Several witnesses have agreed to routinely make any necessary SBD interest rate updates at the beginning of each month and I have joined this agreement. The purpose of this policy is to ensure that everyone has an opportunity to collect interest (which can only be done once every 30 days) before the rate changes. Credit for the idea goes to @pfunk. (To collect interest, as long as it has been at least 30 days since your last interest payment, you must perform some SBD transaction (or SBD savings tranasction for SBD savings). This can include sending funds to yourself.)
Only in exceptional circumstances will we make any interest rate changes mid-month. While this does mean people may not always be able to collect interest before the rate changes, we will try to minimize this, but everyone should still be aware that the SBD interest is explicitly a variable rate which can, in theory, change at any time.
Accordingly, on January 1 I plan to reduce my APR from the current 6% to 4%. I will also reduce my price feed discount from 3% to 2%. Reasons for these changes can be found in my previous witness update posts, especially the most recent one.
I believe 2% is still likely too high a price feed discount for current conditions, if all witnesses were using a discount at all. Unfortunately, that is not the case. Several witnesses have been using 0% (or in a couple of cases even a negative discount, which I don't agree with at all as it violates the smart contract intent to allow SBD to be redeemed for one USD worth of STEEM). The lack of a discount provides no conversion incentive despite the still relatively high debt ratio and the need keep to the debt from growing. Since the feed is averaged between witnesses, if others are too low, I feel I need to err on the higher side.
I would very much prefer to see witnesses agree to maintain a small discount of likely 1% or less, but still sufficiently above zero during higher debt conditions to offer enough conversion incentive and shrink outstanding SBD supply. During low debt conditions, the discount can be brought all the way to zero to discourage conversions and allow the SBD supply to slowly grow.
Over the past month or so I have sold a net of about 15000 SBD from my stability fund (formerly containing 25K SBD, now about 10K) in order to reduce the SBD price when it has drifted above 1 USD. During periods when SBD is experiences fluctuations below 1 USD, I plan to support the price by purchasing more SBD for the fund.
My internal market maker bot has continued to provide continuous service with less than 1/2% price spread. It has now completed approximately 20000 trades. I plan to continue increasing the available trade size, but I have only been doing this slowly for now.
I worked with several other witnesses, most notably @abit and @bhuz (EDIT: also @aizensou) in testing and identifying performance problems with the new ChainBase implemention of the Steem node software, particularly on low-memory and low-I/O-speed systems. We were able to find good workarounds and have recommended these to witnesses and node operators experiencing problems (see @abit post for more details).
Rewards from this post (in whatever form received -- STEEM, SBD, and/or SP) will be converted to SBD and burned, as were previous witness post rewards. Proof of the burn will be posted as a comment reply.