Get 33% more STEEM for your STEEM DOLLARS
Let me explain this more simply so all users can understand, what other “technobabble” blog posts have mentioned.
We must remember that not all users on Steem have experience with exchanges, bid/ask walls, and other even more esoteric trading concepts and lingo. Steemit is targeted to the masses, so we need to make simple explanations visible to the users.
Recently there has been a shortage of STEEM DOLLARS, so they are fetching up to a 33% higher price than their intended $1 value; but Steem users must convert their STEEM DOLLARS to STEEM in the correct way in order to avail of this 33% bonus.
If you’ve earned some STEEM DOLLARS recently from your blogging on Steemit, then when you convert these to STEEM you have three choices of how to do so as shown below.
The ‘Convert to STEEM’ choice uses a weighted average price which will not give you the maximum bonus you could obtain today. The ‘Transfer’ choice is how you could sell your STEEM DOLLARS to a private party or transfer them to your account at another exchange to sell them on that exchange. Yet the easiest choice for most users is probably as shown below to choose ‘Buy or Sell’, in order to sell your STEEM DOLLARS for STEEM on Steem’s (internal) exchange.
On the next page, fill up the ‘Buy Steem’ form as shown below. After entering both the ‘PRICE’ and ‘TOTAL’ of STEEM DOLLARS you have available to sell into the box, the ‘AMOUNT’ of STEEM will be automatically filled in for you. Then you may click the green ‘BUY STEEM’ button.
Choose the price from the second list as shown in the example below; and make sure you choose a high enough price that offers to sell enough STEEM to complete your order.
By selling your STEEM DOLLARS for STEEM (or stated another way, purchasing STEEM with your STEEM DOLLARS), the value of your holdings can increase as the STEEM price does, which isn’t (normally supposed to be) the case if you hold STEEM DOLLARS. Subsequently, STEEM can then be powered up to STEEM POWER so you can earn a very high rate of compounded interest (much higher than the 10% APR paid for STEEM DOLLARS) so that your holdings of STEEM POWER is increasing all the time.
Note the 33% bonus appears to be an arbitrage created by the recent rapid increase in the STEEM price, due to the roughly 33% difference in the current approximately $4 price and the approximately $3 price when the bulk of the recent liquidity rewards were paid out in STEEM. The liquidity providers apparently have an excess of STEEM and need to obtain STEEM DOLLARS. So this arbitrage will decrease over time if the price of STEEM remains stable, declines, or the liquidity rewards are phased out. If the price of STEEM increases extremely rapidly while the liquidity rewards remain intact, the bonus could increase to more than 33%.
It's like using the money that I printed to buy more paper to print more money!
A quick read with solid suggestions, clear comments and, of course, valuable info for many! It is like a mini course in trading, thanks a bunch! Namaste :)
Brilliant !
That's some fine Steemjitsu, friend.
Nice but I believe the price of SBD already started to adjust due to a lot of people doing arbitrage. Depending on your skills and luck I believe trading steem dollars for bitcoin to buy steem and sell it for steem dollars on the steemit exchange will earn you somthing around 0-5% on each trade.
I just checked the internal exchange as shown by the screen capture in my blog, and the offering price still seems to be approximately $3 which is less than the roughly $4 market price.
I also explained in my post, that another quick rise in the price might increase the bonus again. So I think it is wise for users to check for this when they convert STEEM DOLLARS.
Also note I am gently encouraging users to power up, which is beneficial to the ecosystem.
Also my post serves as an example of how to explain to the general users so they can understand. Also it would be beneficial for them to understand what these recent posts have been about which I presume some of them (even perhaps most of the ladies) did not fully understand.
We need to remember to make our technical explanations approachable to any of the lady (or male) bloggers who aren’t as tech savvy, when the information applies to them.
We don’t want Steemit to slide backwards to the all male demographic of Bitcoin.
Great information here. Just sold my Steam Dollars for Steem at the rate of $2.98 - that is a major discount from current price of $4.10 at polo and bittrex!
Thank you!
@anonymint Great post! This helped me! I just powered up!
Choosing the convert to Steem Dollars is only intelligent when the price of Steem is increasing. We saw a surge in prices last week and so it was fortunate for any users who ended up converting prior to that.
We could easily see another increase or a complete fall (who knows, right?!) or see a sideways trading pattern emerge. Essentially, if the median price is more than the internal exchange, why would you want to choose the CONVERT option (which inadvertently destroys SBD supply).
Not sure what the best option is other than to educate people on their options.
only a couple points worth of free money for 90 seconds work. Oh noes!
Great post! It was very helpful thank you.
Nice guide. Especially like the tutorial screen shots.
I finally stumbled on real, complete and interesting article! Good job!That's what I personaly would like to read
Very helpful. I wish the exchange becomes transparent to the user. We need to get to a spendable wallet concept for Steem or integrate a Bitcoin wallet.
Cheers man, very helpful to know.