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RE: Doom, Gloom, and the SBD Debt Ratio
What they don't get is that the SBD pump or a sustained price over $1.00 is a good thing. That creates a flood of revenue into STEEM. They are so focused on stabilizing the upper bounds of a coin that inherently only has a floor. And for what? so they don't have to do math on the US dollar equivalent price of SBD?
It is amazing to read people complaining that the price of SBD gets too high. It is like complaining to an employer that their paychecks are worth too much. People have no economics sense. That is why we need economic professionals to consult before making such decisions.
The good thing of the sudden SBD dumping is that it reduces the SBD supply and lessens the debt burden. Hopefully it will find equilibrium before the haircut.
From a blogging perspective the pump helped. The issues is if SBD is not stable then why have it (it is just a liability to have a debt instrument for no reason). I can see why they want a stablecoin however for DApps wanting to sell items. It is just not easy to create a stablecoin when the primary asset (STEEM) underwriting the coin is so volatile.
I think it was hubris to try to create a stable coin this early. Stabelcoins should be a project in itself and not added to an experimental proof of stake coin.
I have said since the beginning that I am behind removing SBDs completely as they are not really fit for purpose and there are other tokens specifically designed to operate as stable coins. I see that it makes more sense to get Steem listed on services that are intended to solve these problems, such as those that provide debit cards for crypto as it will be relatively simple for them to add in features to autoconvert crypto to a stable coin if that's what people want/need. All this said, I have read a lot about how Tether USD is not actually backed by any USDs.. lol. There are other stable 'coins' around though.
I agree that the SBD print rate adjustment was not properly discussed or its implications understood - witnesses have already stated that we are generally not happy with the way that multiple new features are lumped together into hard forks, which doesn't give us a good way to assess and test their effects individually. Currently though, only top 20 witnesses have any ability to affect the outcome here and I am not yet in the top 20.
I just voted for you for witness ura, I think we should get rid of SBD too
Thanks a lot for the support :)
@ura-soul for the win!!!
The meaning of Steemit is experimentation, but such things should be done at least a bit systematically and I agree that the hardforks seem a bit like arbitrary ideas thrown together on a whim. Only chaneg one ingredients in your cookie recipe. Else you will not know what happened. I voted for you too.
hehe - it's pretty much common sense, though usually when there is a fork there is also a significant amount of work needed from exchanges and witnesses - so that is possibly part of why they lump the changes together. I think we definitely need to formally address this issue though asap! Thanks for your support too :)
I think the problem is that everyone assumes that SBD is a stablecoin. It has a floor not an upper bound. It is different from stablecoins out there. The real stability comes from adoption and growth which has not come yet. Trying to make this into a stablecoin with manipulation will have negative consequences.
I think the first step is to stop calling SBD a stablecoin. Even long ago Dan Larimer explained that SBD has a floor and not an upper limit, but everyone still today believes that SBD should have an upper limit.
There is reason to have SBD. Just like the US dollar has a US Savings Bond. It is a mechanism that generates revenue and growth in an economy. Removing conservative safety mechanisms to control price is a bad thing.