This is a great explanation. I will have to read over it again a few times I think but this is the best explanation I have yet seen of how the steem dollar actually works.
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This is a great explanation. I will have to read over it again a few times I think but this is the best explanation I have yet seen of how the steem dollar actually works.
Thanks, glad it’s helpful :) It took a while for me too to internalize all this. And I still have a lot to learn.
I hadn't thought about the linked value like you described. I understand that the system adjusts how many SBD are created if the ratio of Steem to SBD goes over 10%. I am not sure how this factors into the equation.
AFAIK it's not the "system" but the price feed bias set up by witnesses. Initially it was 5%.
If it ever gets to 100% then we will get STEEM by an SBD proxy. Much like people who will trade Bitcoin futures will never hold Bitcoin, but a contract about Bitcoin.