The Steem Dollar will trend toward a dollar's worth of steem. Because Price and Quantity are always tied together, the value of a Steem Dollar falls below when the demand to sell is greater than the demand to buy. Likewise, it rises when the demand to buy is greater than the demand to sell.
Any discount you see is the premium people are paying for Liquidity because they are in a HURRY to sell. Arbitrage is performed by those who are more patient, they buy low ($0.80 and sell high $1.00 or more).
In other words, the market is sorting out supply and demand and will keep steem dollars near $1.00 over wide variations on STEEM prices.
Right now, on the internal market you can use SD to buy STEEM at about the current price. Therefore, it is holding very well.
Thanks for your detailed explanation. Let me see if I can get that into the post, and please correct me if I get anything wrong. I'm testing this IRL on the internal market to get a feel for things.
BTW, Thanks for clearing things up, and for making Steem / Steemit / Bitshares / Graphene.
I'd be lying if I said I wasn't having a total blast with your software :).
PS:
If posts are edited, do they lose out on SD/SP from upvotes? If so, why?
Editing posts is fine, no penalty.