RE: Thoughts on STEEM-Backed Dollars and Holding the Peg
Good post. There is definitely a good argument to be made about 'just leaving it alone' (for now) and I think you did a great job articulating it.
If you are not aware, it is not ideal to be converting your SBDs to STEEM on the internal exchange. You will receive much less STEEM using the conversion function in your wallet than you would selling the SBDs on an exchange, then purchasing STEEM. This will also put downward pressure on SBD prices and upward pressure on STEEM prices. If you wish to convert SBDS to STEEM, consider using an external exchange. It would be beneficial for yourself and both currency prices
Just a few small things regarding the wording here. Users can use the internal market (or internal exchange - depending on what you want to call it) to exchange/trade SBD for STEEM. The internal market (as far as I know) is usually fairly close to market value, and is not tied/related to the peg. What users don't want to do is convert. This is the process that takes 3.5 days, and provides "approximately one USD worth of STEEM" based on the witness price feeds.
Yeah, my understanding was that you generally get better prices on the external exchanges. But I can change that. I don't want to scare people out of using the internal exchange entirely!
Internal or external is usually very close to equivalent in value. I would choose based on what you are trying to do. If you want to cash out SBD to fiat, go ahead and use external because you're going to need to go external to get to fiat anyway. If you want to use that SBD to get STEEM to use or power up, then use internal (fast, no fees, no risk of funds being lost due to exchange problems or transfer errors).
Either way, your advice to not convert under these conditions is the most important point. Not only does it hurt the user (who gets less) but it hurts the system since it takes SBD out of circulation.