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RE: Lower debt ratio with conversion of SBD?
What are the reasons that feature being removed from the official Steemit wallet frontend? https://steemitwallet.com/ Or it wasn't available there at all? Trying to think logically if a feature is good for the platform, it would've been made available to all the "ordinary" users?
It used to be an option. I don't know exactly why it was taken away, but my assumption is that it was because at the prices Steem and SBDs have been trading at over the past few years using a convert operation would be a money-losing thing to do. Now that conditions are changing slightly that might not be the case, but some formulas are involved so people who don't understand them should probably still be cautious about using this feature of the chain.
This is my understanding, too. Many people were confusing the "convert" option with market exchanges, and they were accidentally destroying value by converting at $1 when they could have traded at much higher values. I believe Steemit took the convert option away in order to protect against that sort of mistake.
I agree. This should probably be considered an "advanced" capability. 😉 Given that it uses a median value over the upcoming 31/2 days, it is inherently unpredictable.
Thinking more of it, "convert" has a bit of a gambling side, as, for instance, let's assume STEEM price goes down for 4 consecutive days and then the median price will be higher than the current value. The conversion would result is less STEEM per 1 SBD if compared to a spot trading at that same moment.
However, I have to admit I don't have any slightest idea how the witnesses define STEEM price :)
I'm also not sure, but I think most of them use a script, maintained by @moecki and/or @justyy that updates once an hour with the average price on some set of exchanges.
Yeah, I think this was the idea behind it. You can't arbitrage the price changes if you don't know whether they'll go up or down during the upcoming 3 1/2 days.
The only time that profit is more or less guaranteed is when the price of SBDs goes far enough below a dollar but the STEEM price stays above the haircut threshold. In that case, the guaranteed profit is the mechanism that's intended to drive the SBD price back to $1.
Yes, that's roughly how it works. Everyone adjusts the interval to their own taste. The choice of exchanges is the responsibility of the witness.
I don't need to mention that a single witness doesn't define the feed price, of course, but that the median is formed.
Main (top 20) witnesses weight in more than the backup ones or it's just average?
I suppose having more witnesses spread globally would be better with regards to this value as well, as some exchanges aren't available for some countries and this could eventually distort the median price?
The prices of the witnesses from the current round are used. There are 21 witnesses in each round, of which 20 are the TOP witnesses and 1 alternate witness in each round. If you like, the TOP witnesses have more weight because they are on more often. Otherwise, however, the prizes from each round are treated equally.
The witnesses determine the prices from various exchanges. I myself currently use four or five exchanges. In this respect, the price is already averaged worldwide. As you can see here, most prices don't vary that much.
Thank you, that makes sense.
Moreover, there are auto-trading services that track the prices among the exchanges and if there is a big difference they transfer funds and use the difference to gain some profit, so that all is like interconnected vessels in physics :) So querying all the possible exchanges would more or less be too much.
I found the steem price feed python script on github
The values in red on the steemworld witness page are those that fall outside some preset deviation, I suppose.
The red entries are outdated. But I don't know the detailed timeframe, when it is considered as outdated.
I am almost certain the feature was there back in 2018 ;) Also, I think there was a warning, something like "use Convert only if SBD < $1.00"
I see "Convert" just as a tool. Some loose their life savings over night by margin trading and still, it is out there, available to everyone.
The more features, the more people would be interested to join/stay. Imagine if any of the biggest crypto exchanges decides to have spot trading only and strip away all other methods of trading. Many will move right away to the competitors I guess. ;)