Lol.
Sbd is a promise to pay 1usd of steem at a future time.
It is a debt instrument.
For every steem dollar we owe one dollar's worth of steem to its holder.
In a rising market this is no problem
We pay less steem to equal that dollar.
In a falling market we have to pay more steem to equal that one dollar.
The system is designed to issue all rewards as sbd until the sbd to steem ratio exceedes 2%.
At 2% the system starts paying in steem instead of sbd to reduce the debt load and danger of default.
At 10% all rewards are paid in steem.
Over 10% and the system wont pay one dollar of steem, it defaults, but linearly in percentages.
Currently the debt ratio excedes 2% and we are getting paid partially in steem.
What does this mean for the average user?
Nothing really.
Just an oppurtunity to power up work earned steem.
The sky doesnt fall unless witnesses start to bail, or you bought at the top.
As long as you are here long term, lows are just buying opportunities, and steem paid as rewards means you dont have to bother trading internally to power up.
Lol.
Sbd is a promise to pay 1usd of steem at a future time.
It is a debt instrument.
For every steem dollar we owe one dollar's worth of steem to its holder.
In a rising market this is no problem
We pay less steem to equal that dollar.
In a falling market we have to pay more steem to equal that one dollar.
The system is designed to issue all rewards as sbd until the sbd to steem ratio exceedes 2%.
At 2% the system starts paying in steem instead of sbd to reduce the debt load and danger of default.
At 10% all rewards are paid in steem.
Over 10% and the system wont pay one dollar of steem, it defaults, but linearly in percentages.
Currently the debt ratio excedes 2% and we are getting paid partially in steem.
What does this mean for the average user?
Nothing really.
Just an oppurtunity to power up work earned steem.
The sky doesnt fall unless witnesses start to bail, or you bought at the top.
As long as you are here long term, lows are just buying opportunities, and steem paid as rewards means you dont have to bother trading internally to power up.
More or less I understand. Steem is ordinary shares, while SBDs are preferred shares.
https://steemit.com/steem/@timcliff/i-submitted-my-first-hardfork-pull-request-to-the-steem-blockchain-updates-to-the-sbd-print-rate
This explains it some.