Did you mention the interest rate?
RE: How the Steem Dollar Peg Works
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How the Steem Dollar Peg Works
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@bacchist Wait, what? SBD pays interest directly? This is something I didn't know. Can you please link the source? I don't recall that being in the whitepaper anywhere and if I missed it then I have been making some really bad financial decisions (been converting SBD to bitUSD taking a slight loss).
I will upvote that information!
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@bacchist Wow I just re-read the paper and you're right. It's right there! Upvoted you, also just became your 100th follower. Thanks for that bit of information!
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It is in the whitepaper. Now itis monthly 1% and the interest paid in every 30 days. As I know the witnesses vote for the interest rate.
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It is certainly in the white paper. It is also in the white paper that the interest rate should be raised if the market is valuing SBD below $1 USD and the debt-to-ownership ratio isn't too high. And interest payments should be discontinued if the market is valuing SBD above $1 USD.
Unfortunately (in my opinion) the interest rate has not been responding to the market undervaluing SBD... I don't think it has ever changed from the 10% apr that it has always been. It's an important part of the peg that should be functioning and should also be promoted more than it currently is, so that it has an actual effect on the market rather than being some obscure thing as it currently is.
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Yes, I am curious about the interest rate as well as the price feeds and how that all operatess.
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No I didn't. Good point. :) Steem pays interest on SBD to encourage people to hold it rather than convert it to STEEM immediately. This is because the chain wants to avoid inflating STEEM for as long as possible, as conversions are paid out of inflation.
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