I resteemed this to show I support the discussion and put a 1% flag on it to show that I'm not in favor of adding the SBD-->Steem conversion.
This seems like a highly speculative plan to capture a market we've shown no ability to capture at all at the risk of substantially dropping post rewards which I believe are responsible for increasing growth on the platform.
That said I'm in favor of this down the road if we can substantially grow our user base and thus our marketcap to the point where SBD can actually serve it's function as a stable asset.
Thank you @aggroed - while I understand the reasons for a peg. An enforcement would f* outside traders pretty hard. Which will hurt STEEM as result.
On the other hand, this would give an opportunity to inside traders. But still - I'm against enforcement of the peg.
Edit:
But on the other hand - @reggaemuffin has some good points.
A peg will result in a lot more usecases than two volatile currencies.
Damn. It's difficult.
I am currently in favor of letting SBD price die slowly as it will and we can have the peg ready when it is at $1 anyway. And while aggroed thinks the SBD price will stay up, he agrees that should it come down, adding a peg will be good. (I hope I have not laid words in his mouth here, but that is my take away for the moment)
I think we have our solution here. I came back in time to read, will be visiting other witnesses to check their take on this issue.
Thanks, very good post !!!!
Awesome Work!
Keep it up!!!
@cryptoinvestinfo
What is your favorite Hardware Wallet?
I appreciate that! We need both sides to have a discussion.
Hi @reggaemuffin, I am very confused since I got 2 messages stating "Your delegation request for 4 weeks 1000.081 SP was filled by @eeks.", but my SP did not rise by 2k SP. It stayed the same. Is there some kind of bug on MB where a delegator can take the offer but the SP actually does not get delegated? The above mentioned message only appears on the steemit.com site, not steemd.com. Thank you in advance for looking into this.
I won't respond on this here, please talk to me on discord or related posts. Keep this peg related.
Will do. Thank you.
Hi guys! I sent you 1$ 3 hours ago. Where is my resteem?
lol
Resteemed and upvoted your post. All is done manually, hence the delay at times.
On the topic of the peg, I think the floor should be pegged to $1 for now, but the ceiling should remain unpegged.
@reggaemuffin, thank you for bringing such an important issue for discussion close to our hearts and pockets. Wasn't really discussed during the latest witness forum. I concur with @aggroed. At this time, the jello analogy may be appropriate on trying to address the SBD/SP issues (although I am still a pupil here). I do see the need of ongoing assessment of such. Strongly agree re substantially growing and as important, retaining user base.
This is how I'd vote as well. No reverse conversion. Besides, did anyone address the main concern brought up in the white paper about the reason we don't have a reverse conversion in the first place? I haven't seen it, quoted below:
In my eyes, the market is not mature enough to deserve having a functional peg. It will work out eventually. And let's not forget that right now we are printing SBD at 5 times the rate that we were before. What's the rush anyway? Let it go back down naturally.
I want to remind everyone that SBD is intended as a debt instrument first and foremost, and right now the market is (stupidly) valuing this debt highly, but hey, supply and demand right? What will happen if we implement this reverse conversion and SBD price slams down below 1 USD, and people actually use the "conversion" function to flood the STEEM supply? The blockchain also makes assumptions about not printing too much SBD, and will stop printing SBD if the debt ratio is too large. What happens then?
The system right now is easy to understand. Let the peg go down by itself, because it will. And note that when STEEM price is higher, and the supply of SBD has become much larger, it makes it much more difficult for people to continue stupidly propping the price of SBD up in speculation.
Thank you for listening.
Yes, many witnesses and stakeholders have discussed it and hardly anyone finds it credible. Literally no one has provided as specific concrete example of how this would work without superhuman market timing skill on the part of the alleged abuser. The 3.5 day price averaging window addresses it. To quote the white paper:
This is what requires totally unrealistic and superhuman market timing skill to actually work. The conversion in each direction takes 3.5 days which means the person attempting this strategy would need to not only "see a massive run up", but also know that the price will stay high for most of the 3.5 days, and quickly fall, and then remain lower for the 3.5 days necessary to convert back. If the timing is off, or of the market instead moves in the opposite direction, the strategy will experience large losses. Overall the entire story is implausible. Furthermore, if the strategy described did work, the existing one-way conversion mechanism could be already be used to do the same thing at about half the rate (convert after a spike down, wait for recovery, then sell).
I remain open to the possibility that the may introduce some subtle vehicles for abuse, most likely limited in magnitude, which is why I support including a spread between the conversions (essentially equivalent to a fee charged by the blockchain) as a safety measure, at least initially. Doing so would make most if not all methods of abuse unprofitable (of course, a large enough spread would certainly make all methods unprofitable, at the cost of a sloppier peg, so some reasonable middle ground is appropriate). Given more experience we can narrow or remove the spread later, and to be clear it is not necessarily needed at all (some witnesses do not agree with the need).
