It's been a while, but my criticism of Steem is back and stronger than ever! In this post I'd like to discuss SBD and why I think that witnesses are making a big mistake by not printing more.

Reasons to not print more Steem

I keep hearing the same tired argument for not printing more SBD. SBD is viewed as the debt of Steem, which I think in itself is arguable. Still, if we assume that SBD is indeed the debt of Steem then the reason for not printing more is obvious: printing too much debt could lead to a cascading crash that decimates the Steem ecosystem. Nobody wants that.

However, the amount of SBD that witnesses are willing to print is entirely too low. The target is 5%. Therefore, because Steem has 271,180,705 coins in circulation according to this rule we should only be printing around 13.6 million SBD. We are already at 15,698,554 SBD so witnesses have almost stopped printing SBD entirely. This is bad, and I'll tell you why.

Investors have been treating SBD as a speculative asset instead of one that's supposed to be pegged to $1. You can't reduce the value of SBD to $1 if you stop printing it. People are holding SBD. The answer is simple: print more SBD. I really don't understand what they are thinking.

We want the value of SBD to go down to $1. We obviously have to print more. Making the claim that printing more will destabilize the economy is ridiculous. The MakerDAO only requires over-collateralization by 150%. This means that every Dai dollar printed only has to be backed by $1.50 worth of Ethereum. This system is working just fine.

In comparison, Steem wants every SBD to be backed by $20 worth of Steem. Instead of 150% collateral they want 2000%. This conservative fear of printing more debt is having a very negative effect on the Steem ecosystem.

USD is also debt. How much collateral does USD have? Well we're using a fractional reserve system, so it's far less than 100%. More debt is owed back to the Fed than money in existence. Even this totally messed up system has been up and running for a hundred years. Clearly, we need to rethink this 5% target mark.

We have to bring the value of SBD down to a dollar much faster. We need to allow people to get payouts in 100% SBD to achieve this. Being afraid to print more SBD is ridiculous at this point. The Steem platform can handle way more debt, as is obvious by the success of the MakerDAO platform.

Once more SBD gets thrown into circulation people will stop treating it as a speculative asset. Once SBD goes below $1 people will actually trade it in for $1 worth of Steem, destroying the SBD. This is how the system was meant to operate in the first place.

The value of having a stable coin connected to Steem is an absolute necessity to mainstream adoption. Currently, the witnesses are making a huge mistake by not printing more. The 5% target is abysmally conservative and hurting the platform a lot.

I was in a discord a few months back and tried to pitch the whole 100% SBD payouts idea and was basically shut down instantly.

We don't want plankton to cash out their money instantly.

Really? That's what we're worried about? The group getting the least rewards cashing out? I just don't get it.

Return from Fixing Steem With Baby Steps: SBD to edicted's Web3 Blog