RE: Beyond SBD: A Stablecoin for the World.
SBD is not a stable coin. It has a floor and not a ceiling. Witnesses pushed to remove the conversion option and to never reinstate this option for the average user. They also pushed to remove the conservative cushion that slows/stops SBD print rate. They did this to artificially drive the price down so SBD would not go over $1.00. This attempt to artificially manipulate price of SBD ceiling has backfired. Here is the crazy thing. SBD high price creates a stream of new revenue into the STEEM economy. This is because SBD is a mechanism to generate revenue through selling debt. Think of it like the US Savings Bond where the US sells these bonds to stimulate the economy. Why did witnesses do this? All because they believe SBD should be a stable coin when it does not have a ceiling. That term “stablecoin” confuses people including witnesses into thinkin SBD is something that it is not. Witnesses never understood the impact of manipulating the SBD ceiling. They also don’t understand that a low SBD price hurts the STEEM economy while high SBD price helps STEEM economy.
What everyone needs to do is stop calling SBD a stable coin. Then they need to go and research why economies sell debt. Once they understand what SBD is designed for, then we can use SBD debt mechanism to build the STEEM economy.
We also need to demand to our witnesses to consult an economist before making decisions about our currency. HF20 has driven a change to bring real testing to future Hard Forks. What was missed is there is zero action to bring in economic experts whenever a change affects our currency. Witnesses will still suggest really bad ideas that affect the currency or just blindly accept the change without understanding the impacts.
This is a fascinating article. Question; Kinesis will use the Stellar Blockchain as a DAPP or as SMT ?
I think this project can be very successful.
How does this impact Stellar?
Thanks
It carries Stellar to the utility its founders hoped for: global scale of utility in terms of transactions.
Stellar is the main technology infrastructure; Kinesis will be like a stablecoin-issuing protocol upon Stellar.
You make a very interesting point. A lot of blockchain projects attempt to create a token or coin but the founders (or delegated nodes) have a poor grasp of economics.
It'd be best for Steemit if some economists would advise upon fork decisions.
In the case of coins backed by gold, attempts in the past were by tech teams that lacked the business/economic grasp of what they were undertaking and thus the projects did not end well. This time, a well-established bullion exchange is undertaking the project of developing gold-backed coins and thus the economics that are cored around a currency would be properly actioned.
You still going strong Socky. good to see you being active even in a bear market :)
It puts hair on the chest. :-)
^ This 100%!!!
I'm relatively new, but as I've been using it recently, I'm certain that the convert function still exists. And on the other point, is the SBD print rate stoppage not currently in effect (or recently)? Definitely seen payouts go to Steem instead of sbd before, or are you talking about a different cushion? And as to your point about the ceiling, I'm in favor of a ceiling for SBD to stop these boom bust cycles, which I believe therealwolf has written about recently (might be wrong as to whom). Is there a reason you'd prefer SBD to be a volatile debt instrument rather than a stable one?
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The cushion was there before HF20. Printing of SBD had stopped well before HF20. The cushion stops the printing of SBD well before the haircut takes place. The change was put into place to continue printing SBD right up to the haircut. Now we are in haircut territory. When haircut takes place, you no longer get $1.00 worth of STEEM for each SBD. Thus the bottom price of the SBD peg is compromised.
The conversion was once a thing built into the Steem wallet via the Steemit front end. Back when SBD prices were sky high, that option was removed to help prevent people from converting and only getting a dollar worth of STEEM for each SBD. I agree that this was the right thing. When SBD fell to a dollar, I argued that the option should be reinstated. This is where 99% of STEEM users actually use the wallet. Witnesses knew this and decided to keep the option out of the Steemit front end where most use the wallet. People found it more convenient to use the market which doesn't convert the SBD. This was all part of the plan to prevent conversions and over-inflate the SBD supply to manipulate SBD price. Changing the print rate of SBD was just another tool to over-inflate SBD supply. It was a gamble that backfired.
If you want a stablecoin, then create a stablecoin. SBD is not as stalecoin. It is a tool to grow the STEEM economy. You should research how governments use debt instruments to help grow their economies. You will find shocking similarities. It is genius really to have a debt instrument built right in our STEEM economy. The dumb thing was to try to manipulate it to artificially control price.