I though there was some algorithm that was supposed to keep the value of SBD stable with USD. Is that broken?
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I though there was some algorithm that was supposed to keep the value of SBD stable with USD. Is that broken?
There was never a mechanism to keep it from rising above $1 at all, but Steem relied to sellers to sell their SBD when demand increases. However, now the demand is obviously a lot higher than people who are selling it. The problem is that it takes a long time to print more SBD since it's only based on posting rewards, so it is not easy to fill the demand.
The demand is so huge that SBD's aren't being printed enough to keep up with it.
It's a circle... the higher is the price of SBD the more steemians exchange STEEM with SBD, less SBD are on the market the higher is the price of SBD. I wrote about it here:
https://steemit.com/steem/@miti/sbd-reaches-the-moon-i-think-it-s-written-all-over-the-walls-that
If we could only choose 100% SBD on our posts, that would help. :P
hahaha, I have been thinking about it too lately.