The SBD-USD peg is doing us a huge favour!

There has been quite a lot of dialogue around the price of STEEM and SBD, and how the 1SBD-1USD peg is broken, which is resulting in a whole big chunk of SBD being generated as rewards, wich is making it possible to buy more STEEM, while trying to keep the SBD price from skyrocketing again. The way it is now, this is making our posts rewards so much higher than they have ever been.

A LOT higher!**

If the SBD peg was to be abandoned, and the real price of SBD taken into account for our rewards, we would be getting significantly less SBD. Less SBD means a lot less USD reward value, and a lot less potential to buy up STEEM and POWER IT UP!!

Let me explain:

Post rewards as they are now

Let's keep things simple by setting a few parameters here:

We'll set the post reward after curation split to $30.

The post reward is calculated in STEEM (technically in VESTS which are converted into STEEM tokens), and converted into $ at the price feed maintained by the witnesses. So if your post reward is 5 STEEM, and the STEEM price is 6SBD=1STEEM, your potential reward is $30 (based on the 1SBD=$1 peg). Of course you only get about 75% of that due to the curation split, but let's say your reward after curation is worth 5 STEEM.

Now here's where it gets interesting.

The reward is split in half, so you get 2.5 STEEM, and 2.5 STEEM's worth of SBD which, because of the 1SBD=1USD system peg, translates to 2.5 STEEM x 6 SBD/STEEM = 15 SBD.

Now you can take the SBD to the internal market (or Bittrex or wherever you can trade STEEM and SBD), and buy STEEM at about 0.821946 SBD/STEEM, and load up on another 18.75 (about that) STEEM!! That makes your USD value of your post reward somewhere around $90 at the current price of STEEM ($4.3 at time of writing this).

What happens if we take away the peg and use the market price of SBD?

Now let's say the 1SBD=1USD peg is done away with, and the market rate for STEEM is used instead. The market rate is currently about 0.821946 SBD/STEEM, so for simplicity let's say it is 0.8. That 2.5 SBD you got would change to a paultry 2.5 STEEM x 0.80 SBD/STEEM, or 2 SBD.

Take that back to the market and buy the STEEM back at 0.8 SBD/STEEM, and you're back to your 5 STEEM, which at the price of $4.3 gives you a USD 21.5 post value.

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So there you can see that they way things are right now; keeping the 1USD=1SBD peg locked in for calculating rewards, we are being rewarded more than 400% above what we would get if the market rate was being used. This is allowing the smaller accounts, like me, to grow their STEEM POWER at a much higher rate than has ever been the case.

Now please don't do this:


Make sure you do this:
This is where you get the best rewards!!

Images used from pixabay.com. The tables were sucked out of thin air...(no, I did a little maths).
Team Australia banner by Hive account@bearone. My awesome Upboks courtesy of Hive account@ryivhnn.