Clearly the original design in the white paper does not work correctly, even by comparison to other blockchain-based stable coin designs (which have generally worked quite a bit better), or we would not be having this conversation with SBD sitting at $6 or higher for months. The white paper got this wrong (just as it got other things on Steem wrong which have since been changed). It is not a holy book.
Yes, I also could never understand the reasons against reverse conversion brough up in the white paper.
However I'm pro introducing some little fee on conversions, that would definetly remove any hipotetical possibility for 'abuse'.
See comments here (in original post and replies) about 'spread'. That is equivalent to a fee.
Yet anothet reason for implementing spread/fee is that the money collected could be returned back to the system in some useful way.
Like for example Steem mining could be reintroduced and 'fee-pool' could be used to pay miners.
Or maybe delegates outside of top-20 could be paid a little more.
Ah, that makes sense, thank you for your thorough explanation! I suppose I was imagining a pump and dump scenario for this timing, though having 3.5 days warning for monitoring the conversion requests should be ample time to react or make it difficult.
I should check out the design of other stable coin designs to see if one is mature enough. I would be worried though still. I would assume the way the others work is by having enough liquidity to use the market to push the price, not by changing the role of the stable coin token. The role it plays as a debt instrument is the part that makes me hesitant. Maybe the fee is enough to cover, but somehow I don't think that will cover larger long term concerns about price movement.
I very much agree with @aggroed here. The key point that I am taking away is that, unless the market cap for STEEM/SBD increases SIGNIFICANTLY, we have no assurances that, once that conversion is in place, that we will have an SBD that is tracking with the USD. You flood the market with easily converted SBD and you will crash it. I am all for having stable reward currency that can easily be accepted and converted to fiat or used as fiat it'self, but not at the risk of destroying the very system we love. Leave it as is until crypto volatility can be contained or at least minimized by adoption across the economic system. If SBD can be eventually contained to within 2% of the USD, then by all means, convert away. Til then, don't remove the most attractive feature about the platform at the moment. It is my firm belief that the high price of SBD on the open market is the main reason Steemit has attracted so many people.
Completely agree with @demonsthenes - for the moment it is bringing a lot of people to the platform in the context that they can earn a lot of money. Of course this is not necessarily a good thing, there has been an increase in spam accounts but amongst them there has been some amazing content created from new members. Lets at least see out the hype until we get mass adoption and in the meantime enjoy the ride!
I agree with aggroed, leave as is. Post payout decrease (SBD) would have a huge negative impact on the platform.
No, only on those that are here only for the money.
Which is everyone.
No, not everyone here is only for the money.
I agree with you, lets leave it as it is.
Lets free markets do their thing.
Implementing SBD-->Steem conversion to me is trying to artificially suppress natural market moves.
Let's not start acting like fed and try to micro manage everything.
Edit, have 5 witness votes left. Going to check and vote for you if I don't yet already.
Maybe would be a good idea we get a lit of witness who support what, so we can vote for change/no change ;-)
(Just checked, already voting for you, apparently did a good pick lol)
Yes, DOWN THE road. I don't think introducing something like this now is a good idea.
Amennnn @aggroed
Totally agree with you. The other argument benefits few at the cost of many. Seems like they are trying to control this little ecosystem. It's a free market let the prices fluctuate as they go. Businesses can easily display pricing information in real-time digitally. When the price of SBD fluctuates, the digital price will compensate and change.
Businesses care about no fees and speed.
Let the SBD prices fluctuate as the market sees fit. It's odd people in favor of control are also for decentralization. Hmmm.
It also says sbd is not meant to have an upper peg in the white paper, I believe.
This would also be a dramatic change for marketing. I am finally able to tell people I am making income here. So are others I know of. I finally see friends coming after 7 months here. If rewards drop substantially in 4 days - I do know what to think. The people who think this place is a scam will be sure now!
Yes and no. The white paper design is not intended to has a mechanism for an upper peg, but it is also assumed by the authors of the white paper that no such mechanism would be needed:
This is clearly not the case, therefore the assumptions made by the authors of the white paper are proven incorrect, not only here, but also on Golos (Steem clone/fork) which has experienced similar or worse de-pegging. The mechanism is deficient to meet the stated (and reasonable) goals and needs to be revised.
True, i second that
Like what you said you are doing good with steem. The propose change is to support long term existence of STEEM that will benefit all of us.
This is great about the community, we address issues that matter to all of us. Whatever the choice maybe, we are in good hand.
I'm in agreement with this as well
ReAdding? It was there before and now it is gone.
What was suggested was Steem --> SBD conversion.
Currently I have to say I am in agreement with @aggroed here and @clayop below. The discussion needs to be started now, and it is good that it is happening, but I don't think that now is the time to implement such drastic measures (yet). The growth that is happening at this time, because of this situation, can't be ignored. There are enough skeptics out there still who don't believe in steem, or call it a scam, and we really don't need to give them a reason to justify that. I think caution, discussion and a close eye on the issue are what we need at this moment.