Haircut is around the corner unless STEEM price is above $0.245

in utopian-io •  5 years ago  (edited)

Repository

https://github.com/steemit/steem

Update: As forecasted, the haircut had started, and as you may see, SBD print rate is still 1% (maybe you remember this from the last haircut). This is due to a bug that I analyzed in details before: Why SBD print rate is still 1% despite the haircut? Bug report, explanation, and suggestions, and as far as I know, @timcliff fixed this (thanks!), and that fix will be merged in HF21.

How to know if we are experiencing a haircut? https://api.steemjs.com/get_feed_history If current_median_history does not show the quote of 1.000 STEEM you can assume that we're under the haircut. In this case: quote is steem supply, and base is the haircut sbd supply.

Introduction

SBD print rate decrease starts when debt ratio is highter than 9% and completely stops (no SBD) at debt ratio is 10%, and then the haircut begins.

What is the haircut?
The haircut is the situation where 1 SBD no longer worths $1 USD of STEEM. For instance, Splinterlands' cards are quoted in USD not SBD, so you need to use more SBD to buy the card with the same quote price.

About 8 months ago, we experienced the haircut, and the second haircut is just around the corner within 36 hours unless STEEM price quickly recovers above $0.245.

Note that the feed price is the median of 3.5 days.

Scope

Data: since 2019-07-01

  • Steem/SBD supply
  • Steem feed price
  • Steem conversion request

By analyzing the above data, I also provide some rough forecast when the haircut will begin.

Results

The feed price when the haircut begins without conversion effort

Current supply information can be fetched with API (dynamic_global_properties) or just visiting steemd.com

Here is the data as of 2019-07-17 UTC 1AM (approx)

Current supply and the feed price where the haircut starts

Based on the current STEEM/SBD supply,the haircut may begins at the feed price of $0.250.

However, when the situation is getting serious, normally conversion effort comes in.

Since the conversion (SBD->STEEM on chain and then SBD goes to null) reduces the supply of SBD, it also reduces the debt ratio.

Recent trend of conversion requests

The recent conversion requests since 2019-07-01

The above graph shows the conversion request amount since 2019-07-01.

As you can see, the conversion requests increased tremendously on 2019-07-14, which clearly shows the effort to prevent the haircut.

By whom?

Here it is.

  • blocktrades, alpha, smooth-a, fermion massively requested conversions. Thank you all!

Note that the conversion takes 3.5 days.

So, the effort on 2019-07-14 will help the situation on 2019-07-17. For simplicity, let's say it's 300K SBD (and STEEM/SBD supply increases due to other reasons except for conversion are negligible, which is okay based on my test). Taking this into account, the feed price where the haircut starts $0.241 which is slightly lower than $0.250 without any conversion.


The feed price where the haircut starts with 300K SBD conversion

Note: Initially, I didn't take the converted STEEM into account in the calculation. That is, the conversion not only decreases SBD supply (which I included) but also increases STEEM supply (which I didn't include). Considering it, the approximate feed price of the haircut start should be about 0.241 not 0.243. I'll not draw the plot again, since the only red line matters, so please just read the red line as 0.241. But the time when the haircut may occur is quite similar, just plus 1-2 hours.

When will the haircut begin?

Based on the previous data, we can forecast when the haircut will begin.

First, say STEEM price stays the same (~$0.224)

In the following graphs,

  • black line $0.250: price at which the haircut begins if there is no conversion.
  • red line $0.243 (but should be 0.241, as in the above note): price at which the haircut begins with 300K SBD conversion.

  • Due to the conversion effort, haircut may start within 33 hours, about 10 hours extended (without conversion).

Even if STEEM price increases around $0.240, still it's around within 34 hours.

  • The reason why there is no big difference is because the feed price is 3.5 day median and we have already been in the very low price for past a couple of days.



However, if STEEM price jumps above $0.245, the haircut may not happen.

So if you don't wanna the haircut, buy more STEEM or convert SBD on chain (not on exchanges).

Conclusion

Based on the recent history of feed price and conversion requests, we can forecast the haircut roughly. Since I already explained the details, I'd rather like to express my personal opinion why Steem is in this situation. (The previous haircut happened when the bitcoin price is 3~4K, and now the bitcoin price is still 9~10K) The rank of STEEM marketcap is continously falling. I believe the main reason is Proof-of-Brain isn't working. It's just dead. Very sad.

I personally believe that the only solution is ad-revenue + centralized curation. (See this: Why is ad-revenue sharing important? Steemit's marketcap is 0.215% of Facebook's ad revenue , which I wrote 3 weeks ago, and now steem marketcap is 0.15% of FB's ad-revenue.) Individual seeks their profit. What's wrong? That's the very basic assumption in economics. Nothing wrong if they do whatever they want to maximize their profit if it is allowed on the platform. That means, decentralized PoB is impossible from the beginning. It just looked possible only due to the crypto bubble.

