Relax! It is not a big deal. We have been through this before. I have been following SBD for a long time. I even wrote many things about it after it started breaking its peg and reached an all time high of $19.02 (exact numbers from CoingGecko). STEEM Backed Dollar does not mean it is worth a dollar. SBD is backed by $1 worth cryptocurrency (paid in STEEM) under specific market conditions. There is the ability to get make profit through arbitrage when SBD is under $1 which push the price of SBD towards that $1 Price Floor.

I was very happy to reap the benefits of having some SBD in my wallet and having it worth a lot more than I expected it to. Although it is great to have a cryptocurrency investment that has a Price Floor maintained through clever tokenomics, the price volatility does not make it ideal for those who are looking for stability amidst the volatile cryptocurrency markets.

HBD "Fixes" This

It is up to you to decide if this is a "fix" that was needed or not. What is definitely clear is that HBD does have fairly good (yet imperfect) price stability. When a business need to accept payments without having to deal with speculations, HBD could be an excellent way to accept payments.

Above statistics can be tracked here thanks to the valuable work of @ausbitbank (who is a HIVE witness). I have not seen an active tool that does this for SBD. I will take the manual route for this.

SBD Suplly vs STEEM Marketcap

Ignore the marketcap of SBD. The market can decide that and it is not very important here. STEEM is backing up each SBD upto $1. Once the marketcap of STEEM falls below a certain level, no new SBD will be printed and eventually there won't be enough STEEM available to pay for the SBD holders if they wish to convert their funds to SBD.

Only 10% of STEEM marketcap will be used to back SBD. If there is not enough to go by; there won't be need to panic such as the recent fiasco Terra conversions of UST "stable" coin. If 10% of STEEM marketcap can back 90% of SBD in circulation; everyone who convert will get $0.90 worth STEEM instead of $1. You can panic about STEEM marketcap falling further. What you won't have to worry about is a death spiral like LUNA and UST.

Getting Liquid STEEM Payouts

Despite having much lower daily trading volume, HIVE still has a larger marketcap and I was not following these numbers very closely. Today I claimed some rewards on STEEM and saw liquid STEEM in my payout. This is what prompted me to start writing. Although we have been around these stages before, the conditions have changed now. Most of the community and developers migrated to HIVE and BLURT. There is very little going on with STEEM from what I can see.

This is no surprise when some rich kid try to buy his way into a decentralized community and devolve it into something resembling a Web 2 platform. This article is not meant to be FUD. There is nothing I can do to STEEM that is going to be worse than the reputation nightmare caused by Justin Sun. For the time being it is still better than Facebook. As long as I have STEEM Power, I can post my content for the world to see on blockchain. There are those like @penguinpablo who have been censored from Steemit front end. Until that happens to me, I plan to be posting there.

Trading is Not HODLing

My goal here is to provide you with information that will help you to make better decisions. What you do with it is your business. If there is gains to be had in a free market without violating the non-aggression principle, why not make some bets.

Happy Trading!

Posted Using LeoFinance ^Beta