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RE: The Rate of Steem Backed Debt Issuance is Too Damn High
The only thing I like about this post is that you spent 10 SBD promoting it. For that reason alone I'm not downvoting it, but I'll point out that it is disseminating bad information about the platform.
You have a long way to go in understanding the SBD system. Please read the many posts by myself, @timcliff, @clayop, @abit, and @dan / @dantheman (sorry if I left someone out here; not intentional). Many of the statements in your post and comments are confused, misleading or just plain wrong.
Upvoting my own comment for visibility. I'll burn the reward.
Is there any mechanism to reduce the amount of SBD? It is issued at a constant rate, and it attracts currently between 2.5 and 3% It is gaining on Steem at this rate. The internal market is not the only influence on the SBD price either. External demand for it also drives the price up and this requires the increased issuance.
I think it would be a good thing to get a clear statement about the mechanism and the competing theories about its effect on price movements from people who know it better than I do, of course, I am being slightly over the top in order to provoke a debate that settles or at least makes the issue more accessible.
conversion or burning (including promotion) both reduce the amount of sbd
my theory is that it is has minimal influence on the price and is way overemphasized by people looking for a scape goat to explain the declining price (when the real reason is investors just not wanting to buy in, enough, at this valuation).
SBD introduces leverage and that has an impact on the price (increasing, slightly, price movements both up and down), but the leverage ratio is tiny, currently about 1.045x, with a cap of 1.1x. That's almost nonexistent leverage, not even worth considering very much.
@smooth hmmm I thought it's stable now
anyway .. could you please check your chat?
I sent you a reminder thank you very much ...
EDIT: thanks for getting back at me!
But you have to multiply that leverage by the ~4.8% from the market cap proportion, to get the daily cost, or, how much steem has to be sold to hold that 4.8% which grows at 4.5% (1.045x is 104.5%) on top of currently 3% formerly 10% APR on the SBD.
It is accelerating, because nobody has a reason to burn it, and assumptions in the business logic and the general theory of it say that this acceleration does not matter, but it does. It is selling tomorrows steem for today's SBD. Which means as SBD goes up in proportion the Steem must also grow in proportion.
I think the real rate at which SBD is piling on liability to Steem is more like 1.048 * 1.045 gives you 9% at current SBD quantity. With 3% APR paid on top you get 12.8%. This comes out of every bit of money that comes into Steem, and ends up sitting in an exchange proxy account continuing to get paid interest at 3%.
Why the flag. Waiting for explanation. Ugly it turns out. @smooth
Thank you.
There's no flag, at least not by me
Look from you set. If you accidentally, then clear the flag. Thank you .
https://steemit.com/photography/@dman57/the-original-photograph-mucha
You believed. It's insulting like that .
Clear the flag
Uncheck the flag. Thank you . Waiting for an answer .