Steemit paid $50k USD to @blocktrades for the development of the SteemDAO. Once approved, and after enough time has transpired so as to demonstrate the security and stability of the system (about 1-2 weeks of operation), Steemit will provide initial, one-time funding, by converting 200k STEEM to SBD which will allow the market to test this new feature.

And if the security and stability fail what will happen then? Will the SBD be reconverted to Steem, or just thrown away?

At the request of the Witnesses, we have included code in this release that would add a long term funding mechanism for the SteemDAO/SPS. If this hardfork is accepted by the Witnesses, 10% of overall inflation (pulled from the rewards pool) would be used to fund proposals made through the SteemDAO/SPS.

And if the Security and stability do not pan out will this be immediately HardForked out or will the funds be diverted to something else?

This was why @blocktrades proposed adding the SPS/SteemDAO to Steem and why Steemit agreed to fund that development.

Steemit agreed, as has been pointed out over and over and over again when ever Steem and Steemit are bought up it is that they are different and not the same entity. Did Busy.org, partiko, eSteem, and the others agree to fund blocktrades? The witnesses protect the Blockchain Steem,that means all users of the blockchain, and all organizations on the blockchain come under their umbrella of protection. That includes busy.org, partiko, eSteem, and other forms and methods of accessing steem blockchain, not just steemit.

This is a lot in one post, so since it is an explanation post can you elaborate on what will happen to SPS if blocktrades is unable to provide the needed security and stability?