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:
If people could freely convert in both directions then traders could take advantage of the blockchains
conversion rates by trading large volumes without changing the price. Traders who see a massive run up
in price would convert to SBD at the high price (when it is most risky) and then convert back after the
correction. The Steem protocol protects the community from this kind of abuse by only allowing people
to convert from SBD to STEEM and not the other way around.
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.