Witness Discussion – SBD price and reverse peg

in #witness-category7 years ago (edited)

There is currently a discussion about the SBD between the witnesses. This post aims to get the community informed about both sides of the argument and to start a brouder discussion about it, as it affects all of us.

Some Background information

Steem post payout is done 50% in STEEM POWER (SP) and 50% in SBD. You can choose to get 100% SP but in the current market condition that is not recommended. That is because the SBD is designed to always be worth roughly $1 in STEEM. And at the moment one SBD is worth about $6. So when you write a post that displays $100 then you get:
• $50 worth of STEEM, say at $5 per STEEM means 10 STEEM
• 50 SBD worth $300
so your $100 became $350. That is a nice thing for you.

The more one STEEM is worth, the more SBD gets printed. So the general idea is that with more SBD being created, the SBD price slowly moves back to $1. And slowly means over the time of a few months. This is a good thing for posters, but it is a bad thing for services using SBD as what it was initially intended to be: A currency backed by STEEM that is worth one USD.

A shop accepting SBD can price their items in SBD instead of USD and has the security of knowing that the price will not halve over the few days that shipping takes. A credit card company could let you store SBD on the card and convert them 1:1 to USD without any risk. And you could use SBD as a save deposit of value that does not fluctuate like crypto does. All without converting to fiat and all the nightmare associated with that.

So this discussion is about what we as the steem community want. A volatile SBD with high posting rewards, or a stable, pegged SBD with normal posting rewards. There are pros and cons to this and I will try to cater both sides of the argument. A personally am pro peg, if you want a con side, check out @aggroed.

What do you want to implement?

There is a one way conversion on the SBD. You can always convert one SBD into $1 worth of STEEM. So if STEEM is worth $5 then one SBD can be converted into 0.2 STEEM (over 3.5 days), regardless if SBD is worth $0.01 or $100.

The proposal would be to add a second conversion, so $1 worth of STEEM can be converted into one SBD. So if STEEM is at $5, you can convert one STEEM into 5 SBD, regardless of SBD price.

We would add a small spread to it, so thet you can convert to $0.99 and $1.01, to prevent abuse through conversion. So through this measure, SBD will stay around $1 with up to 2% of difference.

Implementing this will take time. Sheduling a fork will take two weeks. And before that, we have to implement it and test it. So my personal guess is at least one month till we can do it. Maybe till then SBD is down from $6 already, maybe it is at $15 then.

If SBD is at a high price when we 'flip the switch' then that could lead to the price crashing and to a panic. But if the change is announced beforehand, maybe that will not happen.

Here are all the arguments I could find pro and con this change. Please tell me if I missed your argument and I add it:

Pro:

  • A safe store of value as a cryptocurrency
  • A low risk crypto payment option for businesses, if SBD tracks USD, this
    • Can allow market applications like ebay or etsy for steem without the platform risking the hit of price volatility
    • Can allow a paypal for steem that normal businesses can adapt without those big fees middlemans take (as there is less risk and no fees)
    • Can allow for a low risk credit card charged with SBD without having to sell them or convert them to USD
  • Post payouts are now exactly as much as displayed
  • Demand for STEEM could rise from users wanting to buy STEEM and convert to SBD when the SBD price is over $1
  • People in countries with broken currencies could adopt SBD as a stable currency

Con:

  • Post payouts could decrease 4 days after implementation (to 1/4 of what they are currently if SBD stays at $6)
  • Currently author rewards are partially outsourced to SBD investors. The Steem community pays a higher share with low SBD.
  • Platform growth could slow as post payouts decrease
  • Demand for Steem could decrease as ability to print high SBD is removed
  • User retention could drop as post rewards fall
  • Steem doesn't have a market cap large enough to support as many SBD as there are USD and thus the stability implied is not guaranteed

Outlook

This post is intended to get feedback from the community and no changes are planned at this time.

Please discuss this in the comments, write posts on your opinion and check out the other witnesses and the posts they write:

  • (I will add posts here if they are posted)

If you feel strong about this topic, adapting your witness votes can be a way to make your voice heard.

Since @aggroed added the con points, I will donate the liquid part of this post to MSP. This post is still flavored pro peg and I suggest you to read multiple posts on this matter.

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I spent much of today coming up with my thoughts on this topic and recording it as a video as well. The video ended up being more than 21 minutes long (!) but here it is for those that are interested:

Should SBD Be a Pegged Asset? If So, When Should We Peg It?

Good information, thanks to the 2 for their time, dedication and for sharing ...

regards @lukestokes and @reggaemuffin

There's absolutely no point having two volatile tokens on one blockchain, with one of them representing a debt on the other. This is a two-token system with an explicit purpose for each of them. If we're not going to even attempt to peg SBDs as intended, then we should just get rid of them altogether.

The argument that "It will reduce post rewards!" is a piss-poor one. There's more to growth and stabilization of a blockchain and its tokens than "Let's reward all the minnows!"

We have tools available for pegging. We need to use them. There's no sense in asking for more parameters/functions when the current ones aren't even being used by most witnesses. Try actually using the current tools. If that doesn't work, we can try adding new ones. If those don't work, then we'll have our answers about whether or not a peg is realistic.

If we don't want to be bothered with any of that, then get rid of SBDs. That is not my preference. I think there is great value/utility in having a stable currency/asset for this blockchain. But if nobody cares about that, then we don't need to waste time and effort trying to peg it and we don't need the added risk of a debt instrument.

We have tools available for pegging

There is no real tool for downward pegging, other than waiting it out, which is what was done the last time SBD went higher, and did eventually work. That will likely work this too, but it makes SBD useless (essentially "disabled"; right now nearly all of it is on exchanges being traded by speculators) as a stable currency much of the time.

The only conceivable method that exists (outside of reward-based initiative such as my @burnpost) would be a positive bias on the price feed, and that is not a good one because it amounts to increasing inflation above the defined paramaters, with not even any future remedy to absord the newly created coins. It is neither widely supported by stakeholders nor recommended by the white paper (which admits that in the original, flawed design, little if anything can be done if SBD is valued about $1).

The proposed improvement of adding a method of converting STEEM to SBD does not increase inflation, and can be reversed later if it becomes necessary due to changing market conditions by converting SBD to STEEM.

There is no real tool for downward pegging, other than waiting it out...

The only conceivable method that exists (outside of reward-based initiative such as my @burnpost) would be a positive bias on the price feed, and that is not a good one because it amounts to increasing inflation above the defined paramaters, with not even any future remedy to absord the newly created coins.

I don't necessarily agree with this. The tool for downward pressure when SBDs move off the peg is to reduce or eliminate the incentives to buy/hold (interest rates) and to increase the supply to meet the higher demand (bias). The increase in supply obviously takes time to reach the markets, but it would still provide downward pressure (assuming the parameters are actually changed by enough witnesses to reflect market conditions, which currently doesn't happen).

I think that consensus changes for increased supply is actually a good mechanism and the preferable one if we're talking about token inflation. Even if the new supply ends up creating more than the market demands (which would be the obvious goal for short- to mid-term price spikes anyway, in order to bring prices back down to the desired peg), parameters can then be adjusted to incentivize holding or converting SBDs to STEEM if SBD prices happen to over-correct.

But this is why witnesses should be well-versed in the blockchain protocols and price/token parameters and at least have a basic understanding of currencies/markets/economics. This can't happen if people don't care or don't understand and if they're not paying attention to the markets (or if they're completely absent witnesses altogether). We can have any tool imaginable at our disposal but it won't mean much if people don't know how to or just don't care enough to use them. If the problem is simply that witnesses don't care about pegging or don't know how it works, then none of this even matters and this should be a consideration for our witness votes.

The proposed improvement of adding a method of converting STEEM to SBD does not increase inflation...

Why doesn't it increase? Whether we use bias or use a conversion function, more SBDs will be created. The former at least allows consensus protocols to manage the increase of supply, but both serve the same purpose, which is to meet market demand for SBDs.

I'm not necessarily opposed to a new conversion function. I'd just like to see the current tools actually tried before we condemn them for being useless. In any case, we probably still have quite a bit of time to figure this out and there's no reason why we can't test both or either method - and whatever we try won't be a quick fix. Unless we're assuming that SBD speculators are always up-to-date on the internal mechanics/sentiments/changes of or with Steem, which I believe is rarely ever the case, there's no reason to expect that any immediate changes to protocols or parameters will yield immediate results. I'm OK with a slow return to the peg via slow increase in supply to meet demand, if it can be done.

...and can be reversed later if it becomes necessary...

