.0 USD - which is normally the case. Instead, SBD is losing its US Dollar peg and can only be printed at the rate, which implies that its market cap is 10% of the total market cap.
This feature is necessary, as it could otherwise destory Steem. How is this? Very simple - at the moment roughly 7m SBD are in circulation. Consider for a second that the market cap of Steem would drop to just 6m USD. This would mean that inflation would become sky high, the price would drop, the market cap would get even lower - a viscous circle could start.
The measure for these calculations is not the current Steem value, but the average price of the last 3.5 days - at least I think so. While this is moving less volatile than the current market price, it should none the less move avery second - however - this does not happen!
For a couple of days now the median price seems to be stuck at 0.19400. This means that at this level SBD continues to be printed - which at least soon should not be the case anymore.
First I thought that this might be related to the seldom change of the price feed by the Tron soch puppet witness - but the seem to update now. I am thus looking for the reason, which is causing this.
I suspect that the witnessed not only provide a current price but that they also submitt an average price. My speculation is that the TRON Sock Pupett witnesses simply do not adapt this price - and as they operate the majority of top 21 witness, this means that there price is the median price. But this is pure speculation - so if you know the answer , please help me out on this one. And if my speculation is right, maybe somebody should tell Justin Sun to do what a proper witness should do...
In case I should have made any mistakes in my thinking, I would also be glad to get your input...
All the best,