My recent exchange from SBD to STEEM reveals why SBD is so low. In a period of relatively stable price, 1 SBD converted to approximately 2.55 STEEM. Meaning, the conversion rate suggests STEEM price should be 0.39, but during this time STEEM's price held steady below 0.30.
Meaning, the support level provided by the conversion does not peg SBD to $1 worth of STEEM. It rather is providing a price around 70 cents for SBD.
Such a haircut in the conversion rate would be why the peg support is not working. Now, there is the question of why.
It looks like witnesses are publishing prices correctly, so either the average was extended further back than 3.5 days, or another mechanism was introduced to haircut the SBD conversion and drop support for the peg.
Would be nice if Steem's developers were more forthright about how internal calculations worked within Steem itself. I'm assuming something was changed internally to mess with the mechanism, or that the formula uses more than 3.5 days to calculate the conversion rate.
If you have a formula for how the current conversion works, I am all ears. Last I knew, it took a 3.5 day average of prices given by the witnesses, and if the witnesses recorded price right, this achieved a peg to $1 USD.
Update:
I found the link: https://steemit.com/sbd/@apshamilton/sbd-to-steem-conversions-and-the-sbd-haircut
Now that I've read the explanation, SBD should be dropped as a currency. The Dev team made it worthless by adding complex caveats to the conversion, and snuck the changes inside the recent HF20, and it was hardly discussed or communicated to the community unless you're a person slobbering over every little tweak in their system.
A valuable lesson, don't bother with any crypto, unless you follow the dev patches completely and religiously. The devs are always changing things that don't need to be changed, and these things fundamentally affect prices. A $1 USD peg is not a $1 USD peg when you involve computer programmers.
A more honest approach would have been to eliminate SBD if they believed the peg was harmful to Steem's price.