This is something I'd like to see more of when making protocol changes that yield bad results. But I think I'm dreaming a bit there.

reduce or eliminate the incentives to buy/hold (interest rates)

The interest rate has been 0% for a long time.

Why doesn't it increase? Whether we use bias or use a conversion function, more SBDs will be created

Because it is a conversion. STEEM is converted into SBD which means STEEM is destroyed and SBD is created, so the net inflation is zero. A conversion from STEEM to SBD and back to STEEM would result in the same amount of STEEM that we started with (assuming no price change, or alternately, averaged across the range of positive and negative price changes). That is not the case for a bias, which permanently prints and distributes more rewards (because the blockchain in that case believes, incorrectly, that its market cap is higher and can therefore 'afford' to distribute more according to the predetermined schedule, currently about 9%/year).

Overall it is not a well-targeted method for dealing with the SBD value due to this distorting of the assumed market cap and the resulting permanent net increase in rewards/inflation. It also screws over people who perform conversions from SBD to STEEM by shorting them on the STEEM received (since it is assumed to have a higher price). Of course, no one should rationally be doing these conversions now, since it converts a $6 SBD into 1 USD worth of STEEM, but some users have anyway. This has become less of an issue now that SBD conversion was removed from the GUI.

The undesirable side-effects are the reason most witnesses and stakeholders don't support it.

What about allowing 100 pct Sbd payouts? This would allow the natural stabilizers to work twice as fast and is a minor change.
I see an amazing opportunity to dominate store of value coins if we increase the cap of Sbd. A stable coin at 6x the cap would be a great addition the the landscape. “ the stable value coin” of crypto should be backed by something decentralized like ether or steem.

But we can only win this battle if we straighten out Sbd quickly!

Imagine the ability to print the dominant stable value coin (through steem power). This would surpass blogging influence as the reason to own steem power.

I agree. If the purpose of SBD is to act as a stable peg, then it should function as such. This notion of "let it ride" is short-sighted. There have been plenty of arguments made down this thread about the advantages of an SBD peg, including the ones @reggaemuffin mentioned in this post. However, if we're not going to have it function as a peg, why have it at all? SBDs are simply a second token from the same blockchain. As designed, they serve a specific function. If that function isn't necessary or even desirable, it should be done away with. I'd rather not do that, as there are very good reasons for having a stable token alongside a more volatile one, but if that's not of concern, then let's abolish them.

Getting rid of SBDs is a horrible idea. Obviously we are in a bullish market right now, but we need it for the flip side if SBD starts to become under 1 USD, and there are many tools at our disposal to encourage its usage (not the least which is the fact that you can redeem them for 1 USD worth of steem at steem market prices)

I don't understand what the rush is. We are still a premature market, as long as there is promise that the peg can be held when everything matures, I don't really see why we can't simply wait. At 4$ USD, we are printing SBD at 4x the rate than we were before.

Are people saying that the reason we aren't getting full blown adoption is that the SBD is not stable? I feel that this is backwards-- SBD can't be stable until STEEM has proven to be successful. And the way this is designed, that's how it works: STEEM's price / marketcap being high will allow the peg to work much more easily.


Edit:
Actually, I take this back: we don't absolutely need it. But it would be very nice to have a token that behaves more predictably once the STEEM ecosystem has proven itself.

Agreed. Steem has to mature more before things like making sure it is pegged to a dollar even become warranted. The unintended consequences of a switch now would be bad for steem and steemit as a whole. There is a psychological factor behind all this as well.

The creation fee of Smart Media Tokens will be correlated with the nominal value of SBDs, interchangeable with an equivalent dollar amount of steem per the SMT White Paper:

"Issuing a smt_create_operation requires payment of smt_creation_fee. The amount required is set by the smt_creation_fee field of dynamic_global_properties_object. This field may contain a value in STEEM or SBD. If specified in SBD, an equivalent amount of STEEM will be accepted, at the current price feed. Initially, smt_creation_fee will be set to 1 SBD, and no means will be provided to update it."

The originally envisioned characterization of SBDs being pegged to the US dollar when the steem blockchain was first developed two years ago has been unquestionably disproved by free market supply and demand forces.

Perhaps deep pocketed buyers are accumulating SBDs to raise their nominal value as a means of increasing the cost of entry into the SMT creation market whenever SMTs are ultimately launched.

SBDs are akin to scarcity tokens on the steem blockchain. The free market should determine their value.

Perhaps deep pocketed buyers are accumulating SBDs to raise their nominal value as a means of increasing the cost of entry into the SMT creation market whenever SMTs are ultimately launched

That won't work because "an equivalent amount of STEEM will be accepted at the current price feed" means that 1 USD worth of STEEM can be used regardless of the value of SBD. That is a little unclear in how it is written, I agree.

It is indeed unclear. As I read it, the USD value of 1 SBD will determine the SMT creation fee. If 1 SBD is $10 USD for example, and steem is $5 USD, then an equivalent amount of steem would be two. Therefore, as the nominal value of one SBD rises due to demand, then the associated number of steem to match that value would change accordingly.

I just don't understand how any blockchain can assure that the value of a token derived from it can be pegged to some external asset. Therein lies the main issue with SBDs. Unless Steemit Inc. has $1 USD in the bank for every SBD created by the blockchain to assure that the value of SBDs cannot fall below the $1 USD amount, then the claim of a peg is unavailing.

SBDs are described as an experimental asset in the SMT white paper and I think it's time to admit that the free market is telling us all that the experiment of trying to fix their value to $1 USD is quashed and cannot be sustained in the face of random supply and demand forces.

Other stable coin designs have been shown to work better, so simply inferring something from 'the free market' response to this one flawed design is taking a misleadingly narrow view. That said, you are not alone in believing that stable coins are impossible and won't work.

Thank you for the exchange of ideas.

It is the exchange of ideas that I am ultimately driven by. Thanks for the discussion as well.

And I appreciate both of you and everyone in this thread! It helps me understand whats going on more clearly!
Thank you!

And I appreciate both of you and everyone in this thread! It helps me understand whats going on more clearly!
Thank you!

Short of them delisting SBD and being personal guarantee of 1 SBD = $1 USD it will always have volatile on the open market. Even junk coins in the cryptocurrency market sky rock and boom all the time.

Even with break points/line in the sand of when certain market condition is met witness deploy mechanism to counter. That will only have some success at best some times which has always been clear in forex. Even long withstanding policy bends and breaks over passage of time. Even more so in smaller market caps.

As well if the Dollar collapses does that mean SBD will collapse at the same time??

That is always the issue with fixed exchange rates.

As it stands everything is too connected with BTC every time it takes a dump majority of crypto markets bleed in value.

There was some earlier discussion on this where it was observed that stakeholders via their elected witnesses can choose to switch the peg to something else (gold, silver, basket of commodities, etc.) if that did happen.

As smooth noted - the peg can be to any asset, really. It's just a matter of choosing which one and adjusting the protocols/parameters to reflect that. Some have asked for a peg to BTC or gold. But I think the most stable would be the widely-accepted currencies like USD. Even their fluctuations in price/value is far less volatile than nearly all other assets/commodities, and certainly cryptocurrencies.

This is not quite true. In the regime where STEEM is successful, STEEM's supply will simply send SBD prices down, and we will need the other tool to prop up SBD (interest rates), or simply just the conversion mechanism itself that burns SBD's for the equivalent of STEEM. Yes, it may still be slightly volatile, but it will be much easier to control.

Agreed on the point about smaller market caps. That's just makes it easy for manipulation.

If you want to have stability on this blockchain, making a drastic change on how it works is the last thing you want. The suggested change here is drastic and tells the investors who have invested in our blockchain that it's not to be trusted. If the tools that we have are not working, then the intended purpose of the instrument was not though out well enough. But since the market has found a use for it anyway, it doesn't make sense to me to go against the market.

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?

Ledger Wallet protects your bitcoins

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?

Resteemed and upvoted your post. All is done manually, hence the delay at times.

@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:

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.

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?

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:

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

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:

We fully expect there to be a narrow trading range between $0.99 and $1.01 for SMD under most market conditions.

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

I'm not in favor of adding the SBD-->Steem conversion.

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.

In the grand scheme a peg is likely more beneficial as to the opportunities it will create for currency use.

Of course in the short-term there will be a little pain and impact users directly. Unfortunately not many people are willing to sacrifice for the greater good. In fact I have not seen that since my grandfather's generation.

SBD was designed to be a $1 peg, I will always look at it that way.

I agree with keeping the peg. It's what it is designed for, if not used for that then why have it? I have been designing and coding a point of sale system for brick and mortar merchants that would greatly benefit from a stable SBD (which I think steem would benefit from brick and mortar merchants using it) but I've put the project on hold until this is worked out..