Fortunately, Steemit Inc is getting some ad-revenue. When the ad-revenue surpasses all the costs, Steemit should make some efforts on some curation problem, including Utopian, of course. Moreover, the ad-revenue should be shared with authors.

Tools and Scripts

Relevant Links and Resources

Here are some of my utopian analysis articles

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

Thank you and hope to see your work too! Any idea about Utopian's future plan? Due to 50:50 and new delegation application, there should be some change.

  ·  5 years ago (edited)

.

The only thing i know is rc2 is released. probably steemit inc also doesn't know, since they're still testing rc2.

new delegation system will also be a big factor, since if utopian isn't an exception, the limit of delegation is 1mil SP. https://steemit.com/steemit/@steemitblog/announcing-steemit-s-new-delegation-application-process

I miss freedom :)

  ·  5 years ago (edited)

.

Thank you for your review, @crokkon! Keep up the good work!

What an explanation. I really hope steem goes up

Thanks!

I strongly agree with you. Ultimately, values are not created from nothing but from tangible things.

Sure, thanks for your comment.

I believe the main reason is Proof-of-Brain isn't working.

Pob was intentionally broken.
The accounts that broke it like things just fine the way they are.
Imo, they got their profits out some time ago and now, couldn't care less.

Who's to say?
50 years from now it may have proven to be the best strategy.

Money, for nothing.

Pob was intentionally broken.

Interesting point :)

Nobody is currently disputing it.
Steem's math wasn't designed for the ninjamine.
Those using the ninjamine against us know exactly what they are doing.
Not all of them are bothered by the morality of doing so.
Stinc's solutions to this point have made things worse.
This proposal just cements their desire to see steem as their personal piggy bank to be dispersed to their 'faves'.
Hardly any first year business majors could miss the hole in the logic of doing so.

Korean: 스팀 가격 적당히 오르지 않으면 헤어컷이 임박했다 그런 이야기.

이런 분석글 #steemleo 에서 대박치시겠는데요?

제가 잘못 이해하고 있는 건지는 몰라도 steemleo 보상보니 대세글이 200 LEO가 안됩니다. 150 수준이라쳐도 저자 1/2이면 75 LEO 10스팀도 안됩니다. 대박이란 표현이 가당키나 한가요?ㅎㅎ 100스팀도 시급이 안되는데. 애초에 스팀잇에 글을 보람으로 쓰는 거지 이제 그 보람도 줄어만 갑니다. 저도 남과 비교당하고 싶은 마음은 없으니 조만간 보상 민망한 수준으로 떨어지면 포스팅에 대해 고민해볼 것 같습니다.

  ·  5 years ago (edited)

네 그래도 LEO 토큰 시세를 저는 밝게 보아서
1 LEO = 1 스팀 이상을 기대하고 있습니다.

어제도 후오비코리아 직원분들 만났는데
전체적으로 크립토시장이 좋아보이지는 않더라고요 ㅠㅠ

이 글 리스팀 하고 갑니다.~^^

헤어컷이란 게 스팀 붕괴의 지표 같은 것인가 봅니다.

스팀 붕괴의 지표 재밌는 표현이네요^^

"스달 붕괴의 지표"에 좀 더 가깝습니다. 물론 스팀 가격이 하락했기 때문에 일어나는 현상이지요^^

헤어컷 & 컨버전이란? 24시간 이내에 헤어컷 시작되어 스팀달러 가치 하락 예정에 좀 더 자세히 설명해두었습니다.

I will buy some Steem from the exchange. Its like Christmas 2018 but in July.
However that graph tells me I should wait a couple days until after a haircut to buy more. Am I wrong?

Posted using Partiko Android

haha who knows when's the best time and price to buy :)

And people already know there will be a haircut, so that expectation should be already reflected. For instance, 1 SBD is already lower than $1.

Always is the best time to buy Steem =)

You are rightbabout people anticipating a haircut, but some are still hoping to avoid the unavoidable.

Posted using Partiko Android

Hey, @blockchainstudio!

Thanks for contributing on Utopian.
We’re already looking forward to your next contribution!

Get higher incentives and support Utopian.io!
Simply set @utopian.pay as a 5% (or higher) payout beneficiary on your contribution post (via SteemPlus or Steeditor).

Want to chat? Join us on Discord https://discord.gg/h52nFrV.

Vote for Utopian Witness!

Great post, but what has this to do with Splinterlands?

