There is currently a discussion about the SBD between the witnesses. This post aims to get the community informed about both sides of the argument and to start a brouder discussion about it, as it affects all of us.
Some Background information
Steem post payout is done 50% in STEEM POWER (SP) and 50% in SBD. You can choose to get 100% SP but in the current market condition that is not recommended. That is because the SBD is designed to always be worth roughly $1 in STEEM. And at the moment one SBD is worth about $6. So when you write a post that displays $100 then you get:
• $50 worth of STEEM, say at $5 per STEEM means 10 STEEM
• 50 SBD worth $300
so your $100 became $350. That is a nice thing for you.
The more one STEEM is worth, the more SBD gets printed. So the general idea is that with more SBD being created, the SBD price slowly moves back to $1. And slowly means over the time of a few months. This is a good thing for posters, but it is a bad thing for services using SBD as what it was initially intended to be: A currency backed by STEEM that is worth one USD.
A shop accepting SBD can price their items in SBD instead of USD and has the security of knowing that the price will not halve over the few days that shipping takes. A credit card company could let you store SBD on the card and convert them 1:1 to USD without any risk. And you could use SBD as a save deposit of value that does not fluctuate like crypto does. All without converting to fiat and all the nightmare associated with that.
So this discussion is about what we as the steem community want. A volatile SBD with high posting rewards, or a stable, pegged SBD with normal posting rewards. There are pros and cons to this and I will try to cater both sides of the argument. A personally am pro peg, if you want a con side, check out @aggroed.
What do you want to implement?
There is a one way conversion on the SBD. You can always convert one SBD into $1 worth of STEEM. So if STEEM is worth $5 then one SBD can be converted into 0.2 STEEM (over 3.5 days), regardless if SBD is worth $0.01 or $100.
The proposal would be to add a second conversion, so $1 worth of STEEM can be converted into one SBD. So if STEEM is at $5, you can convert one STEEM into 5 SBD, regardless of SBD price.
We would add a small spread to it, so thet you can convert to $0.99 and $1.01, to prevent abuse through conversion. So through this measure, SBD will stay around $1 with up to 2% of difference.
Implementing this will take time. Sheduling a fork will take two weeks. And before that, we have to implement it and test it. So my personal guess is at least one month till we can do it. Maybe till then SBD is down from $6 already, maybe it is at $15 then.
If SBD is at a high price when we 'flip the switch' then that could lead to the price crashing and to a panic. But if the change is announced beforehand, maybe that will not happen.
Here are all the arguments I could find pro and con this change. Please tell me if I missed your argument and I add it:
Pro:
- A safe store of value as a cryptocurrency
- A low risk crypto payment option for businesses, if SBD tracks USD, this
- Can allow market applications like ebay or etsy for steem without the platform risking the hit of price volatility
- Can allow a paypal for steem that normal businesses can adapt without those big fees middlemans take (as there is less risk and no fees)
- Can allow for a low risk credit card charged with SBD without having to sell them or convert them to USD
- Post payouts are now exactly as much as displayed
- Demand for STEEM could rise from users wanting to buy STEEM and convert to SBD when the SBD price is over $1
- People in countries with broken currencies could adopt SBD as a stable currency
Con:
- Post payouts could decrease 4 days after implementation (to 1/4 of what they are currently if SBD stays at $6)
- Currently author rewards are partially outsourced to SBD investors. The Steem community pays a higher share with low SBD.
- Platform growth could slow as post payouts decrease
- Demand for Steem could decrease as ability to print high SBD is removed
- User retention could drop as post rewards fall
- Steem doesn't have a market cap large enough to support as many SBD as there are USD and thus the stability implied is not guaranteed
Outlook
This post is intended to get feedback from the community and no changes are planned at this time.
Please discuss this in the comments, write posts on your opinion and check out the other witnesses and the posts they write:
- (I will add posts here if they are posted)
If you feel strong about this topic, adapting your witness votes can be a way to make your voice heard.
Since @aggroed added the con points, I will donate the liquid part of this post to MSP. This post is still flavored pro peg and I suggest you to read multiple posts on this matter.