I have not fully looked into all the aspects of this topic, I hope to find some more posts on the matter, but I will say 2 things here now before I head over to @aggroed's post:

  1. I am looking at this under long term prospects in terms of economic viability rather than short term growth and immediate rewards of the community.
    From that POV it absolutely makes sense to implement a "down-peg", possibly as described by yourself above.

  2. I know this sounds a bit #circlejerk -ish but I must applaud your open stance, community orientation and call to action on the matter. Kudos!

P.S.: After looking into aggroed's post, I think I am now even more pro down-peg. Thanks for getting me thinking!

Never change a running system. LEAVE IT AS IT IS. 12k new accounts per day is a sign that everything is just fine. No need for stupid experiments that could lead to enormous regret afterwards.

If I could pay 5k USD to show this post to every steemian 5 times a day, I WOULD DO IT. Seriously...

As an active Korean community support, I personally experience high SBD price is very effective and helpful to authors more attention and engage to the community.

The implication of high (e.g. $6) SBD price is like, Steem pays $1 for authors and the investors(or speculators) pay the rest of $5. So it can be considered as outsourced support on behalf of authors.

Despite the high SBD price, its usage is growing in Korean community. I believe this is due to the fact that the adoption of currency is not only dependent to its stability, but also highly dependent to how many people are engaged in the ecosystem and how much they trust the economy.

Also, I am highly against the suggested conversion model, since it cause very high vulnerability to Steem economy. The nature of SBD is a derivative, being backed by at least x20 STEEM in order to deal with STEEM price fluctuation. Theoretically, if STEEM price goes down by 95%, SBD becomes broken.

But the suggested model requires only $1 value of STEEM to create 1 SBD. This will decrease the STEEM reserve ratio that backs SBD. In bullish market, this may be not a big deal. But in bearish market, it can be a huge weakness of our economic system.

In my opinion, SBD is mainly for contexts creators. Specifically, it is aimed to secure author's income in terms of USD value. Its high price obviously benefits the authors now, while does not harm any others except poor speculators. I also saw many authors who like Steem sell their SBD then buy STEEM, in that way high SBD price still contribute STEEM price. I really like this golden goose, and want to keep alive as long as possible.

Its high price obviously benefits the authors now, while does not harm any others except poor speculators.

Agreed, the Korean speculation money is literally subsidizing the entire steemit community at this moment, hopefully there are not too many angry bag-holders when they discover you can just print more at the push of a button. I hope not too many new users here believe the SBD price is a new norm, as they will be in for a shock when they realize what SBD are really supposed to trade near. Currency pegs never really work as intended, and take too much to keep going.

The nature of SBD is a derivative, being backed by at least x20 STEEM in order to deal with STEEM price fluctuation. Theoretically, if STEEM price goes down by 95%, SBD becomes broken.

This is not how SBD works since the 10% of market cap hard limit was implemented. In fact STEEM only needs to decline 50% from the 5% level for SBD to start to take a haircut, but the haircut is gradual, and the broader Steem/STEEM/SP economy is never threatened. No matter what happens to the price or ratio, SBD never represents a claim on more than 10% of the total value of STEEM/SP (a relatively small amount which is within what we see in one-day price fluctations on a regular basis).

This is a fundamentally different design with much lower (if any) risks to Steem/STEEM than a hard collateral-based system. In effect SBD is not defined unconditionally as $1, but as the lesser of: a) $1; or b) STEEM market cap divided by 10 divided by SBD supply. Essentially all of the price risk is shifted to SBD. That may or may not be a problem for SBD but it is something we can safely try, and if things don't work out then Steem/STEEM/SP is not harmed at all (and SBD is only harmed incrementally by a fractional haircut).

Agree. Same as Chinese community.

Well said friend, you represent my interests, and thusly you have earned a vote from me.

The way I see it, the SBD pump was a bonus. We hoped it would be transient, but it wasn't. SBD was meant to be pegged at $1, but the current situation has demonstrated its failure to achieve that purpose. Also, it failed back in May 2017 when it reached $22. Since many witnesses aren't in favor of increasing their bias (to increase SBD issuance and hopefully reduce its market price), I think it's worth a try to implement a reverse STEEM->SBD conversion and see what happens. Cause that's what the current attitude is, 'let it ride and see what happens' with the high SBD price, and so far nothing has happened 😔

I don't think SBD going back to $1 will hinder Steemit's growth at all. It was already growing when SBD was pegged, right? All the altcoins went up in 2018, STEEM too, and it's not because SBD was high, it's because STEEM was following the market's move. Additionally, when SBD pumped to $10-$15, it took a while for STEEM to increase too, so their market values aren't that much linked as some may think. Besides, even if user retention drops, this is a good thing, we get rid of the gold diggers and retain the quality people that love and believe in the platform.

There will always be pros and cons for any major decision like this, we won't know the result until we try.

Insanity Is Doing the Same Thing Over and Over Again and Expecting Different Results

Increasing the bias seems like a safer and more reasonable tool for trying to fix the peg than adding a reverse convert function. I need to come up with numbers on what kind of volume it would take to peg sbd, then again, we bring sbd to $1 that could cause a dump and bring us to a lower value than $1 for sbd.

ok, can you explain this?

"The proposal would be to add a second conversion, so $1 worth of STEEM can be converted into one SBD. So if STEEM is at $5, you can convert one STEEM into 5 SBD, regardless of SBD price.

We would add a small spread to it, so thet you can convert to $0.99 and $1.01, to prevent abuse through conversion. So through this measure, SBD will stay around $1 with up to 2% of difference."

I really don't understand what you mean by adding a spread, and how this reverse conversion would even help. Basically folk would be inflating sbd, and deflating steem. do we know how much liquid steem it would take to do this?

it'd be great to have a bigger article explaining exactly how this would work.

right now, we have mostly pros and cons, but the proposal itself could use some serious fleshing out, imo.

of course, as others have noted, a massive "correction" on sbd in 3.5 days is an unsettling thought.

We have one conversion and tge other one will work the same. It can only devalue sbd if it is above one dollar. And it burns steem, so should increase the steem price.

Also it takes weeks to get to a point of a hard fork. By then the market knows what will happen and should have already adapted.

Code wise the proposal clear. How I said it is exactly how it works. If you tell me your questions, I can answer them but the proposal is fleshed out in how it will work.

What will happen and when to do the fork, that are the big questions.

Edit: the spreadfee is just a safeguard should there be issues with users converting back and forth. The lower we have that, the tighter the spread.

the biggest part I don't understand is: a small spread that would prevent abuse of conversion.

the 3.5 day correction I referred to is the amount of time a conversion would take.

Basically you can buy sbd for 1.01 in steem and sell for 0.99. That way each back and forth conversion costs you 2 cent. So if there is a chance of you being able to abuse the conversion (which we don't think there is) you have to make 2% profit to break even.

And yes, 3.5 days for the conversion.

  1. 'A spread' means that it would take slightly more than $1 worth of STEEM to convert into 1 SBD and it would take slightly more than 1 SBD to convert into $1 worth of STEEM. The purpose is to guard against certainly (hypothetical) forms of abuse (or just useless but wasteful spam) converting back and forth without any build-in cost. There are still some inherent costs so it isn't clear this is needed.
  2. The way the mechanism works is you gather up some amount of STEEM (in general, by buying it), and then request that the blockchain convert that into 1 SBD for each dollar worth of STEEM, using a median price over the next 3.5 days (this 3.5 day averaging period guards against obvious forms of manipulation where someone briefly props up the price to get more SBD).
  3. On the matter of massive correction, one idea that has been proposed in this thread is to phase it in over a period of time. If that were done, the peg cap would start high (say $10) and gradually drop until it reached $1. That might avoid a crash, but on the other hand, the market might still crash quickly if it sees the improved peg coming. It is hard to say. My personal preference would be to wait until SBD has naturally returned closer to $1 and then implement these improvements to avoid future de-pegging, rather than directly forcing the market down now. However, that does have costs in potentially missed opportunities. We know that stable coins are a rapidly growing product area in the cryptocurrency marketplace. We already have most of what it needed to offer a very competitive product and potentially grow Steem (and the value of STEEM/SP) a lot, but that absolutely won't happen without these improvements.

I believe that, in such a rapidly changing market, taking plenty of time to consider and learn how the markets behave is the best bet. I'm grateful to know that most of the witnesses are cautious and slow in making major decisions like this.

Thank you for the more detailed explanation.

"SBD was meant to be pegged at $1"

You are misinformed. The ogirinal white paper specifically states that the peg is only for the down side and that the upside was not an issue to be fixed it it happened.

