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I think the idea is that while the value of steem will fluctuate, steem dollars are tied to the dollar. At least, that's what I got from this article

So SD/Steem market seems ripe for arbitrage opportunities.

Yes. And it's exactly such arbitrage that over time should cause the value of Steem Dollars to approximate 1 US dollar.

That is a good link. Thanks! This article also helped as it provided a little background and context to the nuts and bolts.

I upvoted you.