I have been emphasizing that Steem Dollar(SBD) market is imbalanced (many sellers but few buyers), so that it is hard to keep the peg. The SBD price is $0.77 at this moment, and the situation can get worse.
However, if you are considering to sell your SBD, be advised that,
I am buying SBD at $0.95
(on Bittrex)
Here you can see up-candles from me. Between 10/29 and 11/1, I was waiting for my next round, FYI.
So don't panic-sell and wait at higher prices. I will go there soon. This surely is more risky than waiting at lower prices and can give me loss. But since I earned significant amount from Steem, I think I am responsible to do this, regardless of losses. I hope @smooth who is the biggest SBD converter (10 times more cycling fund than me) will join this and help pegging.
Please consider to vote for witness clayop
Since I am mentioned by name here I thought I would respond. My opinion is that effective SBD pegging requires more diligence on the part of witnesses to adjust and maintain the available parameters to support SBD having a market value near $1. I have commented on this in more detail in my recent witness post.
Buying aggressively in the market, as you are doing, can work to an extent, but won't be very effective on is own and largely has the effect of transferring value from one trader to another without addressing the underlying causes of the weak SBD price (though the conversion portion of your activities is addressing one of the underlying causes by reducing debt).
That said, I support your initiative in the sense that each witness should decide how best to use available funds. One reason we have multiple witnesses is so each can decide how best to use his or her own portion of the budget to provide maximum value to the platform and community.
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Your stance is totally reasonable. However, the problem is we are not convincing SBD sellers that they can sell at higher prices thanks to SBD converters (by scarifying STEEM price). While our witness payment is hundreds a week now, it was thousands a week few months ago and we made tens of thousands (only with witness income) from community's support. IMHO, this is the time to repay.
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There is nothing wrong with repaying. That's why I am running -$1200/week on my witness budget above what I'm actually receiving and around $-900/week over total (locked) witness rewards (that was last week, I have not done bookkeeping yet this week but I suspect there will be an even larger amount being covered by my own funds). I also expect to continue covering these deficits for quite some time as I have decided not to abruptly cut off worthy projects regardless of budget. We all just have to decide how best to allocate resources. As I said, I respect how you have decided to allocate resources, but I don't agree it is the best use of resources for me to adopt it.
As for convincing sellers of higher prices, that will happen naturally in the market as sellers are depleted (there is no SBD being produced at all currently, so eventually this must happen as SBD is being destroyed), they decide to hold instead, or more buyers are enticed to invest in SBD for an attractive yield. All of these are affected to some extent by witness parameters.
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Loss is always painful for all. But "repay" is based on what we received so far. While you currently earn $1000/week (I don't because I am not the top 19), we already withdrew much more dollars from witness payment when STEEM was really higher places. I understand your choice, but please keep in mind that if you earn a profit via SBD conversion, it comes from the expense of STEEM price and rewards, and as a witness, our goal is not to maximize our own profits but to contribute to Steem and increase its shareholder's benefits.
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I do not agree that earning a profit (or at least minimizing losses) from conversions comes from the expense of the STEEM price. In fact in some ways that is backwards. Trading efficiently/profitably means not overpricing SBD when buying it, but it also means not underpricing STEEM when selling it. That's really the best we can do other than not converting at all which leaves the SBD oversupply unaddressed (or burning it, which I'm certainly not volunteering to do, but you are welcome to do so if you like, or maybe other witnesses with available budget).
As far as "repay" not only have all my witness power downs been spent on Steem projects and initiatives (and then some, since I am personally covering losses and plan to continue doing so for some time), I personally covered promotional and development expenses prior to the witness payments becoming significant. Nor does this account for my time or server costs (all paid out of pocket). If the STEEM price trend recovers, then perhaps someday I may be repaid by my witness business for what I have advanced, but otherwise I likely will not. This of course is all my choice, and I am very comfortable with how and how much I have contributed to the Steem community.
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You might misunderstand my statement "expense of STEEM price". SBD converters sold over 350,000 STEEM last week(roughly $7,000/day), and they, including me, have a wide buffer by the feed discount that can cover 20% of STEEM price decrease per week in addition to a cheap SBD price. The main purpose of SBD discount is to compensate buyers who take risks of buying SBD at close to $1.