I think this is all being triggered by the way the porn deal fell apart. It needs to be nipped in the bud and focus on helping the flood of new bloggers and other content creators succeed instead.

It's the Alexa ranking dropping into the top 500 and none of the big guys even have seemed to have even noticed.

Besides, even if user retention drops, this is a good thing, we get rid of the gold diggers and retain the quality people that love and believe in the platform.

This is really the core argument in my thinking! Peg SBD down, watch STEEM take a hit, take a good breather and solidify community values in this economy!

Hi @aggroed and @reggaemuffin thanks for bringing this topic up!
Honestly, what do we have currently? in terms of userbase? I read it somewhere here, let it be 60 k users and some more or less working apps and services.
This SBD pump and some other actions have brought us alot users in the last weeks, the german discord we just brought up a few weeks ago is bristling with activity.
This broadening in the userbase is what we need, even if i sincerely fear that the code that is currently in use is by far not able to handle a mass adoption, even not a very tiny one ...

So yes we need that pegging, do we need it now ? Definetly not, there are so many bigger problems to take care of!
Is there a list of witnesses divided by sides ? Would make my decision easy.

Thanks alot!
Kind regards
Jan

It isn't only the increase in SBD that has brought users, it is also the price of STEEM and the general crypto market. STEEM is up about 30x in the past year (and despite that has underperformed many of its crypto competitors). SBD is only up 6x (was 14x). The main value and attention driver here is the gain in STEEM, not SBD, though one can't deny that increased reward value is a nice bonus.

I don't think you are right there. The main drive for new users are the high rewards they get from posting and commenting atm. And those result from the price of both currencies. Taking away 75% from the current reward level will definitely lead to a massive drop of interst in activity.

Especially for big content creators who depend on the money.

Users being dependent on their Steem "income" shouldn't be the basis for making protocol/economic changes. Network and currency stability should always be the priority. If we're claiming to have a pegged token and the pegged token is never pegged, despite the resources being wasted on it, then we and the tokens lose credibility.

I get that people like money, but making sure content creators continue to make hundreds or thousands of dollars per week/month for publishing mostly unappealing or unpopular blog posts on a relatively obscure website isn't really a concern for me, personally. Stabilizing the economics and having a useful token for commerce represents vastly larger upside potential for both growth and value.

I think you are right with

having a useful token for commerce represents vastly larger upside potential for both growth and value.

However having a large community also is important for that.

What speaks against waiting 2-3 months till SBD is closer to 1 and the implementing it?

What speaks against waiting 2-3 months till SBD is closer to 1 and the implementing it?

Nothing at all. That's certainly an option. I just happen to think that testing the robustness of protocols/parameters in extreme market conditions can provide useful feedback for decision-making.

Let's say that a STEEM --> SBD conversion is implemented and the markets quickly correct to a relatively stable peg near $1.00 after trading at 500%+ for a couple of months. I'd say that the function worked very well and could be further tested/tweaked for larger-scale adoption/use.

It's the extreme market conditions that create the pegging issues. So to me, there doesn't seem to be much sense in waiting for things to return to low volume and less interest to then test the robustness of protocols and parameters. If we can test when the market is highly active and volatile and find success, then we can mostly be assured that the new implementations could work fairly well against similar future scenarios.

Steem is already difficult enough to explain and understand with SBD being worth about 1 USD.

With SBD being worth any random number based on speculator behaviors, confusion is added to the system. That doesn't help for mass adoption.

SBD's should be worth around 1 USD. But a smooth transition would always be preferred over a crash. Humans are emotional beings and herd behaviour is very much a real thing.

I'd say an announcement with a 60-day period before downward peg action is executed should suffice.

Becoming wealthier> Being confused.

So "being confused" is reason enough for you to make everyone on a 50 000-user platform SEVEN TIMES poorer?

Gotcha...

No one gets poorer when 1 SBD will equal 1 USD. With a headsup in advance, people will convert SBD to Steem. In all likelihood the value of 1 Steem will rise as a consequence, which makes the users of the Steem platform wealthier.

The speculators that hold SBD's on exchanges will become poorer, but I don't care about them to be honest. I care more about the Steem eco-system and its users.

I agree with aggroed. This will have a very negative impact on the platform. And I dont see we have the market in ahnds for pegging around 1$ for stable prices. We profity alot more as platform and community with current prices. If this would be implemented i get my steem out of here and i think alot people will follow.

Normaly i don't reply to these things as i believe the witnesses know what they are doing. However in this case i like to state that you mean well (probably) but this aint the time for it.

If you do this people that are making posts and earning something with it will leave and go back to there addsense wordpress blog. And leave steemit. And we will return to 2 years back in case of numbers and activity.

You would in essence break what has been build.

https://steemit.com/steemit/@zoef/should-we-peg-sbd-no

I know it's not going to be popular right now, but I've been consistently asking for reverse conversions in my updates since I started as a witness.

I think the benefits of a stable asset outweigh the short term pain - I just wish we had done this before the sbd pump got so out of control.

Maybe if you want a stable asset, hop off SBD and make your own. Or do you want to make everyone poorer just to reach your sick, self-centered goal? You sound like a politician selling out the entire country for some personal goal.

If you want to feed the discussion with personal attacks, you're on the wrong platform. This is Steem, not Twitter or Facebook.

Thank you.

"The benefits of a stable asset"? Make your own! Stop screwing an entire community and removing the very incentives that make people want to come here in the first place! Perhaps you are a communist?

I think those benefits come when we are larger. I think we should do this in the long run. But we need more active users to make it worthwhile.

We use high sbd to fuel growth in our infancy and when Steem is large enough (10B-100B marketcap) and assuming it's not being used as a high value store of wealth further down the road we can implement this. I'm not suggesting we wait 10 years. I think it'll be within 1-2.

I totally agree! lets bring those people to the platform now, that is what we need. More people= more development = more applications = more growth. I hope we dont tumble back down again, damn.

I feel the biggest hurdle to overcome for people to get onboard with Steem is not the heights of the payouts. The payouts are so incredibly high, they are likely not making this platform more attractive, but rather give it a 'scammy' and 'fishy' appearance.


Here's an example, this is a post with 15K views, you probably have seen it. When people outside of Steem realize $811 is in fact about $3000 USD, do you really think they'll perceive Steem as a long-term stable balanced community where high quality content is valued?

Does high SBD fuel growth?

If so, does it attract the crowd we'd like to welcome on this platform?

Could volatility in the SBD value and the uncertainty and speculative element of that scare away the people we'd really like to see here?

I don't understand. Why would we ever need reverse conversions, especially when Steem is large enough? STEEM's price being large would make the peg work by itself.

I agree that foolish speculators should be used to feather our nests.
If they can't read the white paper and know that we only promise 1usd of steem per sbd then maybe they shouldn't be speculators.

I think the peg comes down in time by it's self.
Until then the early authors get a little bonus.

And,

If stinc is for it, I am against it, they have shown their true colors enough for me.

If stinc is for it, I am against it...

That's actually a really good metric to use for decision-making. I approve!

Good morning @aggroed. I see your point on the benefits to you and your respective coutries, But, many 3rd world countries would not accept the currency as they are already struggling to maintain their own currency.The infrastructure will not be available to implement crypto payments. The effect of this will be that lets say in this instance that 1/3 of the worlds Steemians will benefit from it.There are loads of bloggers from impoverished countries or areas bettering their lives through Steemit.From there on one of two things will happen. Either Steemit will lose quite a number of active bloggers because they have no more real benefit of using Steemit to earn some income as they do currently.The other option is that they will stay on but posting loads of content to try and make up for the lost income, meaning that 2/3 of the posts will be pushed down so quick and great content will be missed or not see.It will be like another Facebook, except everyone will be in a posting frenzy to accumulate Steem. The essence and the thing i love most about steemit is meeting people from around the world.I would hate to see people leave Steemit because of this. I believe in the growth of SBD because it has the great backing of steemit and a GREAT community behind it. Thank you

what are reverse conversions?

A conversion from Steem to SBD instead of from SBD to Steem.

Thank you, it is much better stated that way. I never liked the term 'reverse' conversions, as there isn't anything inherently forward or reverse about either direction. Expressing it as such is very confusing to people not already involved in the discussion.

Right now is the wrong time to implement something like this. It will destroy a lot of value and part of our market cap. It will destroy trust in our blockchain and it will portray us as untrustworthy and unstable - a history of making huge changes to the rules is not a favorable record for an asset that tries to promote itself on the merits of stability.

