SBD (Steem Dollars)

Steem Supported Dollars works unless the price of STEEM drops suddenly. But the latch can also break upwards. A year ago, the SBD was launched on several exchanges outside the internal Steem market. The result was a wildly speculative rally that was sent for $ 14 for a short time.

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After that, I clearly stayed over 1 USD for months. SBD was originally designed as a mechanism to protect vendors from short-term fluctuations of STEEM. It has proven to be a suspicious offer.

SBD had to be fixed in the US dollar. SBD stands for Steem Supported Dollar. Blockchain is trying to prevent the SBD's price from falling below one USD. There are two mechanisms to accomplish this. One of them limits the speed at which the SBD is printed.

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When the market value of all existing SBDs exceeds 10% of the market value of all STEEMs and SBDs (this ratio is called the SBD debt ratio), the system stops printing the SBD completely. Another mechanism is the 3.5-day conversion process in which an SBD is converted to STEEM at a USD. The conversion process is not guaranteed when the debt ratio is above 10%.

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