sell all your SBD.
Unstable Stablecoins
4 years ago by jacobgadikian
105.65 BLURT
21 votes $0.15- Past Payouts 105.65 BLURT
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Unstable Stablecoins
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Already did.... it was wild
I have been doing this a lot. Same goes for HBD. They are both coins with price floor; not price stability (at least when you look how they work under the hood)
The last time I checked, the way it worked was that if there were 5 million HBD/SBD in circulation, as long as HIVE/STEEM marketcap exceeded 10 times that ($50 million USD in this case), you will be able to redeem $1 worth HIVE/STEEM per each "Price Floored Coin" you own. This was not a 2 way peg. There is nothing that can say HBD/SBD cannot be worth $100. In fact I would say that it makes sense for HBD/SBD to be worth more than 1 BTC.
To me SBD/HBD are both very close to DEC in action. They provide an upward pressure to the price upto a level ($1 for SBD/HBD and $0.001 for DEC) but not downward pressure to keep it at that level.
The only downward pressure is when the debt-ratio is above its set level (of 10% now) and SBD printing stops. Note the price is then set algorithmically by the system, which could cause a price collapse on external markets - this happened in early 2018.
This whole issue is potentially interesting and I just wrote a (slightly tongue in cheek) post about it: https://blurtter.com/cryptoblurt/@rycharde/the-myth-of-peg
When SBD printing stops or throttles, shouldn't it create scarcity instead? Why would it create a downward pressure!
scarcity != value
today's mantra.
To answer your question, SBD has no creative function. It is SP that creates rewards and the only way to switch on SBD printing again is to lower the debt-ratio, which is calculated based on the STEEM blockchain price plus the assumption of SBD worth $1 of STEEM. Hence SBD price drops to align with the internal calculation. Now, the external market price can ignore this - and back in Dec 2017 it took 6 months for the market price to come back down to $1 because at the time the debt-ratio was very low - but there is no point in buying SBD at "market rates" when one can buy it cheaper by buying STEEM and using the internal market. Hence, the internal economy does not directly affect market prices but it creates arbitrage trades that influence them.
scarcity != value
;-)
Scarcity may not create value but it will certainly not create any downward pressure as you explain:
Imo, the downward pressure will trigger only when HIVE prices drops drastically ...I mean, it goes very very low so that it increases the debt ratio several folds, much higher than the desired (i.e. under 10%). That is to say, when investors lose confidence in HIVE, it's obvious that HBD will lose it value too. But I've high hopes for HIVE as well as HBD ;)
don't you think it can go more up...?
It is supposed to be worth a dollar, if working properly.
Get out at $5, while you can, IMO.
Keep in mind: an SBD price of $5 is a bug.
It isn't a bug - the bug was in whoever wrote the steem whitepaper and drivelled about a "peg" that was never encoded. There is an internal conversion rate, that's it - that's all it ever was. There is no peg-to-market.
We've seen SBD at $12 in Dec 2017, albeit briefly, as the debt-ratio then rose to switch off the printing tap.
thanks for your guidance , i ll do this now.
There is no peg - it's a myth.
Words deceive - the maths doesn't.
SBD is thinly traded on few markets. To "sell" your SBD you may need to sell on the internal market for STEEM, then sell that.
This is an amusing new phase of the Steem experiment. ;-)
Projections for this bull run are 25$ and Steem 5$. I will wait till then and then sell probably.
good luck
for me, I don't get it :)
same here , I don't get it either.
Even if it gets there, the ratio of SBD to STEEM will become 1:5. In comparison to today's 1:12, it would be a disaster to not to sell it for STEEM now.
Do your math!
Last time SBD got there first and Steem followed. However, getting Steem is not that hard (Delegations, curations) SBD might be rarer, especially after Stopping of distribution.
Unfortunately, already made back then when it had almost nothing left in value. Today, that would have been a great pot.
I think I have some. Clearly time to sell.