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!