The debt ratio gets fixed at 10% but the effective price at which the chain issues Steem per SBD goes lower as more Steem is created. We have seen it go from $0.42 to $0.41 to $0.40, and if conversions happen in large enough amounts we will see that effective price go lower.
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Yes, but that makes sense because the debt ratio should come down with more conversions reducing the haircut a little.
@timcliff replied.
Agreed, it does make sense, but it creates the avenue for inflation that is much higher than the community expects.