SBD Conversions Are NOT Profitabe Anymore!
With the plummeting prices of Steem our blockchains debt ratio went over 10% which activated the haircut rule that is making SBD conversions less and less profitable. Instead of looking at SBD at the price of 1$ now, the blockchain slowly but surely gives less than 1$ per SBD as the debt increases. This diminishing effect increases alongside with the debt ratio.
If you still have a running conversion, depending on when you initiated it and how the markets move in the mean time, you might lose some of the SBD you started with.
My last conversion lost me around 6% while the first gained 4% and second gained 10%. In total, through three conversions, I got 40 extra SBD on my initial "investment" of 500 SBD. Not bad for inputting my password a couple of times and burning some SBD.
At this point SBD conversions aren't profitable
So, don't initiate any future conversions until the debt ratio falls under 10%.
When that happens, I'll let you know through another video!
Cya in the next one.
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Thanks. I have stopped converting now, because I have no sbd anymore. haha. But I'll be waiting for your video when it's definitely profitable again.
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hahha yea, better wait, for now :D
Yup, that's a good idea. I will let you do the technical calculation, haircut and so on and so on, I will just follow your recommendation. Thanks.
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Great! I will be on the lookout and will notify you whenever I notice a change for the better.
I'm glad to finally understand what to do and when. As I've always been in doubt about these conventions :)
They have been removed from the UI for a reason. To prevent users from losing money. We had a chance to earn some % a couple weeks ago but nowadays it's just too risky and a real gamble.
So happy people are thinking to the others too. Not just for their own safety :)
I wouldn't call it not profitable cause it is still possible to take profits, it's just more like a lottery right now
But even Smooth himself said it:
And trust me... If someone knows a thing or two about conversing - it's definitely Smooth
So maybe we should follow this advice:
Obviously it depends on your starting point as well - if you started with your SBD from the wallet then its understandable
With the current market situation and the haircut I wouldn't suggest my followers to do something that could potentionally lose them their hard earned and HODLd SBDs.
You got the lottery part right.
What smooth is suggesting to be a 5c profit could easily be eaten up by a little decline in STEEM price at, or before the conversion takes place. Remember that median price, or the average STEEM price at which you conver the SBD to STEEM, needs time to update. Sharp drops lose you the amount of the drop if it happens in the wrong time. If enough time passes, this effect is diminished. If not, you are fucked.
With that in mind and the haircut, a chance to lose up to 25% or more, for a chance to gain 5%, is not profitable deal in my book but a gamble and something I wouldn't suggest anyone to do at this point.
I have started my SBD conversion on 24th november, if I converted this 13 SBD to Steem directly on blocktrades I was getting around 28 Steem, now let's see, how much I get from this hidden conversion.
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Now I'm interested to find out how much you will get. If you remember to, come back here and let me know :D
Haha I will :D
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Received 31.538 steem.
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For how much SBD?
13
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Then you didn't lose anything
EDIT: Slight win :D
Very good friends ... I don't focus too much on this / because I don't really understand, I'm just focusing on getting the best place, friends, and lots of friends here,
Good thinking. Rather not loes money than to try and follow something yo don't understand :D
Yes my freind
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thanks for the insight. im not aware about the haircut rule. cheers for that brother.
Always glad to help
While I agree that the conversion is not the best option at this point, I continue to monitor the discounts available for SBD as the token is made to be worth $1 and I wouldn’t be surprised if efforts are made to maintain the peg in the future.
SBD won't be pegged at a 1$ any time soon in my opinion.
To get out of the haircut zone and back to full $1 pegging, it requires STEEM to go back up to about 0.413. Obviously a significant recovery/increase but not impossible.
Definitely not impossible but, with the current state of the market, I dont see it happening before another major push downwards before a bottom at an extreme low. These prices are manipulated intentionally through BTC and the umbilical cord it has with all alts. We havent seen the bottom yet, imo.
The other thing that happens is the break even price steadily declines as SBD get converted and the SBD supply drops. It has dropped from about 0.415 to 0.410 since I started watching it. So sooner or later it will cross with the STEEM price as long as STEEM doesn't go to zero. It still may take a while (or not, who knows).
Let us know when it's wise to do start up the conversions again. I did it profit last week I think but knew not to do it again. A reminder post would be helpful if conditions change.
Will definitely do an update if/when things change!
Thanks for sharing the update. Let's hope the fall is over!
Np. I feel like we need to have another dramatic decrease in prices before they start gong up for good. Let's seehow the cryptogods play it out :D
thanks for sharing this :)
it's a nice way to increase your numbers 👍
It's NOT.
At least not under this circumstances.
later when there's a chance :)