Correctly Display the Estimated Account Value on Steemit.com
Correctly Display the Estimated Account Value on Steemit.com
Due to the recent price increase of Steem Backed Dollars (SBDs) (at the time I took this screenshot it was at $9.13 USD), many Steemians choose to immediately trade their post's pay-out SBDs for Steem via the internal market. This common behavior is simply happening because the SBD is supposed to be pegged to the US Dollar, so currently it's 813% [ (($9.13 - $1.00) / $1.00) * 100% ] above the price where it's supposed to be at. Good times!
However, since I'm doing the same thing I just described - trading SBD for Steem after a post pay-out - I noticed my "Estimated Account Value" is always going up after each SBD-to-Steem trade I do (which is strange). Now what's even stranger, is this: although (at the time of me writing this) the value of Steem is at $3.23 USD, meaning you would get about 2.82 Steem for every SBD you trade (or pay 0.353 SBD for 1 Steem), even if you would trade 1 SBD for 2 Steem right now, your Estimated Account Value still goes up, where in fact you would have traded at a loss and your Estimatd Account Value is supposed to go down!
What is "wrong" with the Estimated Account Value metric?
If we look a bit closer at the Steemit info text below the Estmated Account Value, it says: "The estimated value is based on an average value of Steem in US Dollars". So technically it shouldn't account - according to the text - for any SBD. Which is kind of odd, because any Steem account is also a wallet, so I argue it should correctly display its entire value.
However, I found that the Estimated Account Values does incorporate SBDs in its calculations, but at the wrong price!
Proof of the Estimated Account Value problem
I took the liberty of quickly 'screendumping' the public wallets of 3 of my friends (well, technically @utopian-io is a community in itself but I'm sure @elear doesn't mind!): @umais , @utopian-io , and @cnts.
-a- @umais
@umais' wallet is interesting because he just sold all his liquid Steem and SBDs, therefore his wallet only contains 67.428 Steem locked up as Steem Power. The Estimated Account Value is showing a value of $217.79, and therefore at this time we can safely determine that 1 Steem is worth $217.79 / 67.428 = $3.2299 (~ $3.23).
-b- @utopian-io
The @utopian-io wallet is also interesting because it only holds 0.651 SBD but 19,002.256 liquid Steem and 73,443.788 Steem Power, totaling as 92,446.044 Steem. The Estimated Account Value displays $298,601.37 and therefore (apart from the 0.651 SBD) apparently 1 Steem is worth $298,601.37 / 92,446.044 = $3.2300: same result as we've just calculated via @umais' wallet.
Concluding: because both @umais and @utopian-io currently hold (almost) 0 SBD, their Estimated Account Value is displayed correctly.
-c- @cnts
The @cnts wallet however holds 52.291 + 33,479.238 + 1.432 = 33,529.961 Steem, which by itself should result in an Estimated Account Value of about 33,529.961 * $3.23 = $108,301.774 USD. However, the @cnts Estimated Account Value shows a toltal of $108,983.74 so there's a difference of $681.966. Now that's exactly the amount (well, the difference is $0.001) of SBDs the @cnts wallet holds! However, 1 SBD is worth $9.13 instead of $1.00!
Concluding: the Estimated Account Value text is wrong (it doesn't show only the value of the amount of Steem in the wallet) and the SBD price is also wrong (the system currently counts 1 SBD as $1.- USD).
My suggestion to fix the Estimated Account Value
- change the text to "The estimated value is based on the average value of Steem and Steem Backed Dollars (SBD) this wallet owns, displayed in US dollars.", and
- correctly incorporate the actual average value of SBD instead of calculating 1 SBD as $1 USD,
- maybe add a BTC column next to all values on https://steemit.com/@ACCOUNT/transfers , to also display how many BTC (instead of only US Dollars) the account is worth.
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nice one mate.. i eat turkey over the festive period & watch poorly tv & the scipio files keep on a coming.. Love it! :]
@cnts just make sure YOU also keep on a coming! :-)
A very solid analysis, you showed your work, your conclusions flow from your observations – this is the sort of thing I want to see more of around here.
I wonder if the lack of downward pressure on the SBD isn't really just an indication of collusion by the witnesses? I don't mean that in a necessarily negative way, but since they're responsible for choosing what various economic inputs go into shoving the value of SBD up and down, it would seem that the absence of that pressure demonstrates a lack of interest in creating that pressure. For a measure of currency which is supposed to be floating around a relatively fixed value, SBD has been extremely volatile – and contrarily, STEEM has been surprisingly stable, despite being the currency that is supposed to fluctuate wildly.
Better on-site instrumentation would be the first step to getting a better understanding of these things.
Bravo.
