the actual math is behind the conversion process
It's $1 USD worth of STEEM per SBD.
If SBD is trading above $1, that doesn't impact the contracts it still does $1 USD worth. That's the contract. That's important because it enables the peg if SBD ever go below $1 USD value. The convert process ensures upward pressure and arbitrage will bring the value back up as people sell STEEM for SBD and convert.
Convert doesn't mean trade or sell at market rates.
Thanks. That’s what I was wondering about.
“Convert” usually implies getting the current market value of something to the average populace. If someone converts a coin on an exchange to another coin, they expect to basically get the current market value’s worth of the coins they are trading in the form of the other coins.
This smart contract detail is in the white paper? I’ll have to read it again. It’s important to lay it out very clearly so folks don’t get burned like @maxinpower who understandably assumed if SBD is trading at X price, that is the value he will get for it in Steem.
I understand about keeping the peg.