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RE: How The Steemit Game Has Changed Thanks To A Rising Steem Dollar
very interesting post. I would sell my SBD because I read in the white paper that when SBD goes over 1.10$ there is negative interest on holding it.
So i would earn in SBD and then cash out.
negative interest? How is that carried out?
I don't completely understand the principles behind this but this is why the Steemit.io whitepaper says:
"The primary concern of Steem feed producers is to maintain a stable one-to-one conversion between SBD
and the U.S. Dollar (USD). Any time SBD is consistently trading above $1.00 USD interest payments must be stopped. In a market where 0% interest on debt still demands a premium, it is safe to say the market is willing to extend more credit than the debt the community is willing to take on. If this happens a SBD will be valued at more than $1.00 and there is little the community can do without charging negative interest rates.
If the debt-to-ownership ratio is low and SBD is trading for less than $1.00, then the interest rate should be increased. This will encourage more people to hold their SBD and support the price."
Wait a minute... that actually suggests that they would have to incorporate something they haven't done. It doesn't suggest such a mechanism exists yet, let alone is in operation. The interest rate has been as 0% for some time.
Thanks for the info.
True, which is why I am bit confused
It reminds me of the Fed's dilemma with negative interest rates, because essentially these are the same dilemmas. They dont have the tool's to do it yet, but are theorizing its possibility (esp w/ Europe already doing it). It would come down to whether or not the risk was great enough to do it. I'm not sure if it is for Steemit. What's the problem with a rising SBD again?