SBD Conversion

in #steem • 6 years ago

I am back

I had a job to do in the countryside.
I had flaky Internet and generally little time to follow Steem or even vote.
After being away for a while, I find it hard to get into writing again.

SBD Peg

There are a few ways to stabilize 1 SBD around 1 USD.
Witnesses can passively influence the supply according to the demand.

  • SBD are only created through Posting Rewards.

If the price is too high, witnesses can change a parameter that will cause more SBD to be distributed via Posting Rewards (bias).

  • SBD can be burned @null and be converted.

If the price is too low, some SBD need to be taken off the market.
SBD can always be burned @null to promote a post - few people do that.
The main function to 'burn' the SBD is the 'conversion function' in the STEEM wallet. ( On Steemit.com, it is deactivated. )
If you choose to convert, your SBD will be changed for the average STEEM price over the next week - in USD;
For 1 SBD you will get 1 USD worth of STEEM.

Since the SBD has been below 1$ for a while, I kept wondering, why I do not read much about SBD conversion ...


https://steemd.com/tx/bbf059a32988c4bd1be372b03b9bb46d5c414184

.... so I tried it out and will report back in a week.

( STEEM price at the moment: ~$0.9 USD )

Why is this not more popular ?
Am I missing something ?

Should I run a script to see, who even uses SBD conversion these days ?
Go through the chain history and make some nice graphics ?

#conversion #sbd #peg
6 years ago in #steem by
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    • [-]
     6 years ago 

    This could well make up a decent contribution to utopian-io?

    Is it possible to put together historic graphs showing when it was profitable and unprofitable to convert, and the amount converted at these times?

    Welcome back to the Steem, I don't think you missed much :)

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    [-]
     6 years ago 

    I would need historic data from coinmarketcap or somewhere to compare it to.
    Then, it should be possible to calculate the profitabilities ...

    It would take me a while ...

    Could be a nice exercise ...

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    [-]
     6 years ago 

    I support this research! Please do :)

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    [-]
     6 years ago 

    I think it would be very helpful if you could create a real-time conversion and profitability calculator. I think most users would find that kind of tool to be extremely useful and valuable.

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      [-]
       6 years ago 

      If you choose to convert, your SBD will be changed for the average STEEM price over the next week - in USD;

      It’s actually only 3.5 days.

      Why is this not more popular ?

      Couple reasons:

      1. The conversion function was removed from the Steemit.com website, which is the most used interface.

      2. When the debt limit was/is reached, SBD conversions no longer guarantee $1 of STEEM.

      I would like to see more burning happening for both SBDs and STEEM. I’m going to incorporate that into each of my projects and business ventures coming online soon.

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      [-]
       6 years ago (edited)

      I am running conversion/buy SBD cycles for quite some time now with my secondary acc (@doctor-cog-diss). As you might be able to see, I started off with ~150 STEEM, and I have converted them to ~500 STEEM in 4 months ot so. Not bad.

      Anyhow, you are not getting 10%. The "internal medium price" for STEEM, that you can see when accessing @steemchiller's Steemworld tool (where you can also convert, btw.), and which is used by the chain to calculate the conversions, is much higher than the actual STEEM price. Apperantly, it takes into account the SBD debt in some way.

      Anyhow, I get ~2-3% gain on average per conversion. Which is not bad at all. I will report this whole story by post one day.

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      [-]
       6 years ago 
      price min_price( asset( 9 * gpo.current_sbd_supply.amount, SBD_SYMBOL ), gpo.current_supply );

if( min_price > fho.current_median_history )
   fho.current_median_history = min_price;

      So ... the median just gets overwritten ...

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      [-]
       6 years ago 

      I don't code, so I don't know what this means. What I know is: Even when the price was below 30 Cents for weeks, the median was still at 35 Cents. Thus, SBD at 80 Cents did not mean 20% gain per conversion, but you had to calculate: real price / median price = something like 0.82. With SBD at 80, your conversion gain was 2 Cents. And I read somewhere that this was because of SBDs were taken into account for median price calculation.

      Can you follow or am I speaking in riddles?

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        [-]
         6 years ago 

        The lines above explain, why and how the median price taken into account to calculate the conversion, differs from the actual median price.

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        [-]
         6 years ago 

        Conversion takes 3.5 days. You don't know the exchange rate at the beginning of the conversion process. If your process would always work, you had invented the perpetuum mobile.
        But if you had very much money, you could corner the SBD because of its limited production as follows: Buy a huge amount of SBD, put 20% aside and continue converting the rest in repetition. Thus you will diminish the amount of existing SBD.

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        [-]
         6 years ago (edited)

        Of course.
        But as said, this is not the only factor. The conversion rate does not always follow the actual STEEM/SBD median price.

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          [-]
           6 years ago 

          I left out the SBD Marketcap / STEEM Marketcap cutoff, since I was not sure how that exactly worked ...

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            [-]
             6 years ago 

            I'm not sure how it works as well, but it's important to know it before hitting the convert button. Sometimes it makes conversions a loss even tough SBD is at 80 Cent.

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              [-]
               6 years ago 

              Median price ( feed price ) is a value you can just request from the blockchain.
              I was looking for it in the code, but do not see where a debt ratio would be taken into account and somehow mixed to the median price ...

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                [-]
                 6 years ago 

                @lostmine27 made an analysis of the conversion feature a couple of days ago. It's actually not that rare and the overall SBD volume has been reduced significantly over last couple of months. However, the conversion process is indeed dominated by a few big accounts. Current conversions are also available here: https://steemdb.com/labs/conversions

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                [-]
                 6 years ago 

                Good to have you back! :)

                I guess people think that 10ct plus through conversion isnt enough..

                I also already got way more.. But have no sbd since that.. :]

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                [-]
                 6 years ago 

                Use the generated STEEM to buy SBD off the internal market and repeat ?

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                  [-]
                   6 years ago 

                  People were doing that en Masse and now it's not that profitable anymore..

                  And we have less debt, I guess :)

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                    [-]
                     6 years ago 

                    Great to have your thinking back for a better steem.

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                    [-]
                     6 years ago 

                    I did SBD conversion via steemworld once. After that, my SBD were used up and no new ones we printed. So there was no need for taking.
                    Now that author rewards can gain steem dollars again, conversion will be attractive. You chose the right time for mentioning it.

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                    [-]
                     6 years ago 

                    SBD can always be burned @null to promote a post - few people do that.

                    I'm sure almost nobody does, I use the convert function in Steemworld to remove SBD from the market though.

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                    [-]
                     6 years ago (edited)

                    I did this via steemworld with a few dozen sbd a while back thinking I'd get a 10% bonus.

                    However because of market fluctuations (I think?) I actually lost money. Only a few cents.

                    At least it's a few more burned SBDs!

                    Have you been building things in the country? I seem to remember you talking about doing that at sf3

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                    [-]
                     6 years ago 

                    SBD is paramount for the success of steem

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