Implementing a reverse-peg can be done only when the market value is close to the value that is going to be artificially forced on it. Otherwise you will create a huge market swing. That wouldn't be good for our reputation or valuation.

So it might be a good idea at the right time, but it's a very bad idea right now.

@reggaemuffin Hi, I also say that making SBD equal to the value of a USD will have such a big impact..I have spoken to people that buy their groceries weekly from steemit earnings.I believe that if earnings on posts drop so will the content quality because of low motivation.Some people work really hard and Steemians appreciate it by showing their appreciation by larger upvotes.I have found such hope in Steemit and i am promoting it far and wide because of the change it can make in lives.I am almost able to afford a camera after one of my posts got a great upvote, That is such good motivation to keep on trying to be better and post more interesting material.The current reward system is the motivation behind the healthy competition.

Make your own USD-pegged currency and leave Steemit alone. Thanks!

SBD’s as a currency would be fine (at any USD price) for online shopping provided that the price was relatively stable.

Microsoft and Steam both recently stopped accepting Bitcoin, not because the price was too high, but because it was too volatile.

Retailers probably wouldn’t care if SBD was at $1 or $100, as long as it was relatively stable.

Since 2013, I have yet to see any cryptocurrency be stable enough to use as you describe beyond pegged assets like bitUSD. USDT has concerns and isn't provably backed in the same way bitUSD and SBD can be. SBD could end up serving a big part of this market if we agree to make this change. To not recognize that opportunity may not be the best way to value the long-term interests of this ecosystem. If millions and millions of dollars wants to flow into a stable currency, then the demand for STEEM would go up as soon as a truly pegged SBD goes far enough about $1. I think that could be a really good thing.

@lukestokes good point here! If there is a world demand for a stable currency and sbd could be prepared to accomplish that, then we have another opportunity and another huge reason to make the steem ecosystem skyrocket!

Did you have the chance to review the mention I gave you regarding building relationships on Chapter 8 I posted today?

Regards, @gold84

Funny money backed by funny money, or funny money backed by no money. An SBD peg would work about as well as Tether does, in that it would implode in a short while. BitUSD is also vulnerable.

Vulnerable how? You stated some opinions. Can you also share what they are based on? Financial value itself is determined in the moment of transaction. For all the value backing SBD or bitUSD to fall so low as to have some catastrophic black swan event bringing them to zero... we’ll that would be difficult to imagine. BitUSD has been doing quite well so far.

I would tend to agree they are theoretically vulnerable. If everyone wants to get out of BitUSD or even BTS itself at the same time (essentially a run on the bank), the resulting release of massive amounts of BTS collateral and accompanying selling pressure could cascade the price of the whole thing down to essentially zero.

Similar things could happen to STEEM (or BTC or any other coin), but really we are simply talking about a loss of confidence or market crash where no one or nearly no one wants to speculate on a recovery and everyone just wants to get their money out. People participate in these assets because the believe the utility and/or future upside are enough to compensate for the risks, but if that perception changes, then what is left to hold up the value?

FWIW, I think Steem is slightly better positioned that BTS to not suffer from catastrophic loss of value because it at least has some non-speculative utility. People might pay real money for censorship-resistant blogging, to be part of the community, etc. even in the absence of high speculative demand for the token, while Bitshares is simply speculation and tokens. If demand for the latter goes away then there really is nothing left. Likewise a pegged token backed by STEEM is probably slightly less risky for this same reason (underlying backing has more non-speculative value, even if not necessarily a lot at this point).

All of these things are difficult to measure though, so this is just an opinion.

Well, considering as of this comment BitConnect is still selling for $13.35 USD, anything is possible (or, maybe more accurately, anything is possible in this cryptocurrency bull-run).

Yeah, that's a good point about STEEM having some utility value that some may actually pay money directly to obtain does give it a bit more security. At the same time, I see the value of BitShares as largely untapped. What BUILDTEAM is doing, as an example, is quite interesting. I can imagine many other companies doing a similar token model with staking and such. Exchanges that work well have tremendous utility value and BitShares has that also as a functional exchange. This is why systems like OpenLedger, Rudex, and CryptoBridge exist: people want some of that decentralized exchange value and to charge fees for the assets they support. BitShares (the token) makes all that possible, so there's great value there as well.

I agree on all counts. My point on STEEM vs BTS was not that BTS doesn't have value, but that a bigger portion of STEEM's value might be robust against a collapse in interest for speculative tokens. Of course, there is no way to know for sure.

Too high, too volatile, too slow.

"Let's make everyone six times poorer! This is a great idea! Because... reasons... Because... Stability??? Because muh USD fiat currency!"

You guys all have excellent arguments!

I have a suggestion: Why don't you all leave Steemit and buy REAL USD fiat currency if you love it so damn much? Thanks

One of your pros was "post payouts are now exactly as displayed"

Is there a reason the post payouts number can't be pegged so that the SBD portion of the payout is reflected at the market value? It doesn't seem like it would be too difficult.

Yeah, nice! Payouts are now 7 times less! A a HUGE PRO, right! =D

It would not be dificult but at the time of that decision SBD was meant to be always $1 so the blockchain will handle it that way and effectively push the price in that direction. It just happens slowly.

OK, so maybe you want to ban antibiotics because the experiment was not "meant" to create said medicine? Maybe ban all life-saving, productive experiments for the reason that they did not turn into what they were "meant" to turn into?

You did not get my post. The question was what the reason was. And the reason was because at that time the peg held. Now it does not.

You could say you want to remove the peg completely. That seems what you are after. But don't put random words in my mouth please.

I only addressed the word "meant to" since a lot of people in this post have been using it as an "argument". Sorry you felt I put words in your mouth, I'll be sure to write more carefully in the future.

All in all, I think this discussion is absolutely insane. Only a pure insane person would ever try to make something X7 less profitable. Of course, these people are all from the West, i.e. they have never had to do anything in life to be comfortable, they all invested early in crypto and, therefore, can afford to make an entire platform almost X10 poorer. And their arguments for it seemingly are "because it was not meant to cost this much", which to me is brain-imploding... If they love fiat currency so much, how about they take a couple of their millions and start their own USD-pegged crypto project? Do you agree?

SBD was designed to track the USD and it currently does to some degree. But with the latest pump pushing more and more money into it, getting down to $1 is taking longer.

I have already made my case for the peg. It is like paying $7 for a $1 giftcard and calling the person insane who wants the price to go down to $1 again. Sure you can do that.

I think holding SBD currently is really risky. If you sell them you get the profit. And maybe next month it is at $1 again anyway. Please red up on how SBD works and how inflation rises with price and what that means. To support a $7 SBD we would have to remove all existing peg.

Why the actual fuck would you want it to go back to $1 USD?

"This is a good thing for posters, but it is a bad thing for services using SBD".... I think that is the problem. What does Steem intend to be??? A blockchain for content creators? Or services?

If it's for content creators, cool, let's do it... If it's for stores, shops, service providers, etc... cool, let's do it... but let's not confuse ourselves and think we can have all of that perfectly hashed out on one blockchain

You will end up screwing one or the other no matter which way you slice it

We have a handful of stores and 50k active bloggers. If we grow the userbase the stores will come and purpose of this place will shift then. If we do it now we'll hurt the bloggers in favor of store owners who aren't here now. I doubt the major problem is a fixed price of sbd and a larger problem of there aren't enough users in this marketplace to merit popping up a store... yet.

There are no arguments for destroying an entire market. Anyone in favour of destroying X7 of something's value is someone so comfortable in their little bubble, completely disconnected from the real world and that can afford throwing away 700% of their money. Pure insanity...

aggroed, please you must fight these economic and wealth destroyers! I will support you.

I couldn't have said this better myself, and I think this should be highlighting the real reason we shouldn't be doing anything funny like reverse conversions.

I keep wanting to say, STEEM doesn't deserve to have SBD be stable yet, but that doesn't sound right haha.

I also doubt that the SBD price is deterring stores from flocking to adopting SBD. And even if they wanted to, stores should just use market prices for accepting currency anyway. Just like how it would be for any other crypto...

Yep, true that

Quite frankly I agree with @aggroed here. Now is not the time, I personally think you risk the fall of steemit. Increase the userbase and keep the returns high so that said users are able to spend their rewards at the shops that pop up over time. What happens to an economy if nothing is pushed back into it and everything is taken out? Its value dwindles and considered junk, just look at my country, South Africa.

To elaborate on this, say steemit turns into a place for stores to run off of the blockchain due to a decrease in rewards and a dwindling userbase. I wouldn't go through the effort of converting my money to sbd to buy something when I can buy the same thing for roughly the same price in dollars using something as convenient as PayPal.

