Graph to analize total supply of SBD over time with some interesting observations
I set out to see what the total supply of SBD was over time, and I found it interesting to plot both the supply and the price of both SBD and Steem on the same graph. In order to fit them all on the same graph, I have the prices of Steem and SBD in dollars, and I have supply of SBD in millions with the supply of Steem in hundreds of millions. I also cropped off the top of the graph because I wanted to focus on the total supply of SBD.
I found it interesting how the supply of SBD went from 1.1 million on May 5, 2017, to 3.5 million on July 17, 2017, because those numbers have the supply of SBD more than tripling in a little more than two months. The total supply of SBD stayed roughly the same for about 5 months and then recently the total supply of SBD in circulation doubled from 3.5 million to 7.0 million in just the 51 day period from December 5, 2017, to January 25, 2018.
It is also interesting to observe that when the price of SBD is above $1 then the supply of SBD increases rapidly which makes sense because when SBD is greater than $1 it makes sense for people to go with the default payouts of 50% SBD and 50% Steem which increases the SBD supply, and also when SBD is greater than $1 people tend to trade SBD for Steem instead of converting SBD for $1 worth of Steem which means SBD isn't removed from circulation. Note: Steemit.com recently removed the ability to convert SBD into $1 worth of Steem on their website because they didn't want people to make that costly mistake with the SBD price being so much larger than $1, and I'm assuming they will add that conversion feature back in when the SBD price goes below $1 again.
What I also find interesting is how it seems like when the SBD price starts to rise it leads the price of Steem up along with it. This makes sense because when the SBD price is a lot more than $1, then the 50/50 author rewards are worth a lot more which makes it even more desirable to have Steem Power.
I have no idea how long SBD above $1 streak will last, and I'm surprised how long it has stayed above $1 considering how high the inflation rate of SBD has been. I've heard people call Steem an inflationary currency, but the chart shows that Steem's inflation rate looks almost flat when compared to the steep inflation of SBD supply recently.
It will be interesting to see what happens over the next few months. Back in the middle of 2017 the "Open" price of SBD was over $1 for 83 consecutive days. The current streak of SBD being over $1 has been going on for 64 consecutive days and with SBD trading at around $7 it seems like it has a very good chance of breaking the 83 day streak set back in 2017; however, I've learned not to be surprised when I am surprised by cryptocurrencies.
Its called deflation in my opinion thats what is happening. What reason do you have to think SBD will go down in price? The only deal ive found is that it wont ever be less than 1 dollar.
When I talk about inflation of total SBD supply I'm talking about the blue line on the chart that is currently going up now. The price of SBD may be going down, but the the supply of SBD is inflating. I'm not really sure what SBD will do in the short term, but I know that SBD was designed to try and stay around $1 and eventually the systems in place to try and keep it around $1 seem like they should win out in the long term. SBD can actually go below $1 and it has, but when that happens there are systems in place to try and bring it close to $1 again.
Where are you basing these statements off of? All i can find is a simple promise sbd will never be worth less than 1 usd. I just would love info on it as ive scoured long and wide for further explaination but nothing other than it will never be less than one dollar
I'm basing my thinking off of the SBD section of the Steem whitepaper. As for the SBD price never being less than $1, you can see in the chart that there are times when it is less than $1, but it typically isn't less than $1 by much and isn't less than $1 for long because, per the whitepaper, there is a 3.5 day process where you can convert SBD to Steem which attempts convert 1 SBD into $1 worth of Steem. However, this isn't a guarantee because there are some variables involved (which I don't fully understand yet) where you don't always get exactly $1 worth of Steem after the 3.5 days conversion process.
It's illogical to me , i mean why one would buy sbd for steem .
If you think about it and crunch the data you have gathered SBD price should have fallen a time ago but you are right @twodollars everything is a surprise in cryptocurrency .
I mean the supply is very high right now of SBD .
interesting statistical report on sbd, its hard to believe sbd will get back to the dollar mark unless its forced by some processes to get back, last week when it got down to the $3 mark i thought that was the end of the pump but amazingly it went back up to $7 even surpassing steem that was in the same range as it at that particular time.
SBD is being forced by some processes to get back to $1, but those processes haven't yet been able to do their job, but they are still acting to try and bring SBD back down to $1, and I think they will eventually do it. The inflation of the supply of SBD is the process that will bring SBD down to $1 which is why I wanted to graph the total supply of SBD. When people chose the 50/50 payout, a $1 payout is rewarded with $0.50 worth of Steem and 0.5 SBD, and if SBD were still at $7 that would be $3.50 worth of SBD. With SBD way above $1 everyone should be choosing the 50/50 payout (inflating SBD supply) and also nobody should be converting SBD for $1 worth of Steem (nobody deflating SBD supply) and this acts to increase the total supply of SBD (as seen by the steep slope of SBD supply on the graph) and this inflation of the SBD supply puts a lot of downward pressure on the price of SBD. I think it just a matter of time, but how long is the question.
