Over the past several months the price of STEEM has dropped dramatically and that has introduced some issues for SBD, which is a stable value coin (aka stablecoin) backed by about $1 worth of STEEM. As part of the implementation of SBD, there is a rule which gradually reduces the backing of SBD below $1 when STEEM's value becomes too small to support all of the SBD in circulation at the full $1 value (in addition there are mechanisms to reduce the amount of SBD, but that is not relevant to this post). The way this is done is by adjusting the price feed provided by witnesses so that the system assumes STEEM is worth a bit more than it is when performing internal calculations.
The price feed adjustment is normally reasonably small and, while this would introduce an inaccuracy in values on UIs (including steemit.com) which rely on the price feed for their estimate of the price of STEEM (such as steemit.com), the inaccuracy would be quite small (similar to other such inaccuracies in displayed values due to factors such as changing market prices, changes in the size of the reward pools, etc.). However, due to a bug in the popular steem-js library, steemit.com and another of other UIs (including steempeak and steemworld) have experienced a dramatic inaccuracy as well as various other malfunctions (such as post payout detail being incorrect). I reported this bug several hours ago upon identifying it, but it has not yet been fixed. EDIT: @eonwarped also found and fixed some additional issues in condenser itself.
Some of the other UIs have introduced their own work-arounds for the problem but currently steemit.com is not yet fixed.
After some quick investigation in cooperation with @timcliff, as far as I know the problem occurs only in the UI (display) layer and does not affect any blockchain calculations.
Rewards will be donated to @burnpost
Is this actually being done? I thought you were against the idea of doing this?
Not adjusted by witnesses, but adjusted internally by the system (code) to maintain the 10% SBD cap.
Ok, thanks for clarifying.
He buggedout, you are our man to really understand this so good to see you investigate :)
Thanks for filling in some details about this strange (though fortunately mostly harmless) occurrence.
resteemed so I dont have to keep explaining to people, thanks!
The system wasn't designed with such a fast drop in price in mind, I guess.
I'm enjoying calling myself a #cryptobillionaire! ;)
If the debt ratio stays below 10% would it be a plausible strategy to buy SBD on Bittrex and then use the conversion method to convert to STEEM effectively ending up with more STEEM than would be earned if the same amount of fiat money was directly used to purchase more STEEM? Or is the pricing and everything in too much flux that it would be too risky to attempt this?
I did a few conversions recently, and yes, generally speaking, If your goal is to power up it makes sense to buy SBD and convert rather then to buy Steem. Here's one example :
100 Steem => 54 SBD =>convertion=>125 Steem
However right now I can only buy 52 SBD for 125 Steem, so in SBD terms it was a loss.
It can end up being more or less depending on market conditions and various system rules. It can certainly pay off, however, If you want to attempt this, I would suggest making sure you fully understand the process in detail, and also that you are prepared for the inherent risks.
So I don't really have 20 billion dollars coming? sigh back to work then
Thank you very much for your explanation.
You mean by Steem account isn't worth $296,564,412,029.54? Rats... lol.
thanks for the update.
Nice, Im happy to hear the issue is being adressed or at least taken note of, thanks @smooth and @eonwarped and @timcliff, hope you can fix it...
/FF
Thanks for the information. I sure am hoping all these bugs get taken care of soon. I have faith in the steemit fixers.
Love
Says my account value in US dollars is like 100 billion, haha. Cash me out baby!!! Lol.
Thank You @smooth for the clarification, seeing $58,708,518,209.36 in my wallet after not being on much sorta stopped my heart, I knew there was a mistake ;-)
I thought I won some kind of Steemit or PCH Lottery...Bummer...
Back to posting/commenting then ...
Thanks for letting us know,...
I was wondering what was happening so thank you for clearing things up 👍🏻
Posted using Partiko iOS
Appreciate the update. For a moment (given the large numbers) I thought maybe this was part of a UI design change to show our available resource credits, but those numbers didn't add up, either.
Thanks for clearing that up.
Thanks for the explanation.
Posted using Partiko Android
Smooth, the median is used in some calculations. So that's not really true.
Example, to calculate the Debt Ratio, the median is used.
We have a Debt Ratio of 10% now, what does this mean?
Will the median price flip/flop from the old median based on exchange rates to the new median based on market cap? Back and forth?
The median is being calculated correctly, so the calculations are fine. It is just being handled incorrect by steem-js (a client-side library) and the results are displayed incorrectly by some UIs.
The debt ratio is 10% because that is the cap. At 10% the system starts reducing the backing of SBD to maintain 10%, until the fully-backed ratio drops below 10%. Right now backing on SBD is reduced to about 88c since the 'true' debt ratio is slightly above 10%.
I don't understand what you mean by flip/flop here.
Sometimes the debt ratio goes below 10%.
Before when it was lower as 10% it used the median price / 1 for the median price. After hitting the 10% it uses marketcap / supply.
Flip Flopping means, 10% or higher and 1 hour later below 10%.
Wil it change the median price calculation between the 2 above?
Because it makes a difference and every time it goes below 10% again, conversions would be possible because it restores also the 1 USD peg.
