RE: How to make money with Steem and SBD

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How to make money with Steem and SBD

in steem •  5 years ago 

Thanks for that. My point was that outside of a couple of less reputable exchanges, SBD is in fact tracking a dollar pretty well. The price shown on coinmarketcap at least is not the real market price. Do you have a reference for your assertion though? I'd love to check that out.

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Which assertion do you mean? That the peg breaks (conversion at 1 USD per SBD no longer guaranteed) when the market cap of SBD goes above 10% of the market cap of STEEM? Or that this causes SBD to go below 1 USD?

The ratio of the market caps of SBD and STEEM is called the SBD Debt Ratio because SBD is actually a debt instrument that the system makes possible to redeem at a value of 1 USD. SBD stops being printed when the debt ratio goes above 10% and the printing slows down at 9%. That the conversion mechanism no longer guarantees 1 USD worth of STEEM for every SBD and that the printing of SBD stops at a Debt Ratio of 10% are fail-safe mechanism the purpose of which to protect the price of STEEM from cratering to extremely low levels owing to conversions.

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