RE: How to make money with Steem and SBD

[markkujantunen]

The conversion function does not work when the market cap of SBD is over of the market cap of STEEM like now.

Comments

[benicents]

At least from a code standpoint it seems to be working ok. But can you elaborate?

[markkujantunen]

You can start the conversion but it is no longer guaranteed that you get 1 USD worth of STEEM for one SBD. Thats why SBD is so subtantially below 1 USD now.

[benicents]

Thanks for that. My point was that outside of a couple of less reputable exchanges, SBD is in fact tracking a dollar pretty well. The price shown on coinmarketcap at least is not the real market price. Do you have a reference for your assertion though? I'd love to check that out.

[markkujantunen]

Which assertion do you mean? That the peg breaks (conversion at 1 USD per SBD no longer guaranteed) when the market cap of SBD goes above 10% of the market cap of STEEM? Or that this causes SBD to go below 1 USD?

The ratio of the market caps of SBD and STEEM is called the SBD Debt Ratio because SBD is actually a debt instrument that the system makes possible to redeem at a value of 1 USD. SBD stops being printed when the debt ratio goes above 10% and the printing slows down at 9%. That the conversion mechanism no longer guarantees 1 USD worth of STEEM for every SBD and that the printing of SBD stops at a Debt Ratio of 10% are fail-safe mechanism the purpose of which to protect the price of STEEM from cratering to extremely low levels owing to conversions.

[abh12345]

!ENGAGE 25

[misterengagement]

@markkujantunen you have received 25 ENGAGE from @abh12345!
View and trade the tokens on Steem Engine.

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