Experiment of SBD Conversion: Loss of 72 STEEM

in hive-102132 •  6 days ago 

Three and half days ago, I made an experiment of Converting 2600 SBD to STEEM, I sold STEEM in internal market for 2600 SBD and then converted to STEEM back, which takes 3.5 days.

Today, I got 9928.280 STEEM back, which means I made a loss of about 72 STEEM.

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The conversion starts at Block 92942493

1 | 2025-02-12 08:53:09 - convert
💰@justyy starts to convert 2600.256 SBD to STEEM (3.5 Days) - Request Id: 1739350369

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The conversion finishes at Block 93043058

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4294967295 | 2025-02-15 20:53:09 - fill_convert_request
💕
{"owner":"justyy","requestid":1739350369,"amount_in":"2600.256 SBD","amount_out":"9928.280 STEEM"}

Steem to the Moon🚀!

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This is not a surprise, and given your position as a witness, it is surprising that you expected any other outcome.

The on chain conversion uses the on chain price feed of steem (which as a witness, you and other top 20 witnesses publish !) to calculate how much steem you will effectively receive.

Since the price on chain is now higher than 0.26, you will receive less steem as you are effectively 'buying' at a price higher than which you sold for sbd.

Why is the on chain price higher?

A couple reasons --

HTX is the only venue that trades SBD now, but the wallets are offline. Price discovery cannot be exercised if the vasts majority of SBD that is now not trading on Upbit, cannot migrate to this new venue.

At the same time, the market cap of Steem is at time of writing, about 84 million and per 10% debt limit and haircut rules, the value of SBD will be valued and convert for less than 1 dollar.

The only way things will resolve now, is if steem's mcap increases to about 140 million, or the number of sbd reduces to under 8.4 million.

Both can go in that direction at the same time.

  ·  5 days ago 

Thank you for this!

  ·  5 days ago 

Красиво!

I thought that would be the case when you converted your STEEM to SBD at a price of $0.3. This was expensive at the time and probably the reason for th eloss.

I suspect there'll be scenarios where it's worthwhile but the potentially marginal gain is possibly not worth it.