SBD will never below $1 because you can burn it and receive $1 steem in return.

If it goes below $1 people can make a profit just by buying and burning it.

I think the haircut is less systemically broken then the print limit. The haircut shifts existing price risk from STEEM onto SBD holders. If they don't like having more risk, they can sell, at which point the SBD price will drop, SBD will start getting converted and its total supply will drop. It at least tends to push SBD in the right direction. The print limit is the opposite: If SBD is overvalued, then it doesn't get converted, the supply steadily increases and then printing stops, which makes SBD more scarce and potentially drives the price even higher (WTF?!).

I understand you have expressed concerns about the haircut but personally I don't see it as a problem (other than potentially impairing the utility of stable SBD at some point, but we are so far from that now, not something to worry about at this point).

> By the time enough "extra" SBD has been printed to drive the price of SBD below $1, the debt load will already be in haircut territory.

If it takes that much SBD to bring the peg back to $1, I don't necessarily think it is wrong to print that much. 

The SBD traders who are holding (and buying) SBD all the way up to that point are the ones who are taking the risk, and they are the ones that will get harmed if the peg drops below $1.

> I think this change will add significant systemic risk.

I hear you, and I don't want to downplay the significance of the point you raise. There definitely is some risk with this. With the way the SBD economy has been working though, I don't personally consider it a systemic risk though.

If we pass the 10% haircut limit, let's say even to 20% - that is a risk for SBD holders. In this (hypothetical) scenario - SBD could drop down to $0.5 USD.

The question though is what would happen to it after that. While it is completely hypothetical/unknown, it is somewhat likely that traders would see it as a significant buying opportunity - possibly long before it reaches that point.

I think the important thing that we have learned is that the market is not really looking at the SBD->STEEM conversion rate at all (at least currently) with regards to the value that is placed in SBD. Speculation is playing a much more significant role.