After pouring your heart and soul into writing a your best post yet, choosing pictures that perfectly catch the mood of your post and picking 5 insightful tags there is one final decision to make before you post.
50:50 or 100% Power up? lets face it no one really chooses decline payout!
At today's prices you would get about 30% more for you post if you choose the 50:50 option and immediately convert your SBD to Steem.
SBD
Steem Backed dollars or SBD are one of the most impressive innovations of the Steemit platform in my opinion. SBD is a counterparty free asset that is worth about 1 US Dollar. The idea is that market forces automatically correct the value of SBD so that it is always trading at 1 US dollar in value. It takes the volatility out of Cryptocurrency which is a good thing and the innovation of not having a counterparty backing it means credit risk is reduced.
In contrast consider what happened with the UDST in recent months. It's back at parity now but market forces built in a discount as there were concerns over the credit worthiness of the backing institution. In short there were worries there would be a run on the bank.
Market Forces
In recent months SBD has been trading above 1 US dollar which means that market forces should act to drive down the price in the long run, back to 1 US dollar.
Which Payout Option to Choose...
When you get a payout from a post you get the value either in;
- Steem Power if you choose the option to power up 100%
- or a mixture of 50% Steem Power and 50% Liquid Steem if you choose the 50:50 option
If the price of SBD is above 1 US dollar, to maximise your returns, it is better to choose the 50:50 payout option and when your post pays out you can convert your liquid rewards to Steem or Steem Power manually. This is the market mechanism that should drive back down the price of SBD to about 1 dollar in value. It's a bit manual but can increase you post payout significantly.
On the other hand if SBD is below 1 dollar you would maximise your post payouts if you choose the option to get a payout 100% in Steem Power.
Many thanks to 
SBD or $
One final note for reference. The price quoted in the markets tab, on www.steemit.com is SBD. It seems at first glance much lower than what you would get on Poloniex but that's because the trading pair is Steem and SBD not Steem and USD or SBD and USD. There may be a small difference but it is not that big at time of writing. The savings in this post are based on todays fx rates:
- 1 Steem = US $2.08
- 1 SBD = US $1.62
Thank you for reading this. I write on Steemit about Blockchain, Cryptocurrency, Travel and lots of random topics.
Image Sources https://pixabay.com/
