The Steemit Ecosystem: The Rise and Rise of SBD Market Cap!

in steem •  10 months ago

I wish to carry on the train of thought that I started in "The Steemit Ecosystem: Profiting from Pegging SBD to STEEM".

I haven't completed my calculations, but there is one recent phenomenon worth mentioning: the growth in the Market Cap of SBD!

Take a look at these two 30-day graphs of STEEM and SBD.

Notice how STEEM's Market Cap is tied tightly to its market price - you can barely see the blue line behind the green.

However, notice how, in the SBD chart, the blue line (Market Cap) has diverged from the green line (USD price).

This means that more SBD are being created. How is this happening? Well, they are being created every time a reward payout is made!

Remember that with 50-50 payout, you receive SBDs at 1 USD each, rather than the market price of 6 USD. So a payout, after curation, of, say, $12 will give you $6 of STEEM (1 STEEM) and $6 of SBD at only $1 each (6 SBD). Your total payout in US$ is thus $42 - when you see it in your wallet.

Exchanging such SBD for STEEM and then SP is what, in my opinion, has been driving the drift towards parity of the STEEM/SBD exchange rate.

However, what is going to happen if the number of SBD within the Steem ecosystem continues to rise... and rise?

Will people be cashing out their SBD, or will they keep buying STEEM and powering up to SP?

One thing I have noticed is that the external market reacts slowly to internal changes within the Steem ecosystem. This gives us an opportunity to profit from this slow-motion reaction.

images: coinmarketcap [1], [2].

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@rycharde manages the AAKOM project and the MAP forum.

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What a timely post. By the way, one piece of the picture:

STEEM rewards pot is fixed. What changes your payout is the USD price of steem (price feed set by witnesses) and the votes that shift around.

Thus, a higher price of STEEM means a higher rate that SBD gets printed. I've been trying to tell everyone that wants to hear this repeatedly, but this is a natural phenomenon and will equalize to the peg in the long run.

See this post for my long term analysis, and also for contrast, see this post about a possible short term correction.

Short but insightful :)

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It’s definitely interesting. It looks like STEEM is about to take over SBD in price

I remember the day when folks were worried that the SBD peg would be broken from the bottom! Back when STEEM was below 20 cents, we were watching the SBD price chart to see if it would plummet from around $1.00 and thus wreck it as a pegged asset.

It did plunge to about 75 cents or so but recovered. I remember the witnesses shrinking the APR rate for Savings to 0% in response.

A year ago, I never would have believed that the peg would have "broken the buck" from the upside.

If anyone needs to know: Steem-Based Dollars were designed to trade around $1.00.

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