I've noticed that it's movements are kinda correlated with bitcoin's movements. If it keeps this correlation, a very large and fast drop in bitcoin's value could mean a fast drop in sdb value, which could damage the peg, and harmfully affect the ecosystem.
Of course, this analysis could be inaccurate, as steem's price and the entire crypto currency market's market cap are also correlated in the same way, so it might be connected to other price movements. But it still raises the same fear, could a sharp drop in another currency cause a sharp drop in SBD value, damaging the peg, and thus the site as a whole?
What could be done to mitigate such connections in the future?
Are you talking in terms of USD value or BTC value? Its price in BTC is meant to inversely correlate with BTC's USD value.
The SBD is a token that can be converted (with a 3.5 day delay) to roughly $1 worth of STEEM. It is this guarantee floor that keeps SBD pegged from below. The theory of pegging from above comes from emission of SBD. If over time it's observed that the pegging pressure from above is inadequate, then we can address that with a limited STEEM->SBD conversion option.
But for now, because of the botched reward pool migration in HF17/18 happening concurrently with irregular market conditions, the recent experience with SBD price isn't enough to say "let's kill SBD." We're on track to it normalizing.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
I meant it's movements, with respect to the dollar, correlate proportionally with bitcoin's movements with respect to the dollar. As bitcoin rose, SBD lost it's peg and rose above the dollar. Then, as bitcoin traced back, SBD started falling back towards it's expected value.
I guess the peg from below is a lot stronger than the peg from above, that does make me feel better about it.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit