Steem
$0.44755 -4.49%
STEEM · 208w

A little about Steem dollars (SBD) and how to make the most from price fluctuation, without trading, if you're not doing this, you're likely losing out

TLDR

It's a long post but this bit of info can probably make a lot of you, a bit extra on your posts, so I thought I best put it upfront.

If SBD is worth less that $1 you should be using the 100% SP option for your posts.

If SBD is worth more than $1 you should be using 50/50 option.

Image altered from this source

First a bit of background.

How Steem dollars keep parity with the dollar

There are two main methods used to keep steem dollars in line with USD, one is done by witnesses (like elected admins of steemit) and the other is done by regular individuals like you and me.

Interest rate

If the value of Steem dollars fall below $1 witnesses can vote to increase the interest rate, people get paid to hold steem dollars. Currently it is at 0% with only a few witnesses voting for higher. You can see this amount on the wallet page.

As 0% is the lowest this can go (I think adding in an option to have a minus rate might be useful), this method is mainly used to raise the value of SBD.

Rewards

The second way that SBD is regulated is via the payouts. We all have 3 options when posting, we can opt for

100% SP and 0% SBD 50% SP and 50% SBD 0% SP and 0% SBD (Decline payout)

These reward options have a massive effect on the price of steem dollars as this is the main source of them. If more people use the 50/50 option the amount of SBD coming to the market will increase which will drive down prices. And conversely if more people use the 100% SP option there will be less SBD and the price will increase.

Why does it matter that SBD fluctuates?

That amount of money that you see under your post, you know the one we all obsess over, well that's not in USD it is in SBD. So let's look at an example where you write a great post about pineapples, or whatever, and you earn $10 lets see how you would be affected depending on 3 prices of SBD. We will also assume STEEM (same as SP) is w...

Continue on steemit.com
Recent news
No posts found