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RE: A fable about a Shepherd who also raises wolves
Ive been meaning to post about this for quite a while. You are correct. (though i don't think its the only thing thats having an effect on price).
At one time, i incorrectly attributed falls in price to an arbitrage between SBD and Steem... what i was really seeing wasn't caused by the arbitrage though, the arbitrage was merely an additional effect of the SBD peg driving the price of steem lower.
Ironically, this effect was most visible during the december rally, when it operated int he opposite direction (that is to say, SBD was higher than $1, and attempts to bring it back to a dollar increased the price of steem).
Which exactly follows the prediction my model suggests, based on my understanding of the pegging mechanism. The demand for SBD rose, which kept pushing the price up on the market, and thus downwards also on Steem. Nobody would demand to hold SBD if it had an interest charge instead of a dividend.
Also, the accounting is only done when transfers are made, which makes it more unpredictable (the latent interest requires transfers to manifest).
There needs to be a way to continuously burn it, having it revert back to Steem and diminishing the denomination of the Steem Backed Dollar tokens, where currently they go the other way. Otherwise it compounds its effects, because the growing amount grows by the same percentage each time period. I think if we can just set an interest fee on it instead of an interest dividend the witnesses can really have a positive effect on steering the Steem economy, slowing or speeding up the rate at which SBD decays in value to keep balance between Steem's needed $1+ price point and sufficiently low fees on holding SBD.
I think after this, almost overnight SBD will become considered a payment asset and Steem a saving asset (with power boost by locking into time delay withdrawal for SP). It would be such a neat fit with retail markets who would be able to lock their Steem assets during payments and escrow and fulfillment periods then they pass it on, like a hot potato (because it is eroding before your eyes, a fraction of a percentage per day. This will encourage spending and it will end the compounding effect that is threatening the viability of operating the network.
Im skeptical that this solution is feasible, or acceptable to most people. But even if it was, its far more complicated than the best solution, which is simply to allow SBD to function in the manner that it was likely originally intended.
Make it redeemable, on demand, for a dollar worth of steem. ANd purchasable for the same amount. No wait period required. This would mean that it would not trade against steem because, since its redeemable/purchasable instantly for a dollar, it wouldn't trade on markets at all.
The reason outlined in the whitepaper for the wait period is patently absurd. The "vulnerability" they describe, the idea that someone could buy SBD when the price of steem was high, then redeem it for more steem when the price was low is a vulnerability of every fungible assett. I could do precisely the same thing with USD.
I have a whole post about this shit half written maybe youve inspired me to finish it.