Here is a little thought experiment: What if people around the world realize that Steem dollar is actually really good currency and start to use it?
Maybe some economic crisis in a third world country drives people to look for a way to protect their wealth. Transactions in Steem blockchain are free, so it's very affordable to use in everyday business – even for poor people.
Usually when the demand for something goes up, the price goes up as well. But if the commodity in question happens to be price pegged to another currency, price should not go up. That's how SD works – it's pegged to USD.
If there is lots of demand but price will be the same, then the quantity should go up. But that's also impossible, because SD is not created to satisfy demand. Instead, the blockchain creates it for Steem users as a reward. How much is created depends on how valuable the blockchain is.
My initial thought is that it's very possible to see that there are times when SD will be traded with price significantly more than one USD. This will very likely raise the value of Steem blockchain, which will then create more SD – but how fast this mechanism can respond to the demand?
Price peg mechanism includes an internal exchange for Steem and Steem dollar. Because there is also a liquidity reward, I'd guess that the peg will hold quite well at least in there – traders have incentives to trade close to the peg. But other exchanges might be a different story, at least in the beginning when most trades for SD are made with Bitcoin in other crypto exchanges. But this will create great arbitrage possibilities for traders, so in the long run peg should hold everywhere.
Any thoughts? The Steem blockchain has some unique features which make it difficult to understand and predict how the prices will evolve over time.