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I think you understand this better than I do - can you give me an example situation where having more expensive SBD would be bad?

Right now is a good example. With bitcoin booming, anybody who wants to protect their profits needs a place to put their money that won't lose value -- and SBD is generally supposed to fill that role. However, right now SBD is guaranteed to lose over a third of its value as it drifts back down towards the peg. So now one of the key use-cases for SBD is broken.

Ahhhhh. Got it. Thanks for the explanation!!