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RE: How the Steem Dollar Peg Works

in #steem8 years ago

When a Steem Dollar debt is collected (cashed in for steem on the system) Is that debt repaid through the built in inflation? What i mean does it add to the inflation, or does it come out as a portion of the predetermined inlflation (that creates the curation and author rewards + steem power interest).

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It is paid through inflation, yes. The blockchain has some formulas for how much SD it creates to try to keep its debt (and thus, inflation) in check.