Houston, We've Got Too Much SBD! - Read What´ll Happen Now!
You might have noticed it already. Your Post payouts suddenly don´t solely consist of Steem Power and SBD anymore but of liquid steem as well. That´s the case due to the so call Steem Dollar Stability Enhancement.
So at first this doesn´t really sound bad at all as it seems like you just get some Steem instead of SBD. Due to the fact that SBD is massively overvalued right now it actually means though that your Post rewards in USD will decline over the cause of the next days and weeks.
As the Blockchain always sees SBD being worth 1$ we´ve enjoyed bigger Payouts the last months. But now that we get paid in liquid steem this advantage will slowly vanish as the blockchain always treats steem at its current value. To put it in a nutshell, a payout of 10 SBD could soon be worth only about 5 Steem.
Now that we are already worse off people get liquid steem on a daily basis, which they might possibly start to dump, leading to a further decline in price and hence lower post payouts again. It´s a spiral that´ll continue until the supply of SBD will be reduced to less than 5% of the supply of steem.
For that to happen a massive amount of SBD will have to be either burned through post promotion (no voting bots - The Promotion button!) or converted via the function that got taken off the steemit frontend some time ago. Alternatively 100% Power Up Posts will help to reduce the issue as well as no liquid rewards will be paid.
Unfortunately I don´t see anything of that happening as long as SBD keeps being overvalued as everyone keeps hunting for more SBD. That being said I´m more than just curious on the eventual actions taken through Steemit Inc and our Top 20 Witnesses!
In case you´d like to get all the details about it, you may check this article from dan. I´ve used it as a valuable source and it´s definitely an interesting read:
https://steemit.com/steem/@dantheman/steem-dollar-stability-enhancements
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It's simple, get rid of SBD. Pegs don't work.
I agree, they never should have made SBD publicly tradeable. That's when it became more and trying to 'centralize' and control the value is a waste of time and resources.
the second it became transferable, it also become publicly tradeable.
you can't stop a coin from being tradeable unless you set it so that it can't be transferred between parties.
I think I'm inclined to agree with you - it kind of adds a level of complexity without adding much actual benefit.
Totaly agree with you
Currently the ratio SBD Supply / Steem Marketcap is only 2.21%. So why the excitement?
Still not sure how all this works but thanks for the explanation. I have a slightly better idea now then 5 minutes ago. Just when you think you have a hold on things something crazy changes! Lol 😂 That’s life! Thanks for the post!
In case you´re interested into the details of this functionality then I can just recommend you to take a look at the Post of Dan that I´ve linked above. It´s explained pretty easy within it.
Wow, great write up bud! I was curious why they did that. Good explanation, thank you!
The why is actually quite easily explained. As SBD are backed by steem a certain range has to be maintained or otherwise the whole system implodes.
So, why have SBD at all? Seems like an extra step in a system that really doesn't need it. Like the 2 dollar bill.
Why do you say SBD is overvalued? Didn't get that. Also what's better to use for bots -- SBD or Steem?
@steembusiness, I think that change could create a huge problem as you said. For me we need to flood the rewards with SBD until the value gets next to the dollar, since that was the main idea, but now, with payments with STEEM that could creates a huge dump.
Wish I had that problem. LOL
unlike the ones that you say, I have noticed that the last month the voting has diminished remarkably, therefore the beginners like me are very sad.
DO you think it is better to hold steem or sbd then?
That's a very good question. Let me know in case you find an answer on it cause honestly, I got no idea 🙈
In agreement with you