There are two factors contributing to the ratio. One is the amount of SBD in circulation (which has been declining, and will probably decline consistently from here on out given the size of the potato fund) and the other is the price of STEEM. If the price of STEEM declines then the ratio will go back up. That being said, if the amount of SBD in circulation decreases enough, then the ratio will go down regardless of the STEEM price. At the current rate of decline, this may take some time, though the rate is increasing as potato accumulates more funds.
Both are significant but ratio (and STEEM price) has a lot more short term volatility.
Another perspective on the numbers is that the lower the SBD supply goes, the lower the STEEM price needed to restore the peg. Currently it is about 19.5 cents.
Because simply dumping/givingout money won't fix the economy?
There are two factors contributing to the ratio. One is the amount of SBD in circulation (which has been declining, and will probably decline consistently from here on out given the size of the potato fund) and the other is the price of STEEM. If the price of STEEM declines then the ratio will go back up. That being said, if the amount of SBD in circulation decreases enough, then the ratio will go down regardless of the STEEM price. At the current rate of decline, this may take some time, though the rate is increasing as potato accumulates more funds.
Thank you so much for the explanation. So instead of looking at the ratio. I should be watching the amount of SBD ?
Both are significant but ratio (and STEEM price) has a lot more short term volatility.
Another perspective on the numbers is that the lower the SBD supply goes, the lower the STEEM price needed to restore the peg. Currently it is about 19.5 cents.