The problem is, Steem Dollars are not representing one dollar in third party exchanges either. Try to convert 1 SBD in Poloniex or Bittrex. You wont get 1 USD worth of Steem or other crypto.
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The problem is, Steem Dollars are not representing one dollar in third party exchanges either. Try to convert 1 SBD in Poloniex or Bittrex. You wont get 1 USD worth of Steem or other crypto.
This is a common misunderstanding. The guarantee that 1 SBD is 1 USD is something that only happens by executing the smart contract "conversion" option on the Steem network. Once the conversion is initiated, after 7 days you receive $1 worth of Steem that can be sold on any market for ~$1 worth of BTC or some other unit.
If you don't wish to wait the 7 days, you can of course trade your SBD immediately as you mentioned on an exchange but you will be subject to the market prices. Sometimes this is the better option, as I've seen SBD trading as high as $1.30 at one point.
Here is a more in-depth explanation of how all that works: https://steemit.com/steem/@modprobe/how-the-steem-dollar-peg-works
There is a fallacy in this case as well. Because, what we get is median of SBD value in terms of Steem for 7 days, which can be lower, higher or equal to 1 USD equivalent of Steem in other market. The point I am trying to make here is, though Steem Dollar is being promoted as stable value holding pegged to USD, in reality it is not working as expected. So far the spread is small. But, as Steem trading increases, this spread will increase more & more destroying the stable value property of SBD.