RE: Thoughts on a Proposal to Buy and Burn STEEM using the DAO
Sorry to bother you again. I am not against your proposal, but since we are already exchanging ideas here, I wanted to say something. The economy is a very complex thing, which is influenced by many factors. Often, actions with even the best intentions can cause harm. As I already wrote, I am afraid that the sale of SBD followed by the purchase of STEEM will not be able to bring the expected benefit. With your bot building capabilities, I would consider another option.
From an economic point of view, the ideal would be for someone to buy STEEM on the market and burn it. But no one wants to burn their own money. Maybe you should think about starting a grid bot (or DCA bot):
I am sure you are well aware of the functionality of these tools. After receiving funding from the DAO in SBD, you could run a bot that would trade the SBD/USDT pair. The resulting income could be used to buy and burn STEEM.
The advantages of this method are obvious:
- the bot buys back SBD at a lower price, preventing it from falling too much;
- for the received income, the bot will be able to be irrevocably bought from the STEEM market and burned;
- bot can work forever;
- the presence of such a bot should be advertised and then investors will like the idea of investing in a coin that is constantly bought on the market and burned;
- potentially we could get both STEEM and SBD price going up.
I am not following exactly what you are saying here... If a proposal was created for SBDs that were then sold for USDT (instead of sold for STEEM on the internal market), the end result would be the same as our proposal of sell pressure being put on SBDs no?!
The grid bot operation mechanism is shown in the animated picture:
In this way, the bot not only sells, but also buys back at a lower price. That is, it many times buys at a lower price and sells at a higher price, thus generating profit. The profit generated can be used to buy STEEM and burn it further.