I will add to the above that with SBD being in a distressed state and multiple objectives in play including price stability and wanting controlled debt reduction, further adjustments may be needed. This includes the possibility that SBD could become too strong, providing insufficient incentives to perform conversions and reduce debt. The 'haircut' rule at 10% complicates things considerably. Hopefully we can move a comfortable distance from 10% debt ratio reasonably soon.
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Haircut is a euphemism for going bald here. A haircut grows back, but it is hard to see how SBD can recover once the peg is history.
It can recover if held and the STEEM market cap increases and/or if debt is sufficiently reduced such that total SBD outstanding drops below 10%.
The payoff profile for holding SBD while near the 'haircut' limit, ignoring the question of debt reduction, is similar to that of holding a covered call position on STEEM: downside as with STEEM, but trading upside for premium income (interest here).