If anyone has a more educated opinion here, do share, but I don't see an upside to doing this.

The difference is, there's not really any other blockchain out there that can compete with Steem on the content creation side... there are shit tons that will compete on the commerce side.

Find a gap in the market, and fill it. Fundamental 101 economics here.

This is so odd to me. There’s no confusion here as far as stores vs users/content.... a store comes after. If they peg this currency and no new users can profit, this will never grow enough to even be a place for stores. IRL you don’t build a store in the dessert when nothing’s there. You build a community and the stores will come.

If commerce is to happen here the people will create it. If this peg happens myself and many many users will leave.

My piece of advice? Look how the Brazilian Real came into play. The market was chaotic, with prices in constant upheaval. a loaf of bread could see a 20,000% swing in either direction. When the Real came into play, it reset everything. It was standardized, simple to understand, and people rolled with it. Eventually, the Real became the standard currency in Brazil.

While I don't see SBD ever replacing Steem, the concept is still sound. With an SBD token that is always the same value, it makes trade in Cryptocurrency that much easier. And people can still exchange for Steem if they so desire, allowing people to play the cryptocurrency market if they want. But everyone else can use it like money.

Frankly, I'm all for pegging the SBD to the dollar. Barring some massive deflation in the value of Steem, it's fairly difficult for this to be a problem.

First off thanks for bringing out this discussion for all, @reggaemuffin.
It makes the community work much better by having input from all participants.

I personally believe SBD when created to always be pegged to the USD and want it to continue doing so. Just because there is huge demand and limited supply should not allow speculators to re-adjust the value of it. The 50/50 will benefit the whales more because they usually have the most earned. In my opinion whales are behind this over extend price of SBD. Minnows like me are trying to capitalize on this but the reality is in the long run it is hurting the community more than helping. The fractions we get from the higher SBD to Steem is nothing compare to how the whales are spending the SBD. Sorry I do not know what needs to be done to get us to the 1 SBD to 1 USD. Just wanted to vent. Thanks.

sorry man i don,t think so it is also helping us to earn some handsome money it is helping minnows to buy some steem for steem Doller

While you're buying steem with steem dollars they're moving big piles of SBDs to their exchange of choice and cashing the fuck out. But yeah, if they intentionally try to stop the flow of money this site would grind to a halt.

If you look at: https://coinmarketcap.com/currencies/steem-dollars/#markets

It's simple to see that the majority of trading volume for sbd comes from Korea. Yes, whales, but Steem whales, idk.

They've done that with every coin by leading the price action, and the suspect nature of whether all those traders are actually Korean (who had the largest bitcoin holdings again?) came into play, hence all the raids and taxes.

so what if turn $1 again and how it will be fine for minnowes who are earning only 2 SBD in a week. they will stop working on steemit.

Yes, that would tend to be a side-effect of the price falling, much as interest in the website grew as the price rose. As long as the primary draw of steemit is the income-generating portion of it this will tend to hold true. Vested shareholders have shown little to no desire to give up the earnings they have in order to make the site usable for smaller holders, which will limit growth and prevent it from being widely adopted. Just my 0.001 cents.

@inquiringtimes thanks for the link. mostly SBD are being trade in korea . but how it effects the steemit

Youre too honest amd correct

I agree with @aggroed and others who want to keep things as is. I think higher SBD is great for growth for this platform and long-term that is a good thing. Maybe at some point in the future, changes could be made if the price action for SBD gets too out of control. I don't think that's an issue now though.

Higher SBD is good for people with a smaller support base such as myself. So I'm a little biased lol.

I am pro SBD-->Steem conversion.

I'm interested in the overall growth of this platform and have no issues if the short-term disruption causes people here just for the money to leave.

I'd really like the Steem blockchain to be a platform for ideas, discussion and services, and not necessarily for making a quick buck. I want vendors on a SteemBay or SteemPayPal thing to be confident in their prices, and for purchasers to want to make the purchase and not feel like they need to guess the exact right time to make their purchase. SBD was always intended to open this platform up for commerce and I don't feel like that is possible just at the moment.

For the record I want this too. I'd argue the limiting reagent is number of people in the ecosystem more than a fixed price asset.

That's fair... I understand that.
As an aside, I've voted for you for witness since I got here, and I trust that you're doing your best for the platform even if we're different sides of the argument on this one. Can I ask who a witness on the Pro side is? I'll vote for them too.

I've got an ebook that I'd eventually like to try and sell on this platform... it normally retails for $30AUD and I'd love to set a price in SBD and forget about it, so I like the idea of the conversion to try and bring SBD back down to $1 USD.

I'm on the pro side of fixing the peg, but I think I already have your vote :)

That is 100% correct. You could have worked that out just by seeing the word 'Aussie' in my username.... but apart from that you're generous and smart.

You can be here for the money and still have good genuine content to share. If this happens and I can’t make anything because of the small user base, I’m not going to work at regularly creating content anymore.

I don't think it would drastically reduce the user base significantly... people might need to work at it a little bit harder, but it should drive all the growth we've seen in SBD into Steem... so in the long run you should be much better off because commerce users will adopt the platform as well.

Why would I be better off because commerce would use it? I feel like only a very specific type of user could benefit from that. I already spend a lot of time and effort on my content anyway.

Any significant use of SBD (even if not by you) would drive capital into STEEM and drive up the STEEM price significantly, which is another way of ending up with bigger rewards to drive growth. The potential to address that market and gain enormously in STEEM market cap (and again, that means larger reward pool size) dwarfs the current (temporary and unsustainable) benefits from higher valued SBD.

I like this idea. The two way conversation allows the market to correct the price down to $1 and the price is pegged from underneath to prevent it from crashing.

If the STEEM price goes down to $1, then that is simply a buying opportunity. We should not care about preserving the market price but building instruments that behave as intended. SBD has little use now, with this change, perhaps it can return to being an ecosystem currency.

Thank you for your stance! This is the argument @smooth and I are having, so voting us for witness can support that to happen.

I definitely agree with $1 STEEM being a buying opportunity :)

There are two cases. Keep the thing the way it was designed or change it as it not hard and fast rule that whatever you have designed in the past is correct or not changeable.
If SBD was designed to be always worth of $1 and steem to fluctuate then they should be kept that way. Reason is you have one currency which can be used by others/investors to manipulate while SBD will be kept the standard unit for payment dealing. This has long term effects.In the long run we will benefit from it when all the stores offline and online has started using SBD for the payment.


When it comes about the author and post rewards scanerio, think it as when SBD was $1 worth. Then we all survived and we were happy with that. Even that was the difficult time bcause you had very small community and not a very big market cap. So you might be earning less money now if this happens but it will give rise to the useage of steem blockchain resulting in the marketing of steemit and attracting new users. So then you would be able to earn more by having more followers and taking your content to bigger audience.

Personally I agree with Pros AND the Cons. I believe it is best to stay a little longer in the Cons-camp before joining the Pros-camp.

Longer term SBD will go down to 1USD one way or another.
For now I say wait a little longer. When it reaches a more stable price around 1USD (and have a bigger marketcap, including higher Steem price) the Pros should be considered again and/or implemented!

Just my two Steem-cents worth

@reggaemuffin great respect and thanks for the discussion...
However, I disagree with your position and your 'Pros'. Stores and services that want to use SBD need to "VALUE THE SBD", see below.

@aggroed - great respect and thanks for your role here...
Generally, I agree with @aggroed position, I think there more 'Cons' than listed. The higher payouts have stoked more posts and more activity and more new users.

@reggaemuffin - The fact is that SBD is traded and susceptible to volatility, it is a cryptocurrency. If SBD is forcefully (programmatically) pegged to USD, then it WILL experience : "fiat and all the nightmare associated with that". It's a contradiction to want it to be tied to USD and believe it would store value better than USD or avoid problems of fiat.

"VALUE THE SBD"

@reggaemuffin I disagree that a 'non-pegged' SBD is a "bad thing for services using SBD".
Stores or services (that would 'want' prices in SBD that are tied to USD) should consider the SILVER and GOLD markets / stores / websites. The USD price of silver and gold is volatile. Several websites sell one ounce of silver, for example, but the USD price is up or down throughout the day. This is a known fact among buyers of silver. We buy silver and the price in USD is up or down by the end of the day. When we receive the actual 1 ounce of silver, we "VALUE THE SILVER", we do not consider the current USD price of it.

My suggestion for a store or service that wants to price products in SBD is that they must "VALUE THE SBD". It does not matter the USD price of it.

Edit: I am suggesting to look at silver selling websites as an example. They are selling a product where the prices rise and fall based on the relative value between the product and the currency.

