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RE: STEEM and SBD supplies after week 2 of SPS burning [burnsteem100]
SBD is dropping, and Steem is sliding along with it. As I’m writing this, SBD is trading at $0.4959 and Steem at $0.07212.
So the question is: does it make sense to use the DAO Funds to start buying Steem on the internal market at these levels, or should we wait until SBD moves back toward $1?
I’d also like to warmly welcome @xpilar, @jondoe, @rme, @steemfy, @blockbyte, @steemchiller , @justyy , @moh.arif, @moecki, @steem-agora, @upvu, and @h4lab to this discussion. It’s always better to have these conversations on-chain rather than on Discord.
What do you all think?
I also think it's good that we discuss this on-chain, so I hope to see more comments.
If, in addition to ‘burning’, the aim is to stabilise prices or even increase them, I don't think it's necessary to wait for an SBD price above $1. Am I correct in assuming that the bought STEEM should be burned?
At the end , we just need to be clear about what could happen with which players. If we offer SBD on the internal market, this could have an impact on the external market if arbitrage trading works.
So let's assume that the DAO buy order causes the STEEM price to rise on the internal market. Arbitrage traders could buy STEEM cheaply externally in order to sell it internally at higher prices. This would indirectly lead to higher prices externally as well.
The decisive factor (and one that is impossible to predict) is what the traders then do with the SBD. If they are then sold externally, the external SBD price would come under pressure. Or we could see more conversions again.
The best thing to do would probably be to offer interest at the same time so that the SBD sold from the DAO is not resold.
Under the condition (also mentioned by @remlaps) that the accounts involved are controlled by the community, I would support it.
Yes of course its for burning . I also like the Idea on paying Interest on SBD very much , People would hold it for a Nice return i think
My opinion... if the liquidity exists to support it, buying pressure on the STEEM price plus burning STEEM would be far superior to just burning SBDs. It's applying two different forms of favorable pressure. And, as long as STEEM is priced below the haircut threshold, the SBD price should rise organically if the STEEM price rises, so the selling pressure on that side shouldn't matter at all.
To me, the only conceivable drawback is that burning STEEM would raise the haircut price. (Maybe it's worth burning a mix of both to hold the haircut price constant?)
BUT, I would only support it with a strong community control on the account that's buying the STEEM. Over the years, I've seen too many rug pulls from anonymous accounts who promised to do good things with funds that they collected. I will never again support initiatives like that without some oversight capability.
If we can't have some sort of technological or legal guarantee that the funds will be used as expected, I'd rather just keep burning SBDs to get the haircut price down to a reachable level. That requires 0 trust.
(FTR,compared to BTC and HIVE, STEEM has been holding steady, or even gaining, and the SBD price is still tracking the haircut ratio. So, I'm fairly confident that the burn initiative is not causing any price declines. IMO, those prices are just dropping with the broader market.)
I propose that we maintain or even increase the current SBD burn rate until it reaches the $1 peg.
In addition, we can allocate SBD DAO funds specifically for STEEM new exchange listings.
This means actively reaching out to major exchanges where STEEM is not yet listed (such as OKX, Bybit, and KuCoin) and offering marketing budgets or listing, support funds as needed.
If possible, we should also attempt listings on Coinbase or Kraken.
A successful listing on major exchanges could drive a short-term price increase for STEEM, and combined with continuous SBD burning, this would strengthen the overall ecosystem.