When BitUSD is borrowed/created it is backed by at least double it's value in BTS. If value of BTS collateral drops below 175% of borrowed BitUSD more collateral has to be added or there could be automatic position liquidation, so no 3rd party risk is created. Similar mechanism can be used for SBD.
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That's my point. BitShares is an exchange. STEEM isn't. It's more easily said than done, and without those mechanisms, you would introduce 3rd party risk. As I've already overly expressed and reasoned in this thread (and most certainly shouldn't complicate more with unnecessary repetition), I don't think it's in our best interest either. Why should we worry about other people's bad decisions, especially when it means a cost for us which at best only minimally mitigates? That's not our responsibility, nor a reasonable way to invest our time, in my opinion, of course.
Steem is an evolution of Bitshares, built with the same graphene blockchain toolkit, so it has the same capabilities, if enabled. It already acts as a simplified exchange and with addition of SMTs it sure will get more advanced exchange functionality.
It may or may not make sense to add ability to create SBD by the same mechanism as BitUSD is created, I wont argue, but it could be done and it may help improve USD peg.
I will leave it at that. If people find this proposal worthy it will get done, if not, so be it.
Thanks for this discussion.
No, the truth be told, the only way to really have a true dollar pegged asset is to not permit outside exchange trading. If BitUSD was traded somewhere else other than on BitShares, you could bet your bottom dollar that the same thing would be happening to it that is happening to SBD, until BitShares was arbitraged dry, or they stopped it. With a limit cap + limited annual inflation on STEEM, there is no way SBD could ever be a true dollar pegged asset as long as it is traded on outside exchanges. In other words, the only way to make SBD a true dollar peg, is by only allowing an internal market. Of course, there are those who will say that you can't stop offsite trading between individuals, or even exchanges, if they want. That would be the equivalent of a black market, and we all know that black markets charge premiums. Nonetheless, the internal market could peg at $1.00USD, and all you'd need to do is buy STEEM to be able to do that, so there wouldn't be too much incentive to pay a premium on the black market anyway.
It's not like I'm arguing against your proposal; more like I'm just sharing my views and ideas, thinking out loud so to speak - as I started by first saying, I've found your ideas interesting, and as our conversation has grown, challenging as well.
Cheers
It remains to be seen if your theory is correct. However we don't have to wait much longer to find out.
The exchange AEX.com has opened BitCNY and BitUSD trading pairs this week.
https://www.aex.com/page/trade.html?mk_type=BitUSD
https://www.aex.com/page/trade.html?mk_type=BitCNY