Abit Witness Steem Dollar Policy Change 2017-04-17, and a WARNING to Authors and Steem Dollar holders Again
Since the market price of Steem Dollar is getting a bit unstable recently (chart link for reference), I've changed my price feed script to dynamically adjust the "discount/premium" according to price changes.
The rationale is: an effort to maintain the peg (so one Steem Dollar will worth around one US Dollar), when Steem Dollar is too strong, try to create more Steem Dollars as author rewards; if it's too weak, try to create less.
I've applied a n^2 algorithm to amplify my effort, however due to the median feed design, the effect will be much smaller if most of other witnesses aren't acting near the same way (currently most of them are NOT, more info can be found here and here).
As of writing, according to exchange rates, one Steem Dollar worth 1.188 US Dollar, which means if one person has one Steem Dollar, she can sell it to an exchange now to get around 1.18 US Dollars worth of bitcoins. Last time my script published a feed with a 41% discount, which means if all witnesses are acting the same way and if the prices didn't change in next 3.5 days, the system will pay 41% more Steem Dollars to authors when new rewards are being paid out.
WARNING: Consequences of The Parameter Changes:
1. When Steem Dollars are trading beyond 1 US Dollar as present,
Total Supply of Steem Dollars will increase faster than usual.
You will earn MUCH MORE Steem Dollars than usual by posting
If you use the "Convert to STEEM" feature in your wallet, you may suffer a big loss. If you want to cash out your Steem Dollars, sell them to exchanges directly.
2. When Steem Dollars are trading below 1 US Dollar,
Total Supply of Steem Dollars will increase slower than usual.
You will earn MUCH LESS Steem Dollars than usual by posting
If you use the "Convert to STEEM" feature in your wallet, you may gain some more. If you want to cash out your Steem Dollars, it's recommended to convert them to steems then sell the steems.
More discussion / explanation is here: https://steemit.com/sbd/@timcliff/attention-sbd-converters-please-read-important-information-about-sbd-steem-conversions
//Update: changed my voting of Steem Dollar interest rate to 0.
(image credit: Kingroyos on wikipedia, under Creative Commons Attribution-Share Alike 3.0 Unported license.)
You are doing great things for the Steem and Steemit community. Steem Dollars with a different USD value than the peg will create unnecessary trading and the balance will be further disturbed. I surely hope the other witnesses will follow your example to keep things in balance.
Thanks for sharing this information and using real numbers and resources (like the charts) to help explain this.
Witnesses, do your magic ASAP! @abit thank your foe this sell/buy tips, most informative! SBD pump on Poloniex right now btw
Hi @abit, thank you for the informative post, I will keep your advice in mind.
That's interesting. I never really understood the mechanics of how this works. I'll have to keep this article bookmarked for reference.
By the way, what happens to the reward when you decline a payout? Where does it go?
I never stop learning about that kind of magic . Thanks for the info
me too mamma ! :)
me three :D
This is such a useful article. It helped me become a bit more clear on SBD and STEEM. Thank you so much for sharing! I'm going through the witness list to see who I should vote for. You're definitely getting voted for... thanks!!!!
Thank you for sharing the information. It's helpful. @abit
Never for this information. Never considered the value of USD in scenarios like this.
Thank you for this information ! :)