Pros and Cons of SBD Convert Function

in #steemit3 years ago (edited)

steemit-pros-and-cons-of-sbd-convert-function.jpg

Steem Dollars has for a short while dropped below $1 and many discussions have been stirred as to why doesn't Steemit.com re-introduce the functionality which was removed from their front-end back when SBD was around $7, I think. Any way, much higher than $1.

I admit I was in favor of it, now I am a bit reluctant. When some experienced steemians say the SBD convert function is for advanced users, and average users should use the internal market or exchanges instead, there is a good reason for that. You will see what I mean from the pros and cons below.

First of all, if you don't know, what is this SBD convert function?

The SBD convert function is a Steem blockchain function which converts 1 SBD for 1$ worth of Steem. That's the short version. But we will expand on this below.

You may be surprised, but here's what I found as pros and cons of using the SBD convert function:

Pros

  • Debt-to-ownership (i.e. SBD to Steem) ratio lowers
  • A user with a high amount of Steem Dollars, have a guaranteed price of conversion to Steem, without going through the internal market or the exchanges, to find buyers to match their high volume of sell orders (in which case SBD price would fall significantly if they want to execute immediately, and they may even not be able to sell the entire amount)
  • The conversion can be profitable if SBD price is below $1 and if Steem price remains relatively constant or drops over the following 3.5 days
  • Market price isn't disrupted when high amounts of SBD are converted to Steem (although possibly Steem price may be under pressure because of the higher amounts available, if they are kept liquid and not powered up)

Cons

  • if SBD price is higher than $1, conversion becomes unprofitable; for sizeable packages of SBD, conversion can still be less unprofitable than going with them on the internal market or on the exchanges (depends on many factors, like available time, SBD price, daily volumes, size of the package to sell, market conditions)
  • currently not an accessible way to use the convert function by the average user (possibly not a con)

What do you think? Should this function be re-introduced for the whole mass of users, on the Steemit interface? And if yes, under what conditions?

If yes, I'm inclined to make it a disabled option when the conversion is not profitable, and enabled when it is profitable. There's still the issue of being a delayed action for 3.5 days, which may not be very user-friendly for the average user.

If no, and I'd rather go with this one, how do you explain this decision in a way that an average person who thinks he's being deprived of an option to make profit can accept?

Here's a very interesting post I've seen after I wrote mine. Shows the whole enable/disable convert function and more under a different perspective.

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