That doesn't work at all at significantly above $1 (say $10). No one will spend SBD worth $10 when retailers are pricing in SBD unless they are uninformed (and that is just taking advantage of noobs, who will end up with a very bad taste once they figure out what happened). So either it stops being used altogether, or it stops being used for pricing and becomes a regular effectively-unpegged token with a dynamic exchange rate. It would be mostly okay for a small premium like 1.01-1.10.
Also, nobody would design a token like that, nor objectively think it would be useful. This is essentially just rationalizing the flaws in the existing design with some claimed (but really not very realistic) benefit. (Okay an exception might be retailers who could get some extra value from it, but again, doing that by ripping off less informed users is not a good long term approach from a system-wide perspective.)
What system do you want? You seem to be knowledgable
I'd like to see SBD work better than it does. The upcoming hard fork has a couple of somewhat minor code improvements, additional code improvements can be made, and some improvements may come implicitly from scale should Steem (hopefully) grow larger.
I think it is pretty useful even without a perfect peg, assuming the peg is at least approximate. For small purchases a few percent fluctuation doesn't really matter. For large purchases people will adjust to the exact market price, but that's okay. Over time I think we can get there.
Should you and other top witnesses not setting price feed bias percentages, with a SBD Debt Ratio at 6+% ... there is to much steem being printed.
Or is it that you and the witnesses know this an play dumb? Because at 10% the SBD floor will be gone, and a bail-in is just what you guys want so that users and community be pickpocketed?
Who else is going to pay to bring that 15+ million SBD Debt down? Who is going to burn it?
Looking forward to your answer.
There is no basis for a price feed bias at this time. Nothing in the white paper (even accounting for subsequent changes in the consensus rules or understanding of the economics) would suggest it. Setting that aside, if a price feed bias were used, let's consider how that would work:
The rest of your comment is largely incoherent.
The SBD smart contract includes (since almost two years) the possibility that (based on 10% market cap) SBD may shift from being pegged (if imperfectly) to USD to being pegged to STEEM. If and when the ratio subsequently decreases, it returns to being pegged to USD. Any SBD holders who don't like taking that risk not only had the opportunity to sell over the past nine months at prices as high as about $10 but can still sell or convert at about $1.
Everyone is in the same boat here, we would all like the price of STEEM to rise. But if it doesn't the system includes reasonable rules for how to handle that situation with respect to SBD.
People may burn some coins (for example see the promoted feature) but that certainly isn't part of the consensus rules. No one should count on any amount of coins being burned.
BTW, referring to SBD as a debt instrument or debt-like instrument is an analogy. It isn't literal. "Debt" implies some sort of claim against an asset, which doesn't exist here. SBD holders have the right to trade their tokens or convert them according to the smart contract, that is all.
Those are the wrong answers. I am out. I see what course this ship has chosen... I wish you good luck on your adventures.