SBDs are just steem wrapped in a smart contract that converts each SBD to one US dollar worth of steem when ever the conversion function is invoked.
Steem Dollars are Steem presented in a different package. So they are not infinite. Furthermore, if at any point the issuing of steem dollars gets to more than 10% of the total supply the blockchain will automatically stop the "printing" of SBDs.
Although, technically the Steem's supply is not hard capped. The inflation rate is set to decline over time but never stop. So you can say that the creation of steem is "infinite" but the creation of steem dollars depends on the market price of steem. The higher the price of steem the higher the print rate of steem dollars with a cap of 10% of the total supply in USD terms.
Interesting. I was curious as to how that worked.
So the amount of SBD created is correlated to the price of Steem then and supply of Steem then? Essentially SBD created will never exceed 10% of Steem market cap is what you're saying? What would happen to rewards if that scenario ever did occur?
And I thought the declining inflation basically does give Steem a hard cap no? I've seen a few places that list a max supply for Steem. Now I'm wondering where they get that number? Which is roughly 250 mil.
That has happened before. The rewards are paid out in Steem instead of SBD.
^ this is a good comment
Thank you.