You are viewing a single comment's thread from:

RE: My thoughts on the SBD price and a potential witness intervention

in #sbd7 years ago

Thanks so much for considering adding me back. I really do appreciate that.

As you've probably seen, I had a large discussion about this and tried to argue from first principles as to why a pegged asset is valuable to this ecosystem and could be even more valuable in the future. I also try to recognize what, if any, opportunity costs we're paying right now as a platform for not having a stable peg history which others in the future will look to and expect in order to trust SBD.

I've yet to see many witnesses directly advocate for crashing anything. That's clearly not in the best interests of anyone. In reality, the witnesses have very little control or influence on how the SBD is priced because it's being controlled mostly by speculators. The white paper outlines our job as witnesses to enforce that peg as best we can, but there are not platform tools to do so on the upside when speculators "manipulate" the price up (to use language from the white paper).

It's really interesting to hear this discussion described as interventionist considering I'm mostly labeled a voluntaryist and anarcho-capitalist. The last thing I want to do is be an interventionist! I'm all about letting markets do their thing. I'm also about long-term value and making the hard decisions now for greater benefits and reward pool payouts in the future. Incentivizing the value in STEEM increases the reward pool for everyone, including curators. If curators aren't doing their work, more people may rely on SBD vote bots which could increase the noise and decrease the signal as far as finding quality content on the site. My current stance is to wait for the SBD to naturally settle back down as best we can and then, once no one feels like anything was taken from them, implement some tools for us all to use (such as a two-way conversion) to enable that peg to actually work. That, to me, will keep value in the STEEM token which is the best, long-term investment for everyone who is serious about this platform and not just here to cash out some quick winnings. Otherwise, having two speculative tokens doesn't make as much sense to me.

When I get SBD, I sell them right away for STEEM or something else. I want to continually add sell pressure there while thanking the speculators for their contribution of value to our ecosystem. I also want to use services again which charge via SBD without having to second-guess the value contribution I make later. tipu, steembay, steemvoter, steemsql, and others are examples of services I'd like to see do well, based on something stable they can count on when paying for real-world service costs. If they float their prices based on market demand for SBD, then they may get stuck holding the bag when it comes time to pay for hosting, etc.

The SBD rally changed all that - everyone is making money now, not just a select few.

I think this may be a misrepresentation of how we got here. I remember when STEEM was at $0.20 or less and the entire rewards pool had very little value to distribute. What changed is STEEM went up 46x in value. The fluctuations in SBD (7x-10x, comparatively) didn't increase the rewards pool for everyone, that was done via the price of STEEM, according to the blockchain code. The high value of SBD is a nice bonus, for sure, but ultimately it's the value of STEEM that increases (or decreases) the entire reward pool for everyone.

Also, when you listed witnesses who support a strong peg, that, to me, is a little misleading. Unless they are directly buying SBD to support the price, they have little ability to do anything, just like the rest of us. I think the price of SBD will eventually go down as more of it is printed, just like it has in the past, and there is nothing a witness can do about that. I've talked to people saving SBD thinking it's a bad time to buy STEEM, but they may feel terrible if SBD (on its own) goes back to $1 and they feel they lost a 3/4 of their value. This witnesses, as far as I know, see the value of a pegged asset. They just don't want to make any changes until it already comes back down to $1 over time without a separate mechanism for injecting more SBD into the market at a quicker pace (such as reverse conversion would do). That's essentially the same position I have, unless the community demands we do something to support a stable peg prior to that point (and so far, I've only seen most people in the community arguing to leave things alone).

Thanks for the heads up about @air-clinic. That sounds fantastic, and I think I'll add them to my witness delegations.