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RE: QUESTION TIME | How is new SBD created and who determines how much will be made? |
It's determined by how much liquid Steem the blockchain owes. If the blockchain owes 50$ worth of liquid author reward then it creates 50 SBD regardless of the price of SBD.
Some witnesses have began broadcasting a biased pricefeed.
So it's automatic and has nothing to do with trying to bring the price of SBD or ratio between SBD/STEEM down?
What do you mean by how much Steem the blockchain owes and how does that increase/decrease?
So each witness can set his own price for SBD? I still don't get how does this work, could you referr me to a post where I could inform myself a bit more?
If the Steem blockchain owes you 50$ of liquid reward it will give you 50 SBD.
The witness pricefeed is provided by witnesses. I think only the top 20 pricefeed are taken into account. The pricefeed is usually updated automatically by scripted ran by each witness. Those script take the price of Steem from different exchanges and calculate the average price between those exchanges and then the pricefeed is published by the witness account.
Currently the pricefeed is 4.873 SBD and this means 1 Steem is worth 4.873 USD and not 4.873 SBD.
The pricefeed is the average price of the witnesses during the last 3.5 days.
An example should make it clearer. Let's say the price of Steem is 50 cents according to the witness pricefeed. The pricefeed would be written as 0.50 SBD.
Let's imagine you have a post that is going to reward you with 50$ of SP and 50$ of SBD.
The blockchain is going to pay you 100 SP and 50 SBD. The blockchain knows it needs to pay you 100SP because it knows the price of Steem looking at the witness pricefeed. The blockchain is not looking at the pricefeed of the exchange directly but it's relying on the pricefeed of the witnesses.
If the price of Steem is 2$ according to the witness pricefeed then the blockchain is going to pay you 25 SP and 50 SBD.
If there is an average bias of -50% pricefeed then the blockchain is going to pay you only 25 SBD if it owes you 50$ liquid. This is one way the price of SBD can be influence. The other way is if the market price of SBD is below 1$ then the witnesses can increase the % of interest on SBD.
The best place to read about all of this would be the Whitepaper.
Thanks for such an extensive answer, finally something that clears everything up. Much appreciated!
Ha, I read the whitepaper just now and got almost none of this out of it. Also read the blue paper and the whitepaper for SMTs which is how I assembled some of this information. One problem with the whitepaper is it refers to getting tokens instead of specifying if that token is steem, SBD, or SP. The whitepaper also does not answer anything about the creation of SBD or SP through content and curation. I understand that steem is generated at a predicted rate via inflation and most of that goes to the reward pool. I assume some of that is put in as powered up steem immediately (though I honestly don't know) and the rest is placed in a market contract ready to have SBD pay for them, but I can only guess that SBD are generated from thin air and have nothing to do with the rate of steem inflation. It is just that based on the amount of content and curation the blockchain determines how much a specific activity should be paid.
There are still some unanswered questions for me. Is SP functionally the same as steem. ie. at the very least is steem destroyed when powering up and SP destroyed when powering down (or is the same token being set to the appropriate state - powered up or powered down)? Are SBD created from thin air through the blockchain? Is the blockchain attempting to regulate this by setting a price for all actions based on the market value of steem created through inflation? ie. say $1000 worth of steem created through inflation. If there are 10 equal actions each of those actions earn $100 but if there are 100 equal actions each action earns $10?
I'm not sure what you read because so much of what you said isn't in the whitepaper is in the whitepaper.
You might want to read my explanation of Steem. It explained how Steem works.
https://steemit.com/steem/@teamsteem/steem-an-in-depth-overview
I assume you think your words make sense to everyone because they make sense to you. But I assure you that you did not answer my question, your post, though information filled did not answer my question, and the whitepaper also does not cover what I am asking about.
For instance, your section on Reward Pool does not explain what goes into the Reward Pool. Is the Reward Pool explicitly just Steem that is created via inflation, because that is how it is typically described? Your description of the reward pool makes it sound like SBD are also part of the reward pool. Also, you can't just say Steem (aka Steem Power) (from your post) because it isn't the same. Unless it really is the same but it constantly described as not the same elsewhere. You interchange Steem and Steem Power a lot in that paragraph. Do I get Steem or do I get Steem Power? Is the conversion a state transfer or a destruction/creation event. When I read that inflation is used to fund the Reward Pool is it that SBD and Steem power get created directly in this inflation or is this some hand wavy thing where there is more to the process?
I am looking for a more detailed description of how all these things get explicitly created and converted that does not use general terms like token when they are talking about something specific and I cannot find this description.