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RE: How SBD peg actually works OR How the @sbdpotato conversions won't affect SBD price

in #sbdpotato • 5 years ago

I would say that SBD is more misunderstood than useless.

A stable asset based in a trustless economic system (Wich is the case) I may actually be more beneficial to the blockchain than a high price STEEM.

A naturally volatile asset like STEEM won't work as a good mean of transaction, but if SBD Target price (between $0.95 and $1.05) is reached, it can have a way bigger positive impact on the blockchain (Wich could drive STEEM prices up).

The economic model is well thought, but when the 2017 crypto hype happened, creating a quick price spike followed by a continuous price dropping (and the debt ratio went over 10%), the protection system started to work to avoid pressuring the steem price down even more.

See, the system is working as intended, and with time and the gradual increase of STEEM supply, the economy would eventually return to it's normal state, and to help push sbd price up again to 1 USD, the witnesses would set an interest to be paid to sbd holders.

5 years ago in #sbdpotato by
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     5 years ago  

    I agree with all of that. But a system that takes years to work itself out isn't useful as a stable coin.

    Right now you can buy SBD on the open market, hold it for a (long) time, and be reasonably confident that you'll make 60% gains. Like I said though, that's speculation, not using it as a stablecoin.

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       5 years ago  

      Therefore, buying and holding it to await for the price to rise is actually pushing the price back to 1 USD, so, working as designed.

      At this moment, it is working as a speculative asset for basically 2 reasons:

      • the 2017 sudden price spikes followed by the price drop created an internal recessecion. So the system is prioritizing not increase the STEEM inflation even more over creating reasons for the market to push SBD to 1 USD.
      • there were never many projects to make a good use of SBD, and some of them missed an great opportunity to create value for SBD. For example, if the tokens on Steem Engine were paired with SBD instead of STEEM there would be a reason to buy sbd.
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