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RE: Symbiont{s} | ECOBURN | SBD Price Regulation Experiment
I think you're looking at this the wrong way and/or trying to solve the wrong problem. The chain already has a mechanism for "fixing" the "the SBD price is too low" problem, it's the conversion mechanism. People can buy SBDs to convert them, this naturally causes the price to increase through the magic of distributed profit-seeking, there's no centralized mechanism required. This works fine as long as the price of SBDs doesn't get stuck above the haircut price. What the economy needs is not more people trying to drive up the price of SBDs, it's for SBDs to flow enough for the actual mechanisms to operate.
What you are proposing is technically correct.
The truth is that since March 24, 2016, the SBD peg has never been consistently maintained, despite numerous experimental initiatives aimed at stabilizing its value from going up and down, as the conversion features alone proved to insufficient due to several factors. We also agree on the necessity of moving away from centralized solutions. There have been clever suggestions involving the DAO, such as using multiple proposals labeled as "X" and "Y," which would trigger a "Z" actions once a certain return threshold is reached to regulate the price of SBD. This approach represents a more decentralized and autonomous system. Other solutions have been suggested as well, but they all ultimately point toward the need for changes to the blockchain itself. Implementing such changes would require forks.
Clearly, there are inherent flaws that have prevented SBD from fulfilling its intended role. A broader reason for this failure is that its development has been largely neglected in favor of more pressing priorities in the past. However, if the goal is to achieve an autonomous and self-sustaining process, meaningful work will eventually need to be done at the blockchain level. Aside from that, the only alternative that could have a tangible impact is to artificially influence the price to maintain a possible peg (and securing the process with multi sig) and actually have a median price that makes sense.
Thank you for passing by and sharing your thoughts, @danmaruschak.
Because there's no intrinsic mechanism on the top side I think you need to talk about "above" and "below" differently (especially because some people have believed that a price above $1 is good, and some manipulations may have been pursued with that philosophy in mind). How much time has it been below the haircut price?
Don't try to force the price up, if you want to do anything try to get it under the haircut price so the "thermostat" mechanism of conversions can work.
IMO, the decisionmakers let the perfect be the enemy of the good by demanding bots and multi-sig when the "use DAO SBDs to buy-and-burn Steem" idea was on the table. In the fiat economy teenagers are routinely trusted to handle hundreds of dollars of cash in retail establishments, an individual account (or several) could have done manual buy-and-burns with DAO funding (at least as a stopgap) and been monitored and have their funding cut off if they weren't doing the job.
Yes, some additional features would be nice, and the difficulty of getting a hardfork to happen are a big barrier to that. But I think the larger issue is mostly economic: by design SBD is a "smaller" coin than Steem, so it's more vulnerable to manipulation. When a nontrivial segment of the crypto ecosystem believes that manipulations, pump-and-dumps, etc., are what crypto coins are for then it's going to be hard to insulate SBDs from that. The real solution to maintain SBDs at around 1 USD would be to have them be involved in a goods-and-services economy with prices that treat SBDs as equivalent to USDs. Easier said than done, of course.
In the past? It is hard to say, as there is currently no straightforward way to extract and analyze historical data. Maybe we should start tracking such data, as having the tools to analyze economic patterns is an underexplored area by developers.
There were discussions in the past regarding the implementation of bidirectional conversion, but it was never implemented.
Several witnesses and stakeholders have expressed opposition to the idea of a buy-and-burn approach using the DAO, and we can understand their concerns. If the goal is to reduce the debt ratio by removing SBD from circulation, the most transparent way to do so based on DAO usage is to send the SBD directly to @null, or to convert it to STEEM. Then send the resulting STEEM to @null. @null. Both of which achieve the same outcome.
Buying STEEM, on the other hand, could artificially raise its price without actual demand, which introduces ethical concerns and fairness issues, especially for external holders. A similar situation occurred when SBD traded above 5 USD, raising discussions on how to communicate risks and expectations to individuals who entered the market at those elevated prices and were likely to incur significant losses. Some even believe that this is what caused the SBD to be delisted from UPBIT considering that some witnesses were vocal about it. But in truth, we will never know for sure.
Another proposed complementary solution that was never implemented is to modify the code so that the treasury fund is excluded from the inflation calculation. Only SBD actively circulating in the market would be considered, which could offer a more accurate representation of the real debt burden on the system.
PS: Both of the mentioned solutions that we did no implement are already implemented on a competing chain and are playing a role in maintaining their peg. A case study to check.