Overall

Overall, I do not think a change is needed.
We NEED to "VALUE THE SBD" !! !! !!

SBD can be pegged to silver or gold or whaever instead of USD if we want. But the mechanism will still have the same flaws if conversion in the other direction is not added. For example, Golos (a Steem clone/fork) has their version of SBD pegged to gold, but it failed in exactly the same manner (too high and no good way to bring it down).

Hey Thanks for the reply @smooth. I agree with you on this. I was not suggesting to peg SBD to silver or gold for the same reasons that you mention. My point was that silver sites modify price based on the dynamic price of silver.
My point is that SBD based stores should modify price based on the dynamic price of SBD. If so, then there is no need to peg to USD, or anything. Simply allow SBD to stand as its own cryptocurrency.

The thing is, no one would accept gold for a pizza, if chances are, the gold lost value on your way to the bank. In case of crypto currency, what if it drops 25% and you made a loss? You will have to raise your prices 25%. See steem gift cards, they have ultra high fees as they convert to btc and from there to usd. If they accept sbd with a strong peg, they can convert once every few days with less fees, or maybe at some point need no conversion.

Hey @reggaemuffin, much respect!.... My point is to "VALUE THE SBD", don't think in terms of converting to BTC or USD. That is a short term perspective., based on "what is it worth now". Think in long term perspective. Think in terms of wanting to hold STEEM AND SBD, Not trying to convert to BTC or USD.
Concerning your pizza/crypto example... if the pizza has a set desired USD price, and the crypto currency drops 25%, then yes, you have to raise prices 25%, and the prices have to be dynamically determined based on the current crypto currency price. This is just math and expected. This is because you value the USD price before your value of the crypto.
However, consider an asset that is based strictly on a cryptocurrency. Let's say a service sells monthly service for 10 SBD, without concern for the 'so-called' USD price of SBD. This service price of 10 SBD does not change.
This is why I keep saying "VALUE THE SBD!!"

I like the idea, but I don't like the idea of a flash crash. Can't there be a rollout? $1 steem buys $0.2 SBD today, $0.25 a few days later?

I personally feel SBD is damaging the price of steem.

  1. 100% power up should not be punished. It should be the easiest option. But it becomes especially problematic when combined with 2.
  2. Do I trade my sbd and power up? What if SBD goes back up again? How much much money would I lose out on? Right now, SP should only be recommended for short term speculators looking to nab some quick curation rewards before powering down. Everyone long term needs liquidity as growth is randomly divided between two coins.
  3. You have to have steem to convert it. If you can immediately market buy back for profit, that should put upward preasure on steem any time sbd creeps. Which it still will.
  4. Lying to new users about payouts , increasing the skill curve for new users, rewarding new users who look for ways to game the system over those who don't, just overall rubbing the guts of cryptoworld on new users,when steem has the benefit of being the one crypto attracting people outside the ol' boys club is dumb. Holy shit it would be easier for me to get people started if sbd didnt require its own lecture.

can't there be a rollout?

That is certainly possible at the cost of some code complexity.

EDIT: Your other points are quite good. I didn't notice them at first, but thank you for writing those. I would encourage others to consider them as well.

Do I trade my sbd and power up? What if SBD goes back up again? How much much money would I lose out on?

This is actually a common decision for most investors. Where do you invest and when? What are the projected gains or potential losses? There's no way to protect investors/speculators from their own investment/speculative decisions. Asset prices can rise or fall based on a multitude of factors. That's just part of the game.

Holy shit it would be easier for me to get people started if sbd didnt require its own lecture.

There are certainly some aspects of the Steem blockchain that are presented in a much more complex
and in an essentially unnecessary way. Some of it has to do with the blockchain design, but a lot of it has to do with a general ignorance of currencies/assets/economics in the first place. Even if we were explaining an investment portfolio with assets and cash accounts, most people would be confused and find it difficult to grasp at first. And that's essentially what Steem has to offer: an investment token and a cash/commerce token. One offers investment and the related "investor privileges" and the other offers cash and liquidity. The only problem we have is the pegging issue with the latter and the learning curve for buying/selling/converting the token, which is something that's foreign for nearly all non-crypto enthusiasts anyway. We've all had to learn how these things work, so we shouldn't forget that people who are completely new to crypto are undergoing the same learning process. It isn't something that's exclusive to SBDs.

Basically, if the peg "worked," SBDs are just Dollar equivalents or placeholders. There's not much more explanation needed for it. Other than that, you're explaining the difference between the Dollar equivalent (SBD) and the investment token (STEEM) - a token which requires much more detail, since it can be bought/sold, powered up/down, extends blockchain privileges, and would potentially have much more price volatility.

I think at the current moment it's best to keep it the way it is. The reason for that, is because I think that steemit is becoming more popular way faster, because of the bigger rewards. If SBD came down to 1$ most people would be earning very little and that could discourage spreading the word around. And if it would bring down steem to 1$ as well, it would be a big hit in terms of growth.

That's roughly my argument.

Roughly my thoughts aswell

Thank you for your stance! This is the argument @aggroed has, so if you vote him for witness, you can support that to happen.

Where would I be able to do that?

I'll definitely do that!

I was around when SBD was SUB $1.00 it didn't stop me from posting. Those who are making big BUCKS from SBD dont want the party to end. - Those are the big earners.

And if it would bring down steem to 1$ as well, it would be a big hit in terms of growth

There is no basis for expecting that, I don't even know where that number came from. Prices may always fluctuate for a variety of reasons but the most direct short term effect on STEEM from STEEM to SBD conversion is positive for STEEM because people would (under the right conditions) buy STEEM to convert in to SBD.

... because people would (under the right conditions) buy STEEM to convert in to SBD.

And thereby also burn the STEEM, reducing supply and likely contributing to even greater upward pressure on prices.

Exactly!

For those of us who don't make a lot on most of our posts, the bump in SBD when trading on the market is very valuable. As of right now (but perhaps not in the future) the services side of things mean nothing to me.

I think the reason more and more people are interested in steemit is because of its higher value. I started here when SBD was barely a $1, even then it already cost a lot to us here in Asia due to conversion rate and what more now. So I think, new comers who still doesn't understand the real concept between SBD and Steem would appreciate a higher SBD value. Especially us, who would like to earn from this platform without big amount of money to invest with.

I kninda don't like the idea because these changes could destabilise the market which is already too volatile. SBD was intended to be pegged to 1$ but right now it has pumped a lot. On the other side, if you look at it, it tends to get lower.

I think that with time, people will not feel the need of SBD at all and we can completely give up on it and keep only Steem.

Thank you for your stance! SBD not being a good peg at the moment is why we discuss about enforcing it more. I can see your concerns and they are mine as well.

Yep, this is the only things that scares me, I can live on with fewer rewards, but a more volatile market would be pretty bad. If people analyze the market and can predict accurate that the price of Steem won't be affected, then I am okay with the change, especially keeping in mind that this is how SBD is supposed to work.

If you read the white paper - the peg was only on the downside. The upside was not assumed to be a problem in need of fixing.

I'm glad someone is pointing this out. The whitepaper is essentially saying that in this regime the market is willing to pay a lot more for this debt token, and there's not much you can do when there are too many crazy people.

And I don't think too many people realize that that's what this is (1 SBD is a gift card worth 1 USD worth of STEEM when redeeming through the STEEM blockchain). And we have a natural mechanism where the more successful STEEM is (by marketcap) the more SBD gets printed. Just be patient y'all....

The white paper also says this:

We fully expect there to be a narrow trading range between $0.99 and $1.01 for SMD under most market conditions

The white paper got this wrong. They did not think that an upper peg would be needed (other than perhaps very occasionally). They were also wrong that there isn't much you can do when there are too many crazy people, as shown by other pegged coins on the market that deal with this situation a lot better because they have mechanisms to increase supply. They still have pumps, but the pumps are short-lived and do not disrupt the token value for months as they do here.

I want the big payout. The whole reason crypto is becoming popular is because the dollar becomes less valuable by the second as treasury printing presses spit out new bills. It seems counter productive to change it to mirror an outdated way of doing things.

I think that it is better for everyone to get 50% SBD and 50% Steem Power.
I am for stable pegged SBD :)

Thank you for your stance! This is the argument @smooth and I are having, so voting us for witness can support that to happen.

I just voted for you as a witness. Keep up the good work :)

With higher value of Steem, the amount of sbd is on the rise as it is. Seemingly the only reason for a sbd pump is for investors to push up the price and make money off of other investors with the dump. In the meantime, this brings a lot of money into our market, people are buying more steem as a result, as well as having the opportunity to pay for real life necessities. Dramatic steps to inflate supply of sbd would be detrimental to user base at large.

