Deeper Look at STEEM Price and SBD PeggingsteemCreated with Sketch.

in steemit •  2 years ago

Introduction

In the last 30 days, STEEM price has dramatically decreased from $0.60 to $0.18 by 70%, which is much greater than designed inflation rate, which maybe around 7% a week currently. Some blame the devs saying the devs are dumping their shares, or some others point the whales' powerdown as a cause, but these arguments are not supported by actual data. This post attempts to provide some insights and to clarify what is happening to STEEM and SBD now by deeply looking at actual data.

Looking at Exchanges

Exchanges are good starting points to find the way because most of trades happen in exchanges. Using a exchange list in Exchange Report, I collected deposit/withdraw amounts during the last 30 days(9/24~10/23), and aggregated them. The results obviously tell that STEEM has very strong selling pressures, -45,645 STEEM per day on average, while SBD has more buys than sells, +3,510 SBD per day.

STEEMSBD
Net-1369347105295
Daily Avr.-456453510
Buy1545162559826
Sell-2914509-454531

Now focus on STEEM first. The net amount of -1.36 million is consisted of 1.55 million of buying and 2.91 million of selling. Then a question can come up, "How much did the devs sell?" Here is the answer. The devs sold about 527k STEEM, which is 18% of the total sold STEEM. Meanwhile, top 50 whales sold about 452k STEEM (Not precisely calculated and not 100% is from powerdown), which is 16%. Interestingly the biggest seller is smooth-c, who are doing SBD conversion, followed by kush (it is not kushed) who did the same SBD conversion. Including my bot account, these three accounts devoted to SBD conversion consist of 31% of total sell amount.

STEEMPercent
Dev-52748518%
Whales-45234916%
SBD Conversion-91360931%1

Regarding SBD, 52% of buying is from the SBD conversion accounts, 291k SBD out of 559k. So it seems the converters work properly. Roughly assume that daily average volume is 20k, they bought about half of them(9k SBD) to improve SBD pegging, and thanks to them SBD has 3.5k buying pressure on daily average.

SBDPercent
Dev57841%
SBD Conversion29126852%

However, a question poped up in my mind, "Why SBD price is slowly increasing or fluctuating while buying pressure is positive?" So I looked into deeper.

Imbalance of SBD Market

Shortly, I think that the cause is less competition in bidding SBD. During the last 30 days, there are around a hundred accounts whose net transfer amount is positive (presumably they bought SBD). In contrast, sellers are over 800 accounts, eight times more than buyers. In addition, top two buyers (or can be one) consists of 52% of total buy, while top two sellers consists 34%. Given less competetion, buyers do not have to bid up their prices, since sellers are more likely to decrease their prices or dump SBD competitively.

Additionally, sellers are more prone to sell because SBD was given as rewards(so feel like free money) or they need to cash out for paying projects (like steemfest who sold 75k SBD(17%) during the period).

What Should We Do?

This is totally free market so we cannot blame anyone about the price. While SBD conversion is one of the cause of price decreases, it is also part of Steem system and it improves the debt ratio and SBD pegging. Steem even gives an incentive for doing that with price feed discount in order to have better pegging. However, if this less competition continues, we are going to give free money to SBD converters at the expense of STEEM price decrease (the top converter said he earned about 3% overall, and he is converting over $50k per week). We urgently need more participants who compete each other for buying SBD.

I Will Do...

I already provided SBD market making bot to encourage more participants and keep SBD price stable. I am running the bot and put around 7,000 SBD. From now, as former top 19 witness, I will buy SBD at least at $0.95 regardless of potential losses, since previous witness income can compensate part of the loss. If I elected top 19 again I will increase the minimum price to 0.97 and will regularly add funds from my witness income. I hope others (especially witnesses who can be considered as staffs of Steem) will gladly participate and help SBD conversion.

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폴로거래소를 비롯한 가상화폐거래소에서 스팀달러거래를 철수하고 스팀달러거래는 스팀잇 내부거래소에서만 가능하게 하면 어떨까 싶습니다. 스팀달러를 현금화하고 싶으면 내부거래소에서 스팀으로 바꾼다음 현금화하면 되니까요. 그래야 페깅의 효과가 있지 싶습니다.

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훌륭한 아이디어 입니다.

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상장하고 폐지하는 것은 거래소가 결정하는 것이기에 여기에 대해서는 어떻게 하자고 할 수가 없는 듯합니다.

Well this is still misguided criticism....
As a meter of fact smooth is still buying SD at about 7 to 9 % higher than he should .... I cannot know if he indeed made 2% return but the numbers show that if he indeed did, it was a pure luck!!!
What he is actually doing is - reducing the loans of the network using his own stake (while he should leave the witnesses to come up to the right parameters - which are 14-17% discount rate based on the last week/month/3 months price data) and let the network print as much new STeem as is needed.!!!!!!!!!!!!!!

And yes, this is your right to buy SD at 0.97....0.99 or 1.05. The point is - you will be over paying from your own pocket for SD.
SD is designed to be worth less than a dollar... much less. The last "improvement" (aka witness discounting the price) by @theman simply shifts this discount from appearing in the market price to the network printing more Steem per SD .

