The broken peg undermines the utility of Steem Dollars as a stable currency. It doesn't necessarily follow that Steem as a whole is undermined by this.
If we were to remove SBD we would remove one of the top transacted cryptocurrencies period from our system, one which does twice as many transactions as Steem. That's clear empirical usage (and thus utility) being eliminated. The currently broken peg is a double edged sword, it has negative and positive consequences. There's no clear positive consequence of eliminating SBD which couldn't be gained with front end changes instead.
The three blockchain-level options available are fix it, remove it or leave it. For you it seems 'leave it' is the worst option, but I haven't seen that it's doing enough harm to justify that, it is certainly doing good in drawing in capital. For me 'remove it' is plainly the worst option, I see no real upside to that and enormous downside.
If the peg can't be made stronger, yes perhaps we should stop calling it a 'stable' token. It wouldn't be a free floating crypto though even in that case, it's just a weakly pegged cryptocurrency with a stronger minimum value. It is a unique value proposition in the market, although failing the social contract.
This, as a first step. Then stop calling it "pegged" and "backed" as well. This only hides the fact that it can fluctuate wildly above one dollar. You can use the word "supported" if you want.
Otherwise we are just tricking new users into thinking they are recieving a currency more or less redeemable for the USD.
But, under particular market conditions and given that we are trying to make the SBD head lower by exerting effort, then making it not head lower in order to stay up closer to the dollar, the unsucessful peg must harm STEEM as such, as it must be attributed a cost to keep doing this.
As soon as the SBD pumps, which is very easy to have happen, all attention is also put on SBD, making it go even further.
I doubt that many of the people that trade SBD on exchanges a lot will come here as a result of discovering the SBD. All it does is confuse non-Steemians as to which currency is the main token and confuse new Steemians as to all of the different assets here.
Either way, I think we agree that we need to stop tricking users into thinking that SBD is anywhere close to a stable currency, by not providing clear enough terms and/or other information.
Not necessarily true. It is likely the case at present that the cost is borne by speculators and not the Steem network.
That's why I added the qualifier of this being an "acute" issue so to speak under certain market conditions. Overall, I think it will lead to less investment in and use of the Steem currency than if the focus of the community and speculators had been solely on it. It's simply an economic outflow I see. That doesn't mean that any particular user will think Steem or Steem use is too low.
But again, let's at least clarify through the user interfaces or similarly that it isn't a stable currency. We shouldn't expose risk averse users to high volatility without them even knowing it.