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RE: Proposal of how to stabilize SBD

in #steemit6 years ago

I have said before that one of the missing components of the SBD peg is the inability to short. That is, the inability of the internal platform to support borrowing SBD into existence.

But I didn't really think about the exact mechanism. I just imagined how bitshares pulls it off for smartcoins.

It would probably make sense to look at other (more successful) implementations.

I'd be interested in seeing this happen in some future hardfork, say, HF25. 😄

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This platform supports shorting. To short the SBD under this system you would buy a bunch of SBD and convert it to steem. imagine if the price of SBD was $1.02, meaning you can pull $1.02 of steem out of a CDP for 1 SBD. When the price of SBD renormalized at $1.00 you would be able to buy $1.02 worth of SBD with what previously was $1 of SBD. The leverage would have to come from off platform. If you don't count unleveraged shorts I don't know if the Maker platform supports shorts.