I've been participating in the latest discussions about SBD being a failure and why it should be removed from the Steem network, but I still haven't fully wrapped my head around it. In order to consolidate some of the arguments pro and con for myself and everybody else who's interested, I'm writing this one.

I'll try to summarize the sides in a mostly neutral way, and then I'll comment with a little bit of my own opinion.

The "SBD is a fail" side

The arguments I've read so far are mostly from these two articles by @zappl (here) and @fyrst-witness (here) as well as their comments sections, and they go like this:

• SBD has been designed as a stable coin to ensure a predictable return as well as being a good currency for the Steem ecosystem
• SBD hasn't been stable at all, though, but has been fluctuating between the minimum of 1$ and an ATH of 16$, which has left a lot of people accepting SBD for in-store purchases or similar with a huge loss
• SBD is getting pump&dump'd on HitBTC due to its low liquidity, causing continuous damage to those people above
• SBD's market cap of ~17 million $ according to CMC is eating up value that would otherwise go into Steem itself
• SBD should be removed and potentially re-introduced as an SMT to foster Steem adoption
• A two-token model is too complex and puts new users off
• Some users are already paying (e.g. bots) with Steem

The "SBD is (mostly) fine" side

On the contrary, others have been arguing that SBD isn't actually that broken because:

• SBD has been working "as designed" because there actually isn't a promise of a peg, but only a lower bound
• With wider adoption and larger supply, SBD will become more liquid and p&d will become more difficult
• HitBTC may be the wrong market to be used as a price indicator
• SBD are more likely to be used as a "payment token" inside the Steem ecosystem because of their velocity which isn't slowed down by staking (power up)
• These are also the reasons why most people pay services with SBD instead of Steem
• The SBD peg should be fixed instead

My 2 cents

While I agree to some of the arguments of the "remove SBD" party, I strongly lean towards keeping it. E.g., I fully agree with the higher complexity argument, but this could potentially be solved by clever UX.

However, the fundamental mechanisms here are much more important. These are:

• Removal of SBD shall foster Steem price
• If Steem price goes up continously, people don't want to spend it
• In general, Steem is really powerful when powered up, which in turn reduces Steem velocity and therefore fosters price
• If you increase the velocity of Steem (triggered by the removal of SBD), the price may even go further down

All in all, I don't see really compelling reasons why SBD is so broken that it should be removed from the system. It seems that most of the people arguing in this direction want to pump Steem price on a short notice, but aren't really interested in a healthy long-term economy. However, I think that the SBD price will self-regulate and there are much more liquid markets for SBD than HitBTC (e.g. @blocktrades) which could be used as a more stable price indicator. In addition, as we all get to use / spend our SBD, this should help regulate the price and keep it only slightly above 1$.

Steem and SBD are kind of an experiment, and a very good one. There's hardly any project in the space that could demonstrate the effects of a two-token model better than Steem. If we cannot fix the issues by community / adoption / and a healthy economical model, we could still consider a radical change like this, but for now, we've just sustained the first big hype about Steem (during the entire crypto craze) and the following crash, so the effects we're seeing may also be temporary.