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RE: STEEM-focused Content and The FIRST PRINCIPLES of Steem

in #steem8 years ago (edited)

Just to be careful, I wouldn't say it is "literally impossible" for the Steem Dollar to skyrocket. My understanding based upon the whitepaper is that if SMD are trading less than $1 and the debt-to-ownership ratio is under 10%, then the interest rate can be raised to bring the value back to $1. If the debt-to-ownership ratio is over 10%, then the number of Steem produced per SMD can be increased, which should also bump up the price. However, if the value is trading over $1, interest rates can be dropped, but aside from using negative interest rates on SMD, "there is little the community can do" (whitepaper). Of course, you could always make an argument that it would be unlikely for this to happen, since it would be illogical to buy SMD while they are trading above that psychological level of $1. However, we can't rule out the possibility of people doing illogical things. :)

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Excellent point. Amended my comment. Thanks for the thoughtful correction. Look at us working together to create better information!