The amount of Steem dollars produced is reduced when the debt ratio is above 10%.
As a witness, outside of sending in pull requests to change how the code works, we only have two tools available to us. The first is changing the Steem Dollar interest rate to encourage or discourage hodling Steem Dollars. The second is changing the price feed bias that influences how much Steem Dollars are produced for posts rewards and if Steem is also given out for rewards in place of a portion of the Steem Dollars.
Although not all witnesses agree, the general consensus on this is to wait it out and see how it plays out. It is too early to start heavily tampering with things.
The "Steem Conversion" option in the wallet has been removed, as it is not an efficient conversion due to the extreme conditions some users have used it without knowing and got less than optimal results due to confusion on how it works.
Just on Steemit.com though
This will likely be re-enabled if it flips the other way. That's good of them to reduce the confusion for this. Ill update to reflect this interesting point about disabling in steemit
Is the white paper outdated in that case? So payouts stop giving out SBD completely if the debt ratio is greater than 10%? The quote at the beginning seems to say something more about STEEM on conversion. Thank you for taking a look.
I believe it just changes how much SBD is given out and replaces some with STEEM, but I haven't read the source code to know 100%.
Okay, I think I've somewhat verified this by poking around source. Suffices to say it definitely does not work remotely close to what I was guessing :)