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RE: The trouble with SBDs - a poll
I think the situation is more nuanced than this. The white paper mentions that SBD is a debt instrument and that the currencies may be unstable if the amount of SBD is to high relative to STEEM (once SBD goes down to sub 1$ range)
I support the peg but the instruments to get there involve increasing the supply of SBD. It's okay as long as the tokens are controlled. The white paper elaborates on this further about how it could go badly (ending in massive steem creation and crashing the value).
I don't fully understand this yet but will be exploring it in a future post.
Increase token supply would not be bad if this were an organic growth. But it is not.
I think this pump may be a feedback loop from whales taking SBD payments to raise your rewards, redeem, rinse and repeat. If that's the case the solution would come from adjusting reward proportions.
Auto-vote and vote buying is everywhere right now. This ain't good long term.
Think about it: It is now profitable to buy SBD even at this insane prices, post some shit, use the SBD to upvote it, redeem.
So you are saying, SBD is desirable now for use in vote bots that upvote any shitty post you make for more than you put in.
This is a good point, so let me see if I can understand what that means for the market.
Actually I'm not sure I understand how this does anything market-wise. Yes, maybe there's some demand for SBD to carry out this procedure but this profitability depends on propping SBD value up and nothing more than that. This feedback loop is not different than the usual speculative pump feedback right?
I may be wrong but I think there's a correlation between irrational SBD prices and the current self-voting situation.
How else would you explain that people are buying a token at 10x the price it is designed to be?
Oh absolutely, I am not disagreeing with you at all. I was saying that just like a regular pump and dump, this is not a sustainable position.
We seem to have to wait for the irrationality to blow over. I realize I also didn't address your main point that in these conditions printing more SBD does not necessarily help, and I also partially agree (we can probably afford to print some more, but the amount I am thinking is probably insignificant in the big picture of the pump).
The best part is this all is that to the credit of crypto, SBD cannot be arbitrarily printed willy nilly. There are controlled processes :)
They are probably buying SBD to buy STEEM? And they are probably doing that because they expect STEEM to rise in the future.
(I am new here; I am assuming that STEEM can't be directly bought in an exchange)
STEEM can be directly bought on any exchange that lists SBD
You're right, those are the instruments available, but anyone I have talked to is extremely reluctant to even consider it, and it appears to be that that is why they adopt the backstop perspective. So what you are talking about, if I could shove it into a category, is still respecting the peg.
Looking forward to your future post.