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RE: Steemit Corner #5 : Understanding Debt-Ownership Ratio
What you calculate here is the external market cap, based on market prices. However, for blockchain purposes, I believe that this:
SBD Market cap= 12138911.123 *
2.54$ = 30832834.25
Should generally be this:
SBD Market cap= 12138911.123 * 1.00 $ = 12138911.123
Because the blockchain debt is based on the internal conversion rate, and the blockchain never values SBDs above $1, regardless of what the external markets say. This would put the current debt ratio around 12%.
But, it gets more complicated because - when the debt ratio hits 10% (as covered in post & comments here), the conversion rate actually dips below $1, so that the debt ratio technically never increases above 10%.
This can be observed on SteemWorld:
I think that if the value of debt ratio exceeds 10% it will automatically be displayed 10%, maybe the exact figure of this ratio 35%.
It is right, that steemchiller calculates the projected ratio as you described. But as @remlaps noted, this has no significance for the SBD print rate.
An example from the time when SBD were printed (May 2022) illustrates this:
Source
Although the projected ratio is 27%, SBD were printed, which should not be the case according to your statement above.
I played around for a few minutes earlier, and couldn't exactly reproduce that projected number, so I'm not sure what that represents.
I am pretty sure that the actual debt ratio from the blockchain perspective never goes above 10%, though. When it hits 10%, the median price is locked in a way that reduces the SBD price for internal conversions in order to prevent the debt from spiraling out of control.
The external market price doesn’t matter, because that's not the price that the blockchain uses when converting from SBD to STEEM (i.e. retiring the debt). The details are in the conversation with @moecki in the comments of the link that I pasted above. (I am on my cell phone right now, so can't chase them down again atm.)
Yes, I read the conversation with moecki, thanks for the valuable information, and I will correct my calculations as soon as possible explaining the reasons.
Thanks for the clarification