I disagree with you there. Markets are interconnected. When you sell STEEM, it doesn't really matter whether you are selling it for SBD, USD, BTC, or bartering it for camel feet. Selling is selling, and it drives the price down. Demand to buy and hold an asset is what drives the price of the asset up.

BTW, pre-July 4, Dan made the argument that people buying STEEM on the internal market in exchange for SBD would drive the price of STEEM up (I partially agreed). You can't have it both ways.

The market is tumbling because the bubble is deflating. NOT because @steemit is purchasing SBD on the internal market.

Shouldn't the peg be maintained by the mechanics listed in the white paper?

The conversion function is clearly inadequate, especially when there is heavy sell pressure and limited demand. If the price of STEEM is almost always going to decline, the conversion function is only going to become viable if SBD is heavily undervalued by the market... This is a condition that hasn't been met, since the price of STEEM is dropping at a rate which exceeds the market's discount on SBD.

The other mechanism is the interest rate. The interest rate has literally never changed. I understand that this is up to the witnesses, but they seem to have little interest in increasing the interest rate, despite market conditions demanding it according to the white paper.

"The peg" isn't an actual thing if it requires market transactions like this. Then it's just a target price enforced by the most wealthy and influential actors...

Hello Dan. I have a few questions. I am shocked that an account exist with 50% of the total steem supply. I always believed that the intention of steemit was to be decentralized. Could you help elaborate on these questions?

1) Who or/and what is the owner structure of this account?
2) What is the purpose of such a concentrated account?
3) If it's meant to distribute this account. Why is steem power accumulating faster than the powering down. Making the distribution process very insignificant?

It looks pretty sketchy to have downvoted the top post and be the only one who does it. It gave you an opportunity to address everyone's concerns, not that you did a very good job.

The post that you downvoted for no reason that anyone can see besides sketchiness also made the observation that steemit is flooding the market with hundreds of thousands of steem, killing the steem price.

But what usually happens with huge sell walls is everyone else tries to sell lower. When everyone is trying to race to sell lower the price crashes fast.

I think @danthenan has given a stroooong hint of this dumping activity earlier last week in his posts. The sooner the clean out begins, the better. For the brave, this is a good buying opportunity.

Thanks for the explication, Dan

To everybody who's holding steem power and is worried;

> Your steem power are shares of the company's capital. 

The steem dollars the guys are selling, are used to invest in steemit; they need to hire more staff and those people need to be paid, they need more office space, more computers, ever bigger and faster servers and so on ...

So, (as long that's what they're actually doing with the money and not snoring cocaine of hookers asses') that's why YOUR steem power is an investment.

#### The prices going down is just a temporarily effect of this being the early stages . While all it takes is 1 steemit story that makes it into the mainstream news cycle and BOOM 1.000.000 new users overnight; at some point that will happen, but ... before that happens the site needs to get better, a lot better, so ... that's why they need money; to pay for the developers that will make all of our wishes come true :D

(in other words; power up as much as you can, before steemit goes mainstream)

Thanks for the response Dan.  Can you indicate if this is ongoing feature of the market, or is this for immediate funding needs (temporary)?

I was under the impression SBD wouldn't be tradeable on the exchanges. Only STEEM.
But its on Bittrex. And I can transfer SBD straight  there.

so is the whitepaper for steem or steemit?

But why did you flag it?

>All orders are placed at or above price on coin market cap

This is my biggest problem with the "whales powering down" theory of the price slide.

With so much money in SP, it would be absurdly self destructive of them to not put asks in above the market price.

That is to say, its not like theyre  just dumping their steem on the exchanges priced to sell immediately, no matter how far into the order book they have to push.

I think its much more likely for medium and small powerdowns to be doing this.  Especially if theyre coming from non-market-savvy traders.

It's both really. Supporting SBD while also hurting the price of STEEM. It may be above the current price but a huge sell order slightly above market is still going to weigh on the price. I don't think that is really questionable.

That said, it is and always has been the advertised plan of 'steemit' to sell a large amount (approximately 25% of the total holdings of that account; approximately 20 million USD worth!) of STEEM, which indeed redistributes it to buyers, so no one should be surprised by any of this really. I might disagree about strategy as to how fast or when to sell, but that is not based on anything objective at all. Steemit's strategy here is certainly defensible.

The original post was mostly a reasonable analysis, pretty balanced in pointing out the redistribution effect, and original work on a topic of obvious interest that no one else has published afaik.

I am here for long term: https://pixabay.com/static/uploads/photo/2016/04/08/00/57/sky-1315337_960_720.jpg
https://steemit.com/steemit/@steempowerwhale/who-is-powering-up-or-am-i-alone-the-steemit-power-up-club

[The Secrets Steemit's Whales Don't Want You To Know!](https://steemit.com/steemit/@venuspcs/the-secrets-steemit-s-whales-don-t-want-you-to-know)