You are the very influential person in Steemit. If you hesitate to take some risks with SBD pegging, the community may feel dis-encouraged. Also, as a witness, while you are arguing price feed discount but you stay in a passive position at under $0.80, it would be counteractive.
This week I made about 10% from SBD conversion at my buying price is around $0.81 (because I cannot break through low sell orders). I think you can make a break-even at $0.9 or around.
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[Replying from below due to nesting]
I've not been passive. In addition to posting my view that a higher interest rate is appropriate under these conditions, I've continued to do some purchases and conversions (currently 16840.711 in progress, along with some more SBD I haven't started converting yet), as I did some (though fewer) at 95-96 even while believing and stating this was likely unprofitable (which turned out to be the case). However, in my estimation the risk of the trade has increased considerably due to the relative proximity of the 10% debt limit and the possibility of the blockchain imposing a higher price on conversions regardless of the feed (along with some other factors). This calls for prudently risking less capital (not none) and doing so preferably at somewhat lower (not arbitrarily lower) prices. Still, that does not mean I have completely withdrawn from the market; I continue to believe that retiring SBD debt is important so I do participate even when it seems quite risky or unprofitable (though if others are already retiring debt at a reasonable pace, I may consider that sufficient; in fact I agree with what you have stated about not retiring debt too quickly, so at times it may be better for some of us to step back).
It is always impossible to know what realized profit or loss is going to be on the trade until it completes a week later, and even then it is impossible to know what risks were present and reasonably priced into the trade but fortunately did not occur. You have your estimates of profitability and risks and I have mine. The two don't necessarily agree; that's why markets exist.
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You might buy at 0.95-97 when the market price was around there. Based on my observation, you are not using fixed rate, but bidding on little lower than ticker prices, and this is what I meant passive.
I am glad to see @riverhead bought up SBD to $0.87 few hours ago. (Bravo man) This is what I want to do and see from witnesses.
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[Replying from below due to nesting]
First of all I do not bid lower than ticker prices necessarily; sometimes I bid above them. I bid as high as I deem necessary to accomplish the task most efficiently. I don't consider paying higher to be useful; you are probably buying coins from traders (mostly bots) which buy them lower and then resell them to you at a higher price. This enriches them and depletes your own capital. If you think your capital is being used to help the system broadly (and I seriously doubt the same could be said for profiteering exchange bots), then this is could end up being harmful overall (or less helpful).
But as I said, everyone should allocate resources as they see adding the most value. If this is how you and riverhead wish to participate in the markets, and feel it is helpful, then I respect that. Overall engaging in debt reduction at this point is helpful, however it is done.
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Yes doing or not is totally your choice. But as I said, we should recognize that this safer trading opportunity comes from the community (by discounting feed, which in turn can increase sell pressures on STEEM). One can ask us that, "What did you guys do when Steem Dollar went down from 0.95 to 0.80?". I can show him my trading records with placing orders at 0.95. But showing a buying records at 0.80 or round may make less sense for him.
You can make a little profit that compensate your efforts. You can avoid exploitation from other traders. And you can slow down SBD price decrease. But your current position cannot help an increase of SBD price towards the peg, IMHO.
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[replying to below comment due to nesting limit]
You can show what you tried to do, but the question I always used to evaluate actions taken toward some goal is, did it work? In this case my answer would be no. Five minutes after your orders, the price was back down to 80 cents. What is needed is sustained and persistent effort to address the problems, along with policy changes that make a difference to the underlying economics (and I would argue a code change to move the soft debt limit lower). Donating to the profit of bots operators on the exchange by trading inefficiently does very little to help. I suggest you would do more good by conserving and growing your capital, allowing you to make a bigger difference over time, but it is entirely up to you.
Finally, discounting the feed itself makes relatively little difference to sell pressure (only a modest increase in the amount of Steem being sold). For example, you previously cited a statistic of 350000 STEEM being created by conversions. Without the (currently about 10%) feed discount that would still be 315000. The reason the feed discount is helpful is that it encourages people to perform conversions, reducing outstanding debt. This is likewise the case for a lower SBD price. If you push up the price too much before the other problems are addressed as well, it can be counterproductive. All of these problems need to solved together.
