I see you point there, it would eventually settle towards the peg in the longer term.
One concern I would have is that the steem price would also settle towards parity with SBD as the only thing Steem does that SBD can't do is power up an gain curation rewards. Is that enough to make Steem worth $100 when SBD is pegged to $1. It makes Steem very expensive for what it does, and if 1Steem = 15 or 20 or 30 SBD, it would be way less enticing for people to buy it and power it up.
It seems right now that Steem is following SBD wherever is goes, and settles where SBD settles or within a small amount of dollars and cents. I did that at the last SBD spike in June 2017, and looks to be doing the same now.
This is so confusing to me. The value of a cryptocurrency is determined by many different things including market cap and network effect. It's irrational to say "I'd buy X at $10 but wouldn't buy at $100" if it has a future value of $1,000 (as a random example). If people value the stability of SBD, then they will buy it or create more of it (through buying STEEM and converting) which increases the market cap of SBD. The captured value is still there in STEEM and SBD, regardless of the price.
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But we don't know the future value of STEEM. All the price movements of STEEM seem to have been triggered by a movement in SBD price. As SBD rises so STEEM follows. As it falls, so does STEEM fall. The two seem to be joined by some sort of elastic band, with SBD being the leader.
With a $1 SBD peg, and a high STEEM price, people may be inclined to spend their SBD rewards on other things (or hold it) until STEEM comes back down to meet SBD like it always has.
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I'm beginning to believe in a two-way conversion the more I think about it.. It may work, but the implementation and timing is tricky. I'd love to know what you think about my idea on how to phase the peg in back to 1USD over a finite period of time...
If you have a spare 5 mins.
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