Per Dan Larimer, the SBD is guaranteed to be "not less" than $1.00. It is desiged to have it's own value as it's own token. It can definitely trade higher than $1. Better question is, what is driving that particular token's price upward?
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The white paper states:
The authors of the white paper got this wrong. Over the past year it has not only not had a narrow trading range but it has been well outside of that range for a very significant portion of the year.
What was intended and expected was not accomplished, because the mechanism as designed is deficient.
Okay, I'll take a stab at it. I'm guessing that Steem Backed Dollars (SBD) are Dollars that are backed by Steem. So, if Steem rises, and you're sitting on SBD and not US dollars, then your ration of SBD to Dollar should increase as well. Well Steem just took a joy ride up the $8.00 range recently and I'm guessing that the inflated SBD price is directly related. if people hold on to those SBD's then they will continue to see a healthy swap rate to the US dollar when it's time. If they decide to cash out, well then the swap price declines and normalizes back to the 1:1 range with the US Dollar. Steem is a decentralized platform with it's own governance model. I believe vote can change just about anything. I am personally going to give the developers a pass under the argument that this recent run up in Steem price does not qualify for "normal market conditions". Great post my friend! Thanks for sharing!!
If cryptocurrencies moving up and down, even quickly, is not part of someone's idea of "most market conditions" then they have no idea how this market works and has worked for the past 7-8 years.
Likewise, thank you for the discussion!