Steem proposal: Possibility to transform from STEEM to SBD in order to reduce speculation

in #utopian-io7 years ago

sbdproposal.png

Many people are very happy with the rocket price of SBD... I'm worried! why? because the SBD was created to be pegged to USD, and it is not working very well. You may say: Julian, but it worth more than a dollar, this is good!... mmm, I think each coin has its function, and the function of SBD is to be pegged to USD, it is very important and I will tell you why.

USDT vs SBD

For the people that don’t know, USDT is a coin that worth 1 USD, and its value is very well pegged. For this reason it is used in all exchanges to simulate the dollar. The problem with this coin is the way that it is backed: A sum of real USD is in a bank, and we have to trust in the creators that it is true... when they put new USDT in the system they have to save more USD in the bank, but they do that? maybe yes, but I want a new way to thrust.
In the last post of @jerrybanfield, he told us the benefits of SBD over USDT in terms of backing... and this is good, the SBD are backed by STEEM in a transparent way for all. But we have a problem... suppose that I have 1 BTC and I want to save them in dollars, which coin do you choose? I can’t choose SBD because it worth $10 now, and tomorrow maybe goes back to $1, and I will loose money. The people change to USDT because it is very stable.

If we can make a stable SBD we can attract more people to invest in STEEM, because we can be a good alternative to USDT.

How SBD works?

SBD means Steem Backed Dollars... meaning that when do you want, the blockchain will give you an amount of STEEM worth in 1 USD by each SBD. It uses a smart contract. For example, in this moment the STEEM is worth in 2 USD, then if I transform 10 SBD the system will give me 5 STEEM (5 steem x 2 = 10), but if the STEEM is worth in 1 USD, then the system will give me 10 STEEM (10 steem x 1 = 10).
And you may ask: If it is worth in 1 USD, why we see this hype of 2, 6, or 15 USD? Because we have a reduced supply, that makes the SBD scarce and that's why its price goes up.

Proposal: Transformation from STEEM to SBD

One thing is true: If the value of SBD goes under 1 USD it recovers its value easily, because the people will use the contract to transform them in STEEM worth in USD, then there is no way to lose.

Thanks to the contract the SBD has a floor in 1 USD

But we cannot do the opposite: Transform from STEEM to SBD. The unique way to get SBD is through the rewards from authors and curators.

There is no contract to limit the ceiling of the SBD. We need one!!

convertToSBD.png

The time to transform for SBD into STEEM is 3.5 days in order to reduce speculation. We could do the same in the opposite, or even add more days, maybe 7 days to transform STEEM into SBD.

Redirecting the bullish movement

In this moment we have 2 bullish movements: One in STEEM ($2) and one in SBD ($10), this last is very high. If we introduce my proposal, there will be a chain reaction:

  • The people will transform their STEEM into SBD (using 1 STEEM the blockchain would give me 2 SBD, and I can sell them for 20 usd).
  • That STEEM is destroyed, then its supply is reduced and the shortage will cause its price to rise.
  • The new supply of SBD will cause that its price goes down, until stabilizes in 1 USD.

In conclusion, all bullish movements will be transformed in a unique strong bullish movement in the STEEM price, which is very good, STEEM to the moon! And on the other hand, we will have a strong well pegged SBD that will create much more confidence.

What do you think?

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Posted on Utopian.io - Rewarding Open Source Contributors

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Steem is based on largely the BitShares codebase, and SBD is based on BitShares Market Pegged Assets. MPAs on BitShares are much more stable than SBD because they allow creation on demand by anyone willing to lock up the necessary collateral. SBD was simplified (and made less stable) so that it could be easily issued directly as post rewards by the network rather than being backed by individual users.

Thanks for your reply and upvote ☺.
Yes, the assets on bitshares like bitUSD are more stable. I would like that on Steemit

Thanks for your replies. Today I found this old post by @timcliff that proposes the same

https://steemit.com/sbd/@timcliff/saving-sbd-proposal-to-restore-the-usd1-usd-usd1-sbd-peg

The discussion taken over there is very interesting, and many people agree, but there is no comments of the heads, like @ned.

I have another solution: seize up SBD exchange!

Now that SBD if for peg USD, why put it into exchange? why exchange SBD with USD? We don't see USDT/USD or bitUSD/USD exchange pair right?

SBD should just be pegged asset, not trading asset. Seize up SBD trading, let STEEM be trading, while SBD always pegged to USD under the control of price feeds.

This is not possible. The SBD was created for the e-commerce. Then it has to be exchangeable like the steem. And if it is exchangeable then the exchanges will make a pair with the usd.

but, why we not see USDT/USD pair? or bitUSD/USD pair?

Look the USDT/USD pair. And also it is on kraken.
Both USDT and bitUSD are not exactly 1 USD, you can consult their price (paired with usd) at coinmarketcap.com.

Oh, thanks.

USDT and bitUSD are pegged well, while SBD failure, it's interesting...

@jga adding the ability to convert both ways opens us up to more problems than we hope to solve because then the conversion process could be gamed both ways.

Thanks for your reply.
Today I just found this post proposing the same

https://steemit.com/sbd/@timcliff/saving-sbd-proposal-to-restore-the-usd1-usd-usd1-sbd-peg

Maybe you are right but we could add more days for the conversion, or maybe limit the total amount possible to convert.

I think this things are directly related to the market demands

Hi there jerry, awaiting your contributions on utopian!

@jerrbanfield, would you be willing to review my suggestion and see if there are gamification problems, or other issues that I didn't think about? Thanks!

https://steemit.com/speakyourmind/@josephsavage/pegging-sbd-to-the-dollar

Maintaining parity to the USD isn't all its cracked up to be.

https://fred.stlouisfed.org/series/CUUR0000SA0R

From Oct 2016 to Oct 2017, the purchasing power of the USD dropped at least 2.2%

I think STEEM can do better than that.

Yes the USD drop and drop. We need to change to another type of asset like bitcoin or steem.
But the definition of SBD is to be pegged to USD no matter its price

You don’t seem to take the internal market into consideration. When I trade my SBD there I am getting six or seven Steem. The Steem stays here (to increase my SP), while the SBD I traded gets sold on the exchanges.

Yes but we still have a problem, the sbd is not well pegged to usd. IMO we need to solve that in order to have a strong economy.

Justo ando investigando sbre las consecuencias económicas de que el SBD no cumpla su propósito de ir a la par del dólar gringo y encuentro tu post. Es una solución sencilla, pero aún no comprendo bien sus posibles consecuencias. Mientras me sigo informando para no tener una opinión descuidada de todo esto. Saludos.

Hola, a mí también me gustaría profundizar más sobre posibles alternativas y sus consecuencias. Precísamente ayer leía un post muy interesante de @lukestokes sobre este tema. link.

Otra forma de ayudar que esté unido al dolar es permitir que los curadores y beneficiarios reciban también los pagos en SBD, ya que actualmente solo reciben steem power. Los autores son los únicos que reciben SBD actualmente. Aquí lo detallo más, y también @timcliff lo apuntaba para el caso de los beneficiarios (issue github).
Un saludo.

Gracias por el enlace, es justo lo que he estado buscando ... yo apoyaría el interés negativo, para que el SBD se vaya diluyendo. De todos modos es una opinión descuidada. Parece que a la mayoría no les parece bien eso y prefieren esto del libre cambio entre las dos monedas de steem.

Thank you for the contribution. It has been approved.

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