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This is not a criticism, you maybe guided by your prejudice. I am also doing the conversion, and once I made +7% but yesterday I made -7% due to a huge price drop.
Yes, I will be buying with my own pocket, BECAUSE I got supported by the community financially from the community and I think it is appropriate to spend the money for the community in this tough time. (you may know that witness income was over $60000 and is still over $6000 per month, which is much much greater than server costs and maintenance costs)

We cannot blame a person who does not sacrifice his/her benefits. However, we'd better choose one who gives up a part of(or all of) his/her profits over a person who does not.

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sure, as I said* you are free to sacrifice your perceived but unattainable income (unattainable for 104 weeks or so) any way you want/wish.
and yes I am fully aware that witness pay is/was outrageous (reaching millions of dollars per year at one point and a server cost of $100. $100 if you want to be over over over protected) and no one gave a shit ass about this over payment.

And no, you did not get support from the "community" to become a witness ... you got support from @theman (and his 20 friends)

But at the end of the day what really makes me mad is that smart guys like you get sucked up and taking the loss for a bad SBD design. Bad design by full of himself idiotic moron.
But then again in the pyramid realm of BM he will pay you off by being part of the clique in the next project.....

Not sure your analysis is 100% correct, but ya got my last witness vote for the effort :)

Steem On..

Well, you have my vote (actually, you had it already)

Btw, I think you have a typo: in the second last section you have "expanse", where I think you mean "expense"

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Seriously? Wow.

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Fixed, ty!

Same. You've got my vote, too. You're the first witness I've seen speak up about it, lay it out in terms that were easy to understand, and suggest a solution.

I appreciate your thoughtful analysis and transparent leadership on this issue. Thank you @clayop
@shayne

Thank you! Very interesting article!

Very good post. I just voted for you witness. My price projection for STEEM was $0.05 around December 15th. It is falling way faster than I expected and might get there a lot sooner. I fear that STEEM will enter crypto nuclear winter.

Above my paygrade.
I just convert everything I earn to SP.

Great point. Great idea. You already had my vote. And may soon be one of the few who does keep it.

Is there a way to verify if witnesses are doing this?

I would like a way to verify.

I will remove my witness vote for anyone who doesn't do this. I need to be able to know who is and who isn't.

Those who take tons of community dough and don't give back to fix the free money they take and inflation issue, then they won't get my support.

Please let me know. Peace.

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I checked your list and can say that, you don't need to change your vote! ;)

Quality post @clayop I just did a demurrage post today to try and fight the inflation that we'll keep feeling for some time to come yet.

I recently joined, many do not know and may not understand everything, but is it possible to solve the problem of falling prices in the market only injections?
As far as I know, if you go against the trend with any capital market that you simply crush. It may be only temporary, with no long-term infusion order price adjustments necessary for the purposes which are not more.
The problem, I think, a deeper: Stiim fixated inside yourself, without having substantial output to an external. The solution may be trading on Stiim and SBD. Something like an online store, an MLM company or the like. This can lead to a demand for Stiim and SBD and align market.
Sorry for translation (Google), and I could not have correctly understood the problem ...

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Watched ...

  1. And advertising? Or only when someone address?
  2. The site is easy to use, but without development. And just to have a website is not enough.
    Very damp site. There is where the statistics on it? And the same banal referral spread?
    Because not enough and that the site is also directed to the domestic turnover, on those people that already know about Steem.
    I understand that you need to increase user numbers, but this is difficult without financial interest.
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I'm not sure what exactly you mean. All of this is being developed by interested users. Maybe Blockpay is more what you want.

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No, it's not exactly what I wrote.
Do not just sell P2P, and on the principle of Oriflame or SFI companies: network marketing, but with different principles of attraction (no compulsory purchase in any way, the lack of career growth thresholds, etc.). Net interest in advertising currency on a financial basis.
Naturally, we need stores (more than one) for selling Stiim, ease of transfer rates in Stiim (well, sort of market there), and the other attributes of real business, but for Stiim.
One call, that it is safe, quick little anonymous.
For example, in Ukraine (and not only) 90% of the population had never heard of any of Bitcoin, or other distributed electronic currencies. And the market there - 30-35 million people !!!

I don't know enough to know if you are correct or not in your analysis, but I respect greatly that as someone who has taken money out, that you would rather protect a long-term investment, than take the money and run.

Here is a post on highly successful people and you show many of these traits. I hope we are all successful here, but if not I am sure you will be where ever you go.

http://www.forbes.com/sites/danschawbel/2013/12/17/14-things-every-successful-person-has-in-common/#54f0e7ff22fa

From now, as former top 19 witness, I will buy SBD at least at $0.95 regardless of potential losses, since previous witness income can compensate part of the loss. If I elected top 19 again I will increase the minimum price to 0.97 and will regularly add funds from my witness income.

You have my full support!

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Thanks for your supports! Now I am on 19th, so I changed my minimum buying price to $0.97/SBD. I will take effect once the next round begins.