RE: I submitted my first hardfork pull request to the Steem blockchain! (Updates to the SBD print rate.)

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RE: I submitted my first hardfork pull request to the Steem blockchain! (Updates to the SBD print rate.)

smooth in #steem • 7 years ago (edited)

I think the haircut is less systemically broken then the print limit. The haircut shifts existing price risk from STEEM onto SBD holders. If they don't like having more risk, they can sell, at which point the SBD price will drop, SBD will start getting converted and its total supply will drop. It at least tends to push SBD in the right direction. The print limit is the opposite: If SBD is overvalued, then it doesn't get converted, the supply steadily increases and then printing stops, which makes SBD more scarce and potentially drives the price even higher (WTF?!).

I understand you have expressed concerns about the haircut but personally I don't see it as a problem (other than potentially impairing the utility of stable SBD at some point, but we are so far from that now, not something to worry about at this point).

7 years ago in #steem by smooth

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buggedout 7 years ago

Has the idea of implementing reverse conversion of STEEM -> SBD been abandoned? Seems to me this proposal is just a band-aid fix that gives more tolerance/flexibility but makes any systemic break harsher.

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smooth 7 years ago (edited)

I would not say abandoned but it is certainly more complex and farther away from being implemented and deployed (if ever).

I agree with you that reverse conversions (or something like it) would be more effective in maintaining the peg but this doesn't make this proposed change a bad idea. I believe the print reduction is probably the most broken part of he peg system in Steem. I would remove it altogether, but failing that, increasing the limit is certainly better than not doing so.

As far as I can tell reverse conversion would have similar results in terms of any systemic break, indeed possibly worse. I'm not sure what you are suggesting there.

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knircky 7 years ago

Why are we not doing this, and hat can we do to move this forward?

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smooth 7 years ago

@timcliff discussed some of the challenges with getting development done that isn't on the existing roadmap. That applies even more so to something like STEEM-to-SBD conversions since that code is more complex. There is also the matter of whether there is even sufficient support for it. It seems more people find the conversions approach to be risky or undesirable. There still could be enough support though.

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knircky 7 years ago

yes I see. I would love to help in that effort, but not really sure how. I think SBD is essential for the success of apps and any economy built onto of steem, which in turn is essential for the survival of steem imho.

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buggedout 7 years ago

I guess I am referring to the "haircut" scenario where the peg really ends up potentially a lot lower than $1 USD.

A couple of months back I wrote about The Coming STEEM DOLLAR Purge but I now realise I got it wrong. With a haircut dynamic in play the downside limit to SBD is effectively gone and we could totally downward spiral in a negative feedback loop.

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shakilkhan 7 years ago

thank you @gentlebot

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