Hi @toocurious, thanks for your comment. First, it was included by mistake in the beginning, since I use my own program to post and tagging is always confusing these days. Second, maybe you don't know this, but scotbot uses the first tag set and modification doesn't work. So even if you included a tag by mistake, there is no way to take it back.

Finally, it's actually related to Splinterlands. As I've added, "For instance, Splinterlands' cards are quoted in USD not SBD, so you need to use more SBD to buy the card with the same quote price."

I appreciate if you could remove your downvote, but it's up to you.

Thanks for your reply, I just want to make people aware that we need to start using the right tags if we want these communities to thrive and since I am deeply involved in steemmonsters I started manual curation since a couple of days and it is incredible how many posts are tagged wrongly. I think if you are honest, you know your article is not about steemmonsters, even though you mention it in one sentence, it's about getting a haircut ;). It's is worth trending on Steemleo for sure, but not on splintertalk. Cheers. Downvote removed.

Thanks and I understand. and I think there should be a way to cancel some tag after the initial post.

ps. If you haven't tried, https://economicstudio.github.io/vp/?a=toocurious&t=SPT a tool I made.

"I personally believe that the only solution is 'ad-revenue + centralized curation.'"

Currently, there are malicious ads around steemit.com. That's the WORST passible thing. If this is your suggestion, go to medium.com or something similar.

Thanks but ad-quality is another problem that they need to solve. Ad is inevitable imho. Without ads, how can a certain coin price like steem be sustained in the long run? It was only able to be supported by ponzi scheme so far and crypto bubble.

Just because it is possible to write code to make anything possible to conceive does not make that code useful to society. There is a basic difference between profiteering and investment. Profiteering extracts the value created on Steem social media using stake-weighted VP, and this prevents that value increasing the price of Steem, preventing capital gains. Investors have always used their stake in an investment vehicle, such as Steem, to increase the value of the investment vehicle, and generate capital gains.

The two mechanisms both enable profit, but only the latter improves the business. If you don't care whether Steem social media are successful, then profit is profit. If you intend for Steem to improve it's business and grow in value, profiteering is bad, and capital gains are good.

It's a sad state of affairs to find that the established way the internet runs ie. ad revenue social media model will have to come to Steem. I really hoped that this could be something new but obviously we can;t have nice things.
But I'll tell you one thing, I haven't given up on Steem. It has died many times in the past and has arisen like Lazarus.

That means, decentralized PoB is impossible from the beginning. It just looked possible only due to the crypto bubble.

Oh yes! ...the haircut. I think I get it. I get it!! 😵

I meant to do that!! };)

themarkymark put a post out two days ago advising that the haircut was already happening.

hmm. what do you wanna say? I also made another post about it two days ago, of course which I could do much earlier. Most advanced users already know it's coming, nothing special to those people. but this is more careful analysis. the feed price has been changing according to the forecast.
it's much more like they lost interests in posting. PoB is dead. why spending precious time? Not many good posts these days. I'm also thinking of not posting regularly anymore.

don't know that I'd shoot for longform ... you could do a couple of 300-500 word posts nicely done for the same amount of time. IF people actually do real curation after HF21 they will be more likely to read the shorter posts than the longer ones. It's tough getting people to read long form unless they are totally into the topic.

Thanks but there are some people who post not for money but for fun. to me it's more about atmosphere & culture not about money.

well, being curator friendly is not necessarily about money.

How else are you going to get eyes on your content and some engagement?

That is one of the points that is emphasized at PYPT, leave nice comments even if you can't vote. Engagement is important.

!SHADE 5

sure thank you for your comments and interesting token :) there are so many new tokens these days.



Hi blockchainstudio the SHADE tokens are on the way.
Thanks for sharing SHADE
To view or Trade SHADE visit steem-engine.com

It's possible there are other reasons for posts than fun or profit. I find it useful to consider what is actually valuable to me, and society is vastly more valuable than mere money or fun.

I wonder if having ad revenue generated by the various scot front ends would also help bring in additional revenue that can be pumped into the ecosystem. Apart from people buying to power up, SM cards and ade revenue, I don't see many other income streams here

I think one major problem of steem is powerdown takes too long, so not many people buy it to power up anymore, and scot market size is still relatively small. I actually did some analysis on steem-engine, maybe i'll post it some day.

The Powerdown also artificially boosts Steem price as people wanting to sell do it in various times IMO

Sure, that's why Steemit Inc doesn't shorten it :) But in the long run, especially for people who experienced this kind of drop and haircut, they will not considering powerup seriously. So ironically, the haircut situation is a good time for a change. But of course, I don't expect that Steemit Inc would consider that :(