Some have even suggested eliminating sbd all together, which is equally as foolish, imo. This would not funnel all of that money into Steem, investors would simply find another token with low enough volume to pump.

It's not a bug, it's a feature which is currently bringing a lot of value into our economy at no additional expenses to the blockchain.

Thanks for writing this, it's a subject many of us have been thinking deeply about. There is no simple answer, but immediate result is that the community benefits.

Currently anyone who wants to operate a business with crypto must accept the risk and potential reward of volitility and deal with current market rates. With a feelers token such as sbd/Steem it's already a lot simpler for those businesses.

Over time sbd will inflate in volume quite naturally, investors will become more educated, and markets will stablize.

Another concern I have heard about the reverse conversions is that it would allow internal speculators too much freedom to manipulate the market. I agree, sbd is pegged to steem. Steem is not pegged to sbd.

Thanks again.

Maybe a hybrid that changes with SP is an idea 💡

I think the minnows would almost all want the SBD to be as high as it can be since that means we can way more easily earn and powerup accordingly. ☺
I would not have been able to weekly increasy by +/- 10 % if this was not the case. It would therefore also lower my motivation for trying to spend my limited free time on Steemit to grow. The thing is true as you said about the stability argument. SBD is way more usable if it's indeed worth 1 USD. I think I want to see a hybrid between the two. maybe people below a certain SP should have more excess to option A and the higher your SP gets, the user would recieve a more balanced payout. (meaning more to the 1 SBD = 1 USD)

I can see this work, since being a big SP account, probably means you have a high Rep and follower count, so in term you could probably make a ton more than the minnows can. They have to struggle between increasing numbers of similar small size accounts.

Therefore in order to incubate the evolution of steem users, there is a greater pay out needed, this sets the good account apart from the lesser accounts, in a more quicker fashion when compared to a system where they would make all less. This is just a simple argument that so many evolutionists believe is true. Having a greater difference in the first moments, make A TON of difference. Having little differences (read lower payouts) would result in a system where good from bad accounts become indistinguishable.

I hope this did somehow contribute a thing or two ✌️
Thanks for wanting to both teach and involve us.

Greetings from Amsterdam,


t.

  • I like to keep things as they are. I don't see SBD as a means of fiat supstitute for transactions.If ecommerce stores want a supstitute , may be it is steem ( with little speculation still) not SBD ( with much higher speculation).
  • long story short people are floking to steemit now for the high rewards, and sure the platform will be negatively influenced if small cap people don't make quiet good earnings.
  • Earning is the key to susceed any platform .... and I think we are in the earning season.
    earning season.jpg

Well I m not a big whale to add my suggestion but I think when we are trading with crypto currency or token the only excitement is uncertainity of either side.
If a token is backed with $ then no one will hold it due to no potential. I can support my idea by looking at tether price and trading volume no one is holding it expect for pip hunters.

I would prefer to leave SBD well enough alone for now. Though, like others, I can see my opinion changing on that as the platform develops. Right now there is no use for a pegged SBD, maybe that will change in some distant future.

To be honest, if the witnesses want to tinker, I'd suggest dealing with the real problems on this platform. The ridiculous state of affairs that sees and few dozen people holding 95%+ of steem and the rewards mechanism that allows for so much abuse while almost guaranteeing endless flag wars. Those two things will hamper if not destroy this platform in the long run.

Steem is the only show in town at the moment and as such is has a Blackberry type position in the market. If those things are not fixed by the time the iPhone of the social blockchain space comes along and it will. Well it doesn't take a rocket scientist to work out what happens next...

My thinking is this - if SBD had the purpose of being pegged and isn’t doing its job, what is it doing bar adding in a stream of volatile currency that may or may not be beneficial for earning Steem depending on when you decide to trade it in. I absolutely would adore a return to December last year when I could rake it in, the SP benefits were great! To me. What of the poor people who got their first rewards in when SBD as it declined this month and didn’t get as good a reward? I mean that’s if they’ve navigated the minefield of Convert To Steem or Blocktrades or even not knowing about the entire SBD/Steem/SP mechanic.

I think pegged stability is the best thing here. Every user knows exactly what is going on with SBD at any given point. Plus you have the ability to attempt to build partnerships where you can start purchasing with a nice stable currency. You’re not going to get that now.

Keep it simple. Right now SBD is just some stuff that I immediately convert. Just give me the direct market value as it stands, reduce some of the ways to market. It just feels like there are a bunch of ideas thrown at a user where it needs something nice, simple and managed.

Really good post and in my opinion an extremely important topic for the platform. Kudos to you for showing some leadership on the issue.

I think you will get shouted at because crashing the SBD back to $1 is going to be very unpopular. It is why I have suggested the BIAS setting is a way to apply market pressure without crashing the price (and without requiring a hard-fork).

Another option is to re-peg the SBD at a less drastic rate. For instance, if the SBD is at $6 you could re-peg it at say 1 SBD = $5 USD worth of STEEM while implementing the reverse conversion of STEEM back to SBD. This will make the crash less severe and protect some of the SBD holders and authors who would attack the proposal.

This does open a whole new set of challenges regarding the post reward calculations but you could leave the SBD rewards as they are and authors would be happy. At the end of the day they are the main ones driving value on the platform. In many ways it underpins both the SBD holders AND the authors while also giving us the stable peg we want and need for commerce. It's a compromise solution.

The idea of phasing in the reverse conversion (say starting at $5 and then gradually steeping down to $1) is a reasonable one but adds more complexity to the code that would only ever be used once. That is likely not a good tradeoff. But maybe it is worthwhile if it is the only way to help bring consensus to the idea. Thanks for the suggestion.

My personal preference FWIW is to simply wait until SBD comes down closer to $1, which will probably happen in due course, and then implement the improved pegging feature. This comes at a cost in that stable coins are a rapidly growing market and if we don't fix ours soon we may miss out on a big opportunity. At a minimum I think we ought to prepare by getting the code ready and them perhaps not actually deploy it until the SBD price is already closer to $1 on its own.

I should add I also think the curation rewards need an SBD component as currently with an elevated SBD price the curation reward being SP only is a distinct dis-incentive.

SBD price shoot affected Steem price and that is how Steem price increased. So either of them affects the other, and I think, we should leave them as it is, and the supply and demand will decide their price.

Let's let the free market do its work.

I am actually in favor of just letting the SBD float according to market rates. The high SBD price is being used by some people as a method to help develop Steem/Steemit. Additionally, the higher SBD price seems to attract a lot more attention to Steem in general.

I believe the market has spoken and the fact that the SBD is worth as much as it is currently shows its VALUE -- Why would we DE-VALUE something that HAS Value?? This does not make much sense to me and as someone who consistency posts here on Steemit the extra rewards are helping GREATLY!

I feel like at the moment its best to see what happens with SBD. See if it can run its due course and bring itself back down to the $1 value naturally, if the market is demanding it at another price than that what says that doesn't become the new stable price we will come to know in the future.

I believe there are enough pressures to devalue SBD. As the Steem dollar rises, the SBDs being minted increase. I think the pumping has to end once there are so many in circulation, and it will eventually fall back down. I don't think it needs any more manipulation. And I agree with @agroed that it will hurt the platform's growth in the short term, and I also think it can potentially devastate the price of Steem by association as SBD crashes.

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I don’t like the idea of tinkering with the peg. I would not like to have my rewards cut to a quarter, hell I just started making 0.01 SBD on my upvotes. More than that, I have used the SBD/Steem price difference to build my SP.

I don’t believe the peg can be maintained. As long as our two curriencies are available for trade offsite, they are subject to wild speculation. To be a Crypto, is to be unstable.

If the original goal was to have SBD stable enough to be used by merchants, that is something that should wait until we have active users that number in the millions. For that to happen the rewards will have to remain high to draw the people.

I don’t believe the peg can be maintained. As long as our two curriencies are available for trade offsite, they are subject to wild speculation. To be a Crypto, is to be unstable.

This is contradicted by multiple other pegged cryptocurrencies which do maintain stable values a lot better than SBD. They still have some fluctuations, pumps, etc. but the recover from them a lot more quickly, because they have all the necessary mechanisms to adjust supply to meet demand. SBD is missing one.

I am fairly new to the whole crypto thing so was not aware there were stable currencies. I would appreciate your naming a few as it warrants my further study. My intuition is they are more stable for reasons not connected to the problem we have with SBD/Steem. Thanks for the reply, btw!

BitUSD, BitCNY, NuBits, Tether. DAI.

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