Ask exchanges to remove SBD - stop the debt issuance to the platform by making sbd convertible only internally.
You are viewing a single comment's thread from:
Ask exchanges to remove SBD - stop the debt issuance to the platform by making sbd convertible only internally.
I don't understand, unfortunately. Are people shorting Steem with the help of SBD?
No, actually it's a bit complicated for a sentence..haha sorry I would have elaborated.
SBD is causing a debt liability for the platform. Since SBD was intended to be pegged at $1 and has since broken that peg, there were unforeseen consequences. One, SBD is listed on exchanges making it subject to speculation - this was not intended to be speculatory, but rather a pegged token to $1 USD. Since SBD was being sent to exchanges to be speculated on and NOT exchanged on the Steem internal market (as it was designed to do) - that created an inflationary scenario for SBD. Example, in short, when I joined Steemit mid 2017 there were roughly 6 million SBD and now 12 million+. This is actually issuing debt, you see. Unless these SBD are exchanged internally, they are not 'burned' and therefor inflate the supply. This platform can no longer issue SBD as post reward because of this very issue, so it is a very real and ugly situation.
On Coinmarketcap, there is 319,715,143 STEEM and 12,711,201 SBD as supply. Steem seems to be much-much more inflated. I must suppose the problem isn't the supply, but the demand.
That is precisely the issue, Steem is by nature inflationary. The inflation is set for the next 20 years, however, with more SBD being issued inadvertently, this propels the set rate of STEEM inflation in a way that issues debt burden to the supply of STEEM. Basically, more STEEM must be inflated into the supply than initially intended, throwing off the set rate of inflation and creating a liability to STEEM token that was not prepared for.
The solution to this: SBD must be exchanged internally, this is the only way to burn the token and remove it from circulation. Essentially, we need to remove ~6M SBD from circulation this way in order to get it back to status quo. This would elleviate the strain on the inflation of STEEM and curb the unnecessary inflation that is currently taking place. We also need SBD to be once again pegged to $1. The platform was designed for this peg to function in order for the STEEM token to grow as intended. Obviously, the lack of initiative by Steemit, Inc has greatly stunted the trajectory of tokens, as well as BTC volatility. I remain cautiously optimistic that through these mistakes there have been lessons learned.