1 SBD = $0.885 USDT - How it is a semi-stablecoin?

puncakbukit (78)in #sbd • 3 days ago (edited)

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Steem Backed Dollar (SBD) is a semi-stablecoin within the Steem blockchain ecosystem. The Ultimate Moving Average indicator recently transitioned to a bullish trend for SBD, signaling positive momentum for the token's value. This indicator, along with other technical analysis patterns, helps traders gauge potential price movements.

The SBD to STEEM conversion rate is set by a decentralized price feed, rather than a centralized authority. This distributed method ensures the integrity of the rate. According to recent technical analysis, the SuperTrend indicator has been consistently issuing a buy signal, suggesting sustained upward momentum for SBD. This is a unique feature of the coin's price behavior.

SBD is not minted like traditional stablecoins; instead, it is generated as a reward for user contributions. This system, often referred to as "Proof-of-Brain," incentivizes users to create and curate high-quality content. This unique distribution model underpins the coin's value and utility within the Steem network.

About Steem Backed Dollar (SBD)

Steem Backed Dollar (SBD) is a semi-stablecoin designed to maintain a value pegged at lower side to one U.S. dollar, functioning within the Steem blockchain ecosystem. It serves primarily as a liquid reward token for content creators and curators on Steem-based decentralized social media platforms like Steemit. Unlike most fiat-collateralized stablecoins, SBD is a debt token and its stability mechanism is unique and operates through a multi-faceted, on-chain system.

Unique Technical Features

The semi-stability of SBD is maintained through a dynamic convertibility mechanism and a decentralized price feed.

Debt-Backed Semi-Stability

SBD is fundamentally a debt obligation of the Steem network. When the price of SBD deviates lower from its $1 target, the system adjusts to correct it. If SBD is trading below $1, users are incentivized to burn SBD by converting it into STEEM, thereby reducing the SBD supply and driving its price back up. Conversely, if the SBD price is trading above $1, users are incentivized to sell their SBD to the native, volatile token STEEM at a rate that may be more favorable than the market price. This increases the supply of SBD and exerts downward pressure on its price, helping to restore the peg. This on-chain arbitrage system is a core feature that distinguishes it from stablecoins backed by centralized reserves.

Decentralized Price Feed

The conversion rate between SBD and STEEM is determined by a decentralized price feed. This feed is maintained by the witnesses, who are the 21 top-ranked block producers on the Steem Delegated Proof-of-Stake (DPoS) blockchain. These witnesses continuously publish their own price feeds, and the median value of all feeds over a period of time (typically one week) is used as the official conversion rate. This design mitigates the risk of a single entity manipulating the price and ensures a more robust and community-governed pegging mechanism.

Reward System and Liquidity

SBD is generated as a reward for user contributions, such as publishing articles or curating content through upvotes. This allows for a decentralized distribution of the token. Additionally, the network provides incentives for users who provide liquidity by placing orders on the internal market, ensuring a liquid trading pair between SBD and STEEM. This combination of Proof-of-Brain (human effort in content creation) and on-chain liquidity incentives makes SBD an integral part of the Steem network's economic and social infrastructure.

Disclaimer: This content is for educational purposes only, not financial advice; cryptocurrency investments are risky and volatile, so do your own research and consult a licensed professional before making decisions.

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