Lex, I think the SBD-rise happened because of a Tether (exchange) hack where about $30 million in capital was stolen. There is quite some demand for dollar-pegged crypto assets, and since SBD is a good candidate for that, I think a lot of capital was transferred to SBD.
PS I just published another article here, with a completely different context, but in there I argue that I foresee a near-future where SBD could be a globally used mass-adopted currency. That article of mine is meant as another effort of mine to 'help Steem win' - the platform as a whole I mean! The article could use all the visibility it can get, so if you would have a look (even punch that resteem button of yours if and when you like it!), that could always help!
Cheers! @scipio
I suppose in the world of available cryptocurrencies, the prevalence of a dollar-pegged commodity would be something that a lot of people would want as an anchor.
Which would also go on to explain why it has not maintained those earlier levels. One could then also theorize that overall levels of STEEM will not actually increase, because the new investors have absolutely no reason to exchange it, because the only thing that you can buy is more power on the Steemit side of things. SBD will remain a temporary value holding until they can move it out into something more useful.
Makes sense.
I'm a little leery of efforts to "help steem win" in the main because I can't give full throated support to the platform as it stands. It's not terribly good at the things that it promises to do and it has some really huge vulnerabilities. I can pitch it to some of my creator friends as a way to accrue some funny money score as a form of feedback on how many people like your work and how much – but that's about as far as I can go.
I'm glad that it really excites you. Someone around here who is not a cultist should be excited. Just avoid hopping on the hype train, continue to let the numbers speak for themselves, and I think it could work out.
Because, solve this issue is not easy as we think.
Ask it on the witness channel in the steemit.chat. The problem has been already been discussed.
You can see this one. https://steemit.com/sbd/@aggroed/the-benefits-of-inaction-a-defense-of-a-high-sbd
it's not about collusion but manage a peg in free market is not easy. Even some central bank cannot really manage a PEG.
The problem is that your post doesn't actually support your position here.
It really is as easy as we think. The witnesses have complete control of ratio and several other financial connections between STEEM and SBD. The problem is that there are multiple desires about the endpoint and so far the only thing that they have been able to decide is that SBD running extremely hot is the best thing for them and the other 35 people on the platform that matter.
And by "matter," I mean the current currency sinks that hold 95% of the SP on the platform.
It's absolutely about collusion in the purest sense of the word. In fact, more so because there is a vast sink of STEEM which is utterly nonliquid, ready and waiting to be leveraged into applying pressure on that very same market – pressure which is completely nonnegotiable outside of the top whale engagement with the blockchain.
Observably, judging people by their actions and not what they tell me, I know they have absolutely no interest in pushing SBD values back down toward $1 USD. If they had interest in doing it, they have the tools to do it – and they haven't done it.
Very simple and straightforward deductive reasoning.
Is letting the SBD float high good for us, that is people who aren't holding 95% of the SP and thus aren't receiving 95% of the rewards?
That's the question that your post tries to answer.
But about whether or not the witnesses are involved in keeping the SBD high which seems to run counter to the original intent of valuation? There's no question of that. That's happening.
It would be a lot easier to trust that the people involved know what they're doing if things like showing the valuation of the currency on the website which holds the wallets was meticulously maintained to be accurate. Trust. It's something we could do with more of.
For myself, I feel like the decreased difference in value between the STEEM and SBD is providing a fair amount of friction for people who would normally be converting their SBD into STEEM and thus into SP – pointedly the only way to gain more actual influence and power on the platform. Does it look bad when the people who are in charge of and clearly have control of that cost gap seem to be working to minimize the ratio and thus erect barriers for more people to work their way up into higher SP brackets?
The door is open for questions. It looks bad.
Thanks for sharing. The SBD calculation is definitely confusing. I watched a video with Dan Lerner explains that the SBD was only meant to be a guarantee for $1 of Steem per SBD. I need to look into it more. Confusing but I like exchanging SBD at the moment.
Hey @scipio I am @utopian-io. I have just upvoted you!
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Woowww.. Very most big steem power..
Awesome..
@scipio
At present, the rate of steep dollar has decreased, I do not know what will happen after a few days. What can you say? @scipio
Nobody knows for sure! ;-) But what I think, is that - eventually - SBD will go down to $1.- again, but also that Steem will take its place, so I'm thinking the price of Steem will - also eventually - rise to about $15.- to $20.-
Yeah. Very Interisting.
I've made a similar analysis here https://utopian.io/utopian-io/@evildido/chronique-d-un-witness-un-bug-dans-l-affichage-des-recompenses-50-50
In fact, Steem blockchain consider the peg as always true and the convert process uses the peg instead of the real value of SBD. This is why the conversion has been disabled on condenser. Some people previously use it instead of internal market.
It's not a display issue but a bad behavior in the blockchain.
I also noticed this and had wanted to bring it up
Nice job
it's good analaysis. wonderful writing man.
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