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.
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!