Speculators have taken over. What we do here will take a long time before it is felt in the market
Great job! I got mine in at 4 last week!
Nice post indeed. And thank you for your analysis. As I'm searching for a proper chart STEEM/SBD I ask you if you came across of it. TY
@twodollars
Here is a quick Steem/SBD chart that I just made (the purple line is Steem/SBD). I'm sure a better once exists, but I don't know of any.
Wow, excellent. 👍 @twodollars
I did some internet search and found https://steemchart.net/ by https://steemit.com/trading/@jaka/steem-sbd-price-chart#@dauerossi/re-jaka-steem-sbd-price-chart-20180124t140644252z Site is down for a while. Unfortunately I have a lack of knowledge to do it.
A couple of weeks ago, the price of SBD was more than 5 times higher than the Steem price. That was the right time to power-up Steem Dollars. Unfortunately, at that point, I was too inexperienced to know that. Cheers! : )
Fun fact: STEEM price affects directly the SBD supply generation as well. So I would actually say the causation is reverse. Because, STEEM rewards pot is actually fixed, and it's in STEEM. When payouts happen, at 50/50, STEEM gets converted to SBD at the price feed rate (STEEM's USD price). Thus, when STEEM's price is 5 USD, SBD is printing at 5x the rate that it does compared to when STEEM's price is at 1 USD.
You can see details from my analysis here.
I read the post you linked to and the posts it linked to as well, and they were all very informative, and I highly recommend them to anyone who enjoys really trying to understand the inner workings of Steem. You bring up a very good point that I didn't think about when I made my post, but it is important to mention that as the STEEM price goes up, the SBD printing/inflation goes up as well. However, I'm not sure if I understand what you mean by "causation is reverse", but I think we are on the same page, but please let me know if you see any flaws with the following reasoning. When the SBD price spikes from $1 to being much greater than $1, then it makes people want STEEM more because, for example, if STEEM is at $2 and SBD is at $1 then a 50/50 author reward worth a total of 2 STEEM results in a payout of 1 STEEM and 2 SBD which has a dollar value of $4 (i.e. $2 for the 1 STEEM plus $2 for the 2 SBD); howeer, if SBD price surged from $1 to $9, then in the same example above that same 50/50 author reward would result in a payout with a dollar value of $20 (i.e. $2 for the 1 STEEM plus $18 for the 2 SBD). Based on this example, the income generating potential of STEEM Power went up 5x which makes it a lot more desirable to have STEEM Power with SBD at $9 than with SBD at $1 which is why I think a surge in the price of SBD should increase the demand for STEEM which should apply upward pressure on the price of STEEM, and then, as you pointed out, a higher STEEM price will result in more SBD printing/inflation in addition to the inflation resulting from everyone wanting to do only 50/50 payouts and nobody wanting to use the 3.5 day SBD to STEEM conversion process. Is this the way you see it too?
Oh holy cow, that's funny that it still works out that way. Was missing the observation of SBD price effects. It seems to check out. I see what you are saying.
The subsequent SBD supply growth should eventually than being the price down gradually also. But yeah so far it's... Slow.
Yes it is kind of funny how both effects can be happening at the same time. I think the effect you mentioned of "STEEM price going up results in more SBD printing which pressures SBD price down" has a longer lag time which seems to be maybe around two or three or more months (e.g. the "Low" SBD price was greater than $1.10 for 73 consecutive days from 4/25/2017 to 7/6/2017 and also for 66 days and counting from 11/23/2017 to present.) while the effect of "SBD price going up results in purchasing power of 50/50 rewards going up which pressures STEEM price up" may have a lag time of maybe a week or so as people start noticing their 50/50 post rewards have more purchasing power than normal.
:(
Also, I would really like to hear your thoughts on the @lukestokes article about pegging the SBD. I'm not in favor of conversions in both directions, and I left a comment where I mentioned the "Steem community holding the bag" and I was wondering what you thought about the post by @lukestokes and my comment.
Hi.
I searched long time an analysis of SBD supply / SBD price.Big thx !
One question, how have you collected sbd supply over time ?
I got the SBD supply numbers from coinmarketcap.com's SBD history where I calculated it from "Market Cap" divided by the "Open" price.
oh thx !
Have automated the data collection ? if yes, how have you made it ?
I just did a copy and paste into a spreadsheet.
Interesting analysis...I was confused by the higher SBD price than steem price anyway..I just understand that it is a good time to power up with SBD....
I didn’t realize how fast the supply increases from higher steem prices . That makes sense
Love this post. I have no clue how SBD works, but I'm not complaining with it being worth 6$. Thx for the data