SBD Burning Competition
I did this not too long ago when the debt load was at 7% and a lot of people were quite concerned. Now we're sitting at 2.6% and most people probably think we're doing just fine... and we are.
We're also at a point where we should be proactive and begin reining in some of our recent excesses. Complacency was one of the causes of the debt crisis we so recently experienced. We shouldn't wait until we're forced into action this time... let's start the burn!
Why is now the time to burn SBD?
During the recent spike in the STEEM price, the blockchain has been producing SBD for author rewards. The current price is lower than it was during much of the past two weeks. The SBD produced during the recent highs now represent a larger amount of STEEM than they did when printed.
Using the [Edit: 3.5 day] median average for the main price feed means that the blockchain will lag the market by a few days. As a consequence, SBD production is slow to respond to changing market conditions. As it catches up, SBD production will slow and potentially stop. It's far from certain that this will happen quick enough to avoid debt trouble, though.
We should be anticipating an increase in the debt load, and in fact one is starting to emerge. As the median price falls to catch up with the market's current observed prices, the debt load will continue to increase and we will find ourselves in dangerous territory once again.
Markets are hard to predict, and forecasting is always challenging and controversial. So it is best not to rely solely on divination when making economic decisions. But it wouldn't be unreasonable to expect near term price declines, which would put a strain on SBD and STEEM as it relates to the debt load.
We should get out in front of it now, by burning some SBD at a measured pace through converting and promoting posts.
Anybody can throw the cli_wallet command and the right syntax to promote a post?
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I believe it is the standard transfer command. Send some amount of SBD to @null with the post as a memo...
In this case, I think it would be something like this:
transfer liondani "null" "0.001 SBD" "@bacchist/burn-em-if-you-got-em-debt-reduction-competition-round-2" trueDownvoting a post can decrease pending rewards and make it less visible. Common reasons:
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Actually like @pfunk suggested on steemit chat it worked when I quoted null ;)
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I ninja edited it to add the quotes. ;)
Thanks for playing!
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Hasn't the price feed changed from 7 days to a 3.5-day period?
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You're correct. Thanks for pointing that out.
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Promoted with 5 SBD.
https://steemd.com/tx/96dddc543cf554b6999042f3bbd44f02a96aad6f
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I like to tip people in SBD. Is that considered burning? Also, I promoted this post with 30 SBD.
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I'd say that's spending.. and a great idea!
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You mean we should start to buy Steem with our SBDs?
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Not exactly. We should convert SBD to STEEM (you can do this from your wallet). And burn it by promoting posts.
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A bit like.... gathering all my Euros and burning it in the chimney during winter, not so much for maintaing me warm, but for propping up the Eurozone? :)
Just kidding, i see your point! But wonder how many people are ready for it.
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You're right. But I'm not kidding.
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If we're worried about the debt load (amount of SBD), why are witnesses setting the SBD interest rate around 10%? Wouldn't we want to lower the interest rate, thus reducing the incentive to hold SBD?
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Because that is the default in the code. https://en.wikipedia.org/wiki/Anchoring
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Have the feed biases been dropped too quickly after the mini-bull run? A few witnesses still have it, but the median is now zero.
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I was not and am not in favor of zero, though I do agree that it should have decreased significantly due to the reduction of the conversion time from 7 days to 3 1/2 days. The interest rate and discount are interrelated. Since the interest rate is too high, this reduces selling pressure on SBD and leaves less need for a feed discount to support the SBD price. The end result SBD price being okay (close to 1 USD), but less or no incentive to convert.
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