"It's been an incredibly vicious cycle of people losing confidence in SBD > witnesses offering massive discounts to Steem > pegging SBD at an enormous expense in the value of Steem > now with a high debt ratio, offer further discounts etc. This further increases the SBD debt, so on and so forth."

Yup, that's what @thecryptofiend was getting at as well. It's not good in the long term to operate this way.