Or once we hit the 10% it's done? we lose the 1 USD peg and change the way the median price is calculated and thats it.
If thats the case, we have a serious problem.
Problem for example, I can calculate with the current 10% Debt Ratio and it's change to marketcap/supply what sbd price would do.
Knowing that we talk about an average median (3.5 days) and in the current situation the marketcap of sbd is capped to 10% of the steem marketcap.
This means the sbd price will follow steem 0.385 down to 0.783.
They both will behave like they are 1 currency.
Are you sure that currently 1SBD is not 1 US$ ? That would mean they have lied in their white paper.
In addition, the destruction of SBD will no longer work, so that SBD doesn't come back to 1 US$.
And when the steem supply increases extra because of sbd conversions and also the 10% cap ... imo the only way is down...for both steem and sbd.
Please tell me I am wrong...
The 10% cap rule is only applied once per hour when the median feed is recalculated (at which point, if necessary, an upward adjustment is applied to the median feed value). In between those updates, there may be some intermediate results that aren't fully up to date. Does that answer your question?
Bear in mind that any time you initiate a conversion the conversion rate won't calculated and applied until 3.5 days later. So you are always guessing to an extent what that future rate will be. Of course, knowing how the rules work may inform that guess.
Yes, thank you. Because of you, I found a better way than calculating the ratios. I use the median feed price against the internal market quotes now to decide to start an hourly sbd conversion.
I am happy again. :) thumbsup smooth
Are you saying that I can't get a Lambo? smh...lies....LIES!!!
the price of SBD has in the past changed much more of a % in a shorter time
why did this only happen now?
The price of SBD isn't the issue here, it is the price of STEEM. And while I can't really say when the percentage drops have been the highest since I haven't studied that question carefully, I can say that the other day had a very large one day drop of 20%+, and also (and more significantly), the cumulative drop is the more important issue. STEEM has dropped so much that it no longer serves as sufficient for full backing for SBD. That is what triggered this issue, although most of the visible symptoms are caused by software bugs as discussed in the post.
SBD or STEEM both have increased more than 20% in a day why didn't it trigger then?
you can see from chart above and below 1 day candles displaying price movement in a day multiple times being over 20% with the highest recent movement being a 70% change on the 2nd of january from $4.8->$6.90
would it be the rising of the debt % with HF20 that would have caused this? as far as i know the system wasn't originally designed for this wouldn't that be a more logical reason
The rising debt post-HF20 was a minor factor, and the trigger would still have been hit without HF20 (ceteris paribus). About 600K SBD was printed post-HF20 out of a peak of almost 15m. The cumulative decline in STEEM along with its pace is the biggest factor.
One can argue that the system is indeed designed to handle (and is handling) this since it does have the 10% max debt ratio rule. As I write this appears to be working, with the backing of SBD back up to 91c from a low of about 85c. Hopefully it will fully recover soon, though ultimately it depends on the STEEM price decline stopping or at least slowing.
Rising STEEM doesn't present any issues here, BTW, only falling.
not the rising debt the print rate of liquid steem after threshold it was to start slowly and build from 5% the change allowed this higher but obviously was too much at once
the SBD price was/is 91c nowhere
it is $1.12 on hitbtc but this is fake, average for the rest is $0.86c
via
https://steemworld.org
91c is (well was at the time I wrote; now closer to 90c) the current amount in STEEM that the blockchain will deliver per SBD to a matured conversion request. If you don't like the market price you can use the conversion feature but you must accept a 3.5 day delay.
i see for 15mins about $10k USD was traded on bittrex to get to 90c for 3 mins and fall again now back at 87c
yes i see the ability to stop a conversion has been removed for some reason and why hasn't the conversion function been restored on the most used portal steemit.com surely many users converting small amounts would add up to more than is currently and help stabilize the system as was in the past
Buenos día amigo , me encanta tu blog. saludos
Yeah, also had it messed up on Steeve. Fixed by
const estimate = new BigNumber(vote.rshares) .dividedBy(recentClaims) - .toNumber() * rewardBalance * sbdMedianPrice; + .toNumber() * rewardBalance * priceSbdBase / priceSteemQuote;where
priceSbdBaseis actuallysbdMedianPricerenamed.Posted using Steeve
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0.119 SBD, 29.043 STEEM and 29.337 STEEM POWER for smooth/why-account-values-and-a-few-other-things-are-messed-up
https://steemd.com/b/28153347#56dbfee38f83e235ab50913cf7c6528e2b482c8c
https://steemd.com/b/28153357#544bed97c74201a5fe894942bf836762e65af204
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Hi, I have noticed you are voting for the witness @klye that has been inactive for over 1 month, maybe could you consider changing the vote for me, @igormuba, as I am a new and active witness? Thank you, hope you can support my campaign
Hi @smooth
I've been following you for quite sometime already and I just checked your profile to see if you posted lately anything interesting related to crypto (as we seem to share similar passion towards blockchain etc). Just to realize that you didnt publish anything in a long time.
Hope you didn't abandon Steemit as many others did recently? :(
Yours
Piotr
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