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RE: SBD Trading At $1.2, Closer To The Peg, Poloniex Still Disabled And Some Ramblings

in #steemit7 years ago

The SBD is still issued so its supply on the Steemit website is still growing. It's the supply on Poloniex that is limited now. So if there's some speculative pressure on the SBD supply in Poloniex, by limiting the influx of more, the pressure will get down and SBD will reach the peg.

Now for the impact of a destabilized peg of the SBD.

1 SBD should always be $1 worth of Steem. So if Steem is $1, 1 SBD buys 1 Steem.

Now if 1 SBD trades at, lets' say, $2, because speculation, then the price of Steem will be impacted too. With 1 SBD you could buy $2 worth of Steem. But that's only on the Steemit market. On the free exchanges, you will buy $1 worth of Steem, which basically means Steem at half the price. In other words, if the peg is broken on the upwards, there is a downwards pressure on Steem.

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Ok, now I got it. Thanks for the time and the good explanation.