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RE: Steem Dollar Stability Enhancements

in #steem8 years ago

Although he took some flak for it, Dan originally called nubits a ponzi scheme, and he was right. The peg in nubits didnt break until bitcoin had a big rally (it was not that big from a historical perspective) and they didnt have enough bitcoin to cover the amount of nubits being redeemed at higher prices. I was frankly amazed that the peg broke after only about an 80% price rise over a few weeks. I thought they had something like 7 layers of protection in place.

Anyway, the unfortunate reality for a non-native pegged asset is that some type of safety net has to be in place at the expense of all users, either through dilution or a bail-in of some sort. Otherwise, the system can break under certain conditions.