What is Steem Dollars (SBD)?
Steem Dollars (SBD) is the native stablecoin of the Steem network. Developers can create a variety of decentralized applications (dApp) using the Steem blockchain, while content creators can monetize their work and expand their communities.
Steem is a blockchain, while Steemit is a blockchain-based blogging and social media network. Most social media platforms categorize content using voting mechanisms such as likes and shares. Steemit combines these aspects into a one-of-a-kind decentralized platform that allows users to get paid in Steem for their network activities.
Steem offers three kinds of currencies – Steem (STEEM), Steem Dollars (SBD), and Steem Power (SP). Steem and Steem Dollars can be traded. Steem Power, on the other hand, cannot be traded, as it is an in-platform currency.
The Steem Dollars token is the platform's short-term debt and the standard reward currency. The SBD price is equivalent to one USD due to the fact that it is a stablecoin pegged to the USD. However, the price still does fluctuate a bit. Check out the Steem Dollars price chart above to see the current value of the token.
Use Cases of SBD Tokens
The goal of Steem Dollars is to protect traders from price fluctuations and manipulation. The Steem algorithm protects the community from manipulation by allowing users to only exchange from SBD to STEEM and not vice versa. The blockchain regulates how and when SBD are formed, as well as who receives them. Therefore, it stabilizes the rate of SBD generation and removes the majority of the potential for misuse. Many consider the Steem Dollars price as a positive point attracting potential investors.
Users must earn SBD in order to acquire them. They can earn these tokens by writing blogs, commenting, and liking on Steemit. The idea is that people who write useful blogs can get upvotes. Thus, bloggers who receive upvotes on their posts are compensated with SBD coins. Though other network users can also get rewarded in SBD tokens.
According to the Steem whitepaper, individuals who own SBD lend the community the equivalent of one US dollar, hence promoting network growth. They also earn 10% yearly interest on their Steem Dollar holdings.
If the volume of SBD debt ever exceeds 10% of the Steem market capitalization, the blockchain will effectively modify the amount of Steem created through conversions to a total of 10% of the market capitalization. As a result, the network's debt-to-ownership ratio will never exceed 10%.
A user holding Steem Dollars has several options:
- Convert Steem Dollars to Steem. The process typically takes 3.5 days.
- Hold Steem Dollars and earn 10% annual interest.
- Make a long-term investment by exchanging Steem Dollars for Steem Power.
- Trade it on one of the exchanges.
As the Steem Dollars price is intended to be stable, 50% of the payment to creators and curators on Steemit is processed in SBD to protect them against the fluctuations of the Steem cryptocurrency.
Who Founded Steemit?
Ned Scott and Daniel Larimer founded the Steemit crypto platform in 2016. With years of experience in finance, Scott had worked as a Business Operations and Financial Analyst at Gellert Global Group, one of the highly esteemed food-importing companies with over 100 years of experience in the sector.
Larimer is an expert software engineer and entrepreneur in fields such as blockchain and crypto. Besides Steemit, he has been a founder and a key figure at different companies like Cryptonomex, Bitshares, and Invictus Innovations. He served as the CTO of Steemit until march 2017.
Tokenomics of SBD
As SBD is a stablecoin, it doesn't have a max supply set. However, you can find the latest Steem Dollars price, total supply, trading volume, and other metrics on the charts above.