How to Enforce the Steem Dollar Peg by Self Voting

demotruk(74)
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At present there appears to be a lot of capital speculating on the possibility that Steem Dollars will rise in value. There have been several posts predicting Steem Dollars will "go to the moon" despite the fact that it is supposed to be a pegged cryptocurrency, which always returns to about $1.

The Steem Dollar peg does not enforce itself. It only provides incentives for market participants to enforce it. It's therefore up to us to enforce the peg, and it is not wrong to profit in doing so, it's how the system was designed and it's spelled out in the white paper.

The Steem Dollar speculators are essentially donating a gift to Steem Power holders. For every dollar of voting power we are supposed to have, we're getting an extra 8 or 9. My suggestion is that stakeholders dedicate the extra dollars to taking Steem off the market. Reducing the supply of liquid Steem will result in an increased price (law of supply and demand). Increased price result in increased issuance of SBD due to the consensus rules. Increased supply of SBD will over time reduce the price of SBD, until it reaches equilibrium and the other side of the peg comes into effect.

If SBD is $5, dedicate up to 4/5 of your voting power to self voting, and powering up that Steem. If SBD is $9, dedicate up to 8/9 of your voting power to self voting, and power that up etc. If this policy was generally accepted, self voting would only be the norm during periods when the peg was broken, and those periods would not last long. Despite apparent selfish behaviour, it would result in a rising price and increased power for all stakeholders to allocate SBD.

Fixing the peg would also give the market confidence that we can reign in an overheated SBD and return it to stability.

How to Enforce the Steem Dollar Peg by Self Voting | Ecency