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RE: BTS, STEEM and SBD - Price of All Went Up!

in #bitshares7 years ago

SBD is what one might call 'half-pegged'. That is, pegged from falling much below $1 but not particularly from rising about $1. If it falls below $1, then market makers (or anyone) can profitably buy up SBD, and convert it into STEEM, both raising the price of SBD and reducing its supply. However, if it rises above $1 then the only mechanism to get more SBD into circulation and satisfy that demand is to wait for more posting rewards. There are both advantages and disadvantages to this system. A proposal was made by @timcliff to allow conversions in the opposite direction which would make it more of a real-time two-way peg.

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Thanks so much for helping me to better understand SBD. Very interesting. I think I kind of like it as it is.