Yes, we all want to help improve the situation, but I want to do so in a manner that is sensible and effective longer term. Merely showing trading records of orders at 95 or showing pictures of green candles at a high priec for an instant on a chart, without actually addressing the underlying imbalances is not a sensible or effective way to solve the problems in my opinion. Still, I support and encourage your contribution to the debt reduction effort, I just think it isn't quite as helpful as it could be if done smarter.
I completely disagree on this point. My consistent, well-considered, methodical and sustained efforts won't move the price dramatically toward the peg in an instant with a pretty green candle, but they will ultimately fix the peg in a sustainable manner over time, resulting in a price that is consistently (hopefully permanently) very close to $1 . These problems weren't created overnight, they were created by both witnesses (including both you and me) and devs failing to address the issue for months while the peg was failing and debt was accumulating. We should have done more, including better scrutinizing the SBD stability patch which wasn't (and isn't) sufficient to address the underlying problems. To fix the now-severe problems requires more nuance and strategy (and time) than a few inefficient market buys.
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Yes I can show them what I tried to in the market as well as here to purshade to join this initiative. Well, the community will evaluate in the future.
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@clayop sorry to post here, just urgent I hope you understand me. Thank you.
@smooth left you a reminder message on steemit chat, please check. Thank you
EDIT : @smooth THANK YOU for taking care of it.
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[replying here due to nesting limit below]
I certainly support that you are active and working toward a solution. Even that is a huge improvement over past months when witnesses ignored the situation altogether (including myself). With mutual respect I think we can agree to disagree on the details of specific methods while agreeing on the goals to be achieved and applauding that at least some efforts are being put forward now.
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thank you and we need more witness that cares about the platform's long term interest! you have my vote long time ago.
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Thanks for caring about the platform clayop. I voted for you for witness.
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THIS IS SO CALLED "CONTRIBUTION" THAT WE NEED. Unlike confidently stated in the White Paper, Steem Dollar has been not pegging $0.99~$1.01 for a while. This is one of the most important features and the critical promise. If early whales got some easy money and still genuinely want to support the community growth rather than "move on", they have to think about Steem Dollar market pegging seriously. Well deserve upvote and witness vote.
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clayop thank you for sharing your efforts to help maintain the sbd peg
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Good to know! Thanks for updating us! Ive been focusing on powering up.
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I agree.
I followed you.
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Thank you for taking the initiative @clayop.
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Great move, man. You are the best!
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I agree with you
even if you can get back to normal steam prices
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We should definitely thank you for that! :)
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ReSteemed!
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Hey @clayop - I am buying and HODLing SBD too!!! Ppl interested in a witness or supporter who will help HODL the value, I am there.
@witness:
Agree!!! If ppl don't see this hold value, I can't use it for shoppers. This promise must be honored and if a witness isn't on board, they should be yanked for good.
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Hi @clayop
Please allow @steemitfaucet to be link with your posts?
About:
SteemitFaucet was built in order to help people get to know Steem It better and earn small amounts of Steem . You can try out, play around with and familiarize yourself with Steem.
You will come across a blog that will offer a reward just to resteem it. By just clicking the resteem button you will receive a reward, why not.
EX: Resteem and receive 0.07 STEEM #1
Upvoted, Followed! Excellent post!
Thank you very much!
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I have just upvoted you as a witness. You can say thanks for nothing because that's about what I have. :)
A reliable peg and the interest rate is supposed to attract people to hold SBD. On the other hand, interest creates more dollars which should reduce the unit value per dollar long term. Nubits was something I thought was a complete failure of a pegged currency to the USD has recovered its peg. Maybe SBD needs a scheme like "parking" as there is in nubits.
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Forgive my ignorance because I was always using Steemit internal market for conversion. Is there a good guide for noobs using Bittrex for SBD conversion?
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Now this is how you support a project you believe in!
If the founders and more investors did anything even close to this people might have a lot more confidence in steem's future.
The fact that they did not use any of their massive profit to keep SDB closer to 1.00 from the start is incredibly shortsighted. This is one of the main reasons people I've spoken to won't bother with steem, they brush it off because the "dollar peg" is nowhere near a dollar or stable. If that is broken, they wonder what else is not working as advertised.
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Great power comes great responsibility. I agree.
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