Recently, there has been an interesting discussion among witnesses about the status of a financial component of the Steem blockchain, namely SBD (or Steem Blockchain Dollars). Initially, this instrument was designed as a stability instrument, pegged to 1USD.
Recently, trading outside of the Steem ecosystem (which is controlled by witnesses price feeds) drastically increased the SBD price, reaching as high as $14/SBD.
There are two directions among the witnesses: one pro peg, and another one con. In today's post I'm going to answer to 
My Current Status And Position
Before proceeding, I want to let you know that I'm part of the few witnesses which adjusted their price feed bias, which resulted in more SBD being printed. Theoretically, a bigger supply should bring the price low, so the basic idea behind this increase price feed is to bring the SBD price down.
But, although I am in favor of bringing the price of SBD lower, I'm not necessarily in favor of bringing it back to $1.
Let me explain.
The Difference Between A "Hard" Peg And A "Soft" Peg
A "hard" peg is established when an asset is forcefully traded at a certain value, value which is enforced via collateral. In our case, if SBD should have been pegged "hard", it would have been paired with a similar amount of USD in cold storage. If the total supply of SBD is now 6.5 million, that would have mean that, somewhere, in a bank, there should have been $6.5 million. And this isn't happening, as far as I know. So SBD is not pegged "hard".
A "soft" peg is established when an asset is forcefully traded at a certain value, but the value is enforced via a proxy asset value, which is in turn hard pegged to something else. In our case, a soft peg for SBD would mean it is trading at "$the_peg_value worth of STEEM". For instance, if we establish the soft peg at $10, then 1 SBD will always trade for "$10 worth of STEEM". It won't be directly - and hard - coupled with USD. Initially, that was the plan, only the $peg_value was arbitrarily set at $1.
Now, if we follow the "soft" peg we see that at some point something nasty can happen. If we trade SBD for the US value of STEEM, it means we are "borrowing" STEEM and sell for USD. This is debt. There is this thing called "debt to ownership ratio", which, if it goes too high, can break the system.
I won't go into details, because the goal of this post is rather theoretical and strategical, but I'm open to as many simulations as you want, if any of my followers would want to go that path.
In short, what I'm proposing is: let's make SBD soft pegged to a certain amount worth of STEEM, and control this value by adjusting the supply of SBD. (I wouldn't adjust the STEEM supply because this is already announced, planned and it is nicely decreasing 0.5% for the next 18 years, until it reaches 0.5%.) This "certain amount" can also be dynamically calculated taking into account various data points: STEEM price, STEEM supply, SBD supply, etc.
If SBD is soft pegged, it means it can be traded at any value the free market will want, and, internally, all we have to do is to control the debt to ownership ratio.
In this scenario, SBD can go as high as $100 and all we have to do, internally, is to adjust our debt to ownership ratio.
There are many things to be calculated here and I'm not saying this is fool proof, it may go wrong - as everything in life - but I think it's worth at least an exercise of simulations.
Looking forward to hear your comments.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me 
Wanna know when you're getting paid?
|
|
I know the feeling. That's why I created steem.supply, an easy to use and accurate tool for calculating your Steemit rewards |