About those high SBD prices

This post was prompted by the poll that @personz posted today. Recently, there have been calls to forget about the SBD peg, and just let the SBD price fluctuate with the market, so long as the price stays above 1 USD. At this point, I don't have a strong opinion on the question, I'm still thinking it through. However, it brings to mind the old acronym, TANSTAAFL - There Ain't no such thing as a free lunch.

One thing that I've noted before is that authors have the loudest voice on this platform, but the community -
and especially the witnesses - shouldn't neglect the other stakeholders. Not everyone wants to be a writer, and for the platform to thrive, we need many more people than just content creators to be here.

Image source: pixabay.com, License: CC0, Public Domain

Other stakeholders to consider include readers (also listeners, viewers, etc...), voters, entrepreneurs, and investors. It's pretty clear that authors benefit from elevated SBD prices, but what about the other stakeholders? Their positions also need to be considered. I don't have much time to write this, but let's take a quick look at some of them.

Let's start with the readers, listeners, and viewers

Do readers (for textual posts, or listeners and viewers for video/music/photography/art posts) benefit from a high SBD price?

I guess that to know the answer to this question, we'd need to know whether the high SBD price encourages thoughtful, creative, quality content development. I can only guess, but my guess is that the high SBD attracts spammers and easy-money chasers far more than it attracts people who are willing to spend time creating high quality content.

I may be wrong, but if that guess is right, then the high SBD price is harmful to readers, which is harmful to the platform.

Now on to the voters

I have been tracking curation rewards for voting from my accounts and @cmp2020's accounts for almost a year now. This includes bot voting and manual voting, but it's mostly bot voting.

Now let me be clear.

• We don't sell our votes.
• Almost all of our voting power is going to people other than ourselves.
• Our primary goal with the bots is and has always been to promote quality content. We can argue about how well our bots do that, but revenue is and has been a secondary goal. Courtesy of @steemreports, here is our 60 day voting distribution for our bot accounts.

I can assure you that we know very little about most of the 1000+ authors that received our votes, except that they passed our quality heuristic. We are trying to promote the platform by promoting the authors who use it.

However, what we have seen in the last ten or so days, while the SBD price is elevated, is about a 20% decline in daily revenue. There are many factors at play, and I can't be entirely sure that this is due to the high SBD price, but it makes sense to me that the high SBD price would have shifted some voting in favor of self-voting, which would reduce revenue for voters who practice voting diversity.

Now, to be honest, it doesn't really matter that much to me. We're not going to change what we're doing, just like we wouldn't change it if our rewards went up. I'll keep poking around for better quality heuristics and letting the rewards fall where they may. But, incentives matter. If this is happening to other voters across the platform, then some may be getting discouraged and de-diversifying their own voting strategies.

If so, that would also be bad for the platform.

Now the entrepreneurs

These are the people that the SBD was created for. Clearly, they would like stable prices on the SBD. If they don't have it, there is less incentive for them to adopt the Steem family of currencies. Uncertainty is bad for business. In fact, without a stable SBD, there may be little incentive for SBD to exist at all. As @josephsavage noted in the comments of @personz' poll, Steem has actually been more stable than the SBD.

Finally, the investors

SBD represents debt, in the form of Steem, that is owed to SBD holders. In a way, if the SBD is fluctuating, then holding it is almost taking a short position against the Steem block chain. If you are holding SBDs as an investment instead of for stability, in essence, you are betting that your SBDs will be worth more Steem in the future than they are today.

I'm not much of a trader, and I haven't thought about it carefully, but intuitively I would think that the high price of SBD is putting downward market pressure on the price of Steem, although the difference in market caps probably means that the pressure is small.

Wrapping up

So there's a quick survey of how the elevated SBD price might effect some of the other stakeholders in the Steem ecosystem. As I said at the outset, I don't have a strong opinion about trying to restore the peg or letting it rise without limit, but my gut feeling (until I change my mind ; -) is that the peg should probably be used the way it's designed, and if that's not possible then maybe there's no point in maintaining the SBD currency at all.

Update: Forgot to mention, if you haven't already done so, you should go take @personz' poll.