RE: Law of Supply and Demand Definition and Explanation OR Why the @sbdpotato experiment just won't work
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Scrap sbd, its a great idea but it wont make it as a stable coin
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Because it was never supposed to be a stable coin.
Think of it as a currency in a country named STEEM.
This country have it's own currency, and as any other currency, it have a value related to other countries currencies.
Of course it was intended to be a stablecoin. STEEM is the native currency of Steem. SBD is a stablecoin the purpose of which is to be stable enough to facilitate merchant adoption.
yes, stable, but not as a USD stable coin.
It's stability is related to STEEM, not USD.
Totally wrong.
SBD is pegged to the US dollar. When you convert one SBD, you get exactly 1 USD worth of STEEM (when the debt ratio is below 10%). That is the way in which its value is backed by STEEM. From the upside, the peg is supposed to work by increasing supply when the price of STEEM increases.
For now, I can't bring new arguments on this part of the discussion, because I still need to research a bit more about it.
All my above arguments are based on what I remember. I will go back to this point probably on the next article.