Why would anyone still be HODLing SBDs at this point? It’s no longer a Stable Coin, there is a Haircut on Conversions at 38% (at time of writing) and it’s no longer getting paid out as a liquid reward for Steemians who are still posting. To top it all off, its Conversion Value is going to be capped at $1 USD even if the market does bounce by more than 50%. So now that the SBD is pegged to STEEM instead of the USD why would anyone still be holding SBDs? At least with STEEM there is no limit on the upside and it can still be powered up and used, but what utility does the SBD now hold…? ![Redundancy.jpg](https://cdn.steemitimages.com/DQmXthsBNCSZ92gxCrdsJv48fv2pugZ7YNnGhHh26L1Z7TS/Redundancy.jpg) [Source](https://masonbullock.co.uk/wp-content/uploads/2012/11/Redundancy.jpg) Obviously there are still plenty of people HODLing their SBDs as there are millions of them still sitting on the exchanges. In my last post on this subject [HERE]( https://steemit.com/steem/@buggedout/steem-dollar-peg-to-usd1-usd-is-broken-again-but-not-how-you-might-think) I predicted that the SBD conversions would dry up and then some of the remaining HODLers would dump when the market collectively realised that the SBD was now pegged to STEEM. I think we are seeing the 2nd part of this prediction play out today, but first let’s have a look at the Purge stats. ![SBD_Conversions20181207.PNG](https://cdn.steemitimages.com/DQmY2daRrcSd8drkThE7VUXjUHjjeMPHHctpi6aji3HyL9q/SBD_Conversions20181207.PNG) You can see that up until December 5th the SBD Conversions did indeed dry up. I may have underestimated the market a little bit as the SBD price has been tracking the Par Value on conversions pretty closely up until today. There are some growing signs of panic from SBD HODLers today though. With SBD now trading at around 58 US cents it looks like market participants are now waking up to the peg situation and they are barfing SBDs. So we look to now be re-entering Purge Territory with Market Value now dropping back below Par Value. If you want to calculate Par Value for the SBD yourself, check out the Steem Info tab on SteemWorld and do the simple math below. ![](https://cdn.steemitimages.com/DQmdRY2V3BEuHUahMe7r3CGnboeb8cawUHzx3hivprXCUY6/image.png)[Source](https://steemworld.org) I wish I could say that I think we’ve hit the bottom, but I still have a lot of concerns. A bit has happened on the Steemit Inc front since my last update. Firstly they announced a 70% lay-off of staff to focus on reducing costs. When I first saw that news I immediately thought this would kill either the timing or the scope of SMT delivery. SMTs are what many have been holding up as the “Great White Hope” for the platform so I expected it to have a big impact. I was surprised that the market didn’t dump hard on this news but quite likely this news was priced in already and those “In the know” were possibly selling hard prior to the news breaking. That might explain why we saw STEEM dumped from 80 cents to 30 cents in November (before the news broke). In hindsight we could blame the Bitcoin and broader Crypto-market drop but if we’re being honest the STEEM price has been savaged and has under-performed almost the whole market. STEEM has now dropped to Rank #51 on Coinmarketcap.com ![](https://cdn.steemitimages.com/DQmeMrFvXFHfTrqnybqQpwmtCibAWenZzr1o8PQcuXDikGu/image.png) I’m also hearing some grumblings from the Witness ranks as the earnings from producing blocks (which are paid in STEEM) have dropped below the cost of running the underlying infrastructure. The STEEM blockchain has been running for a few years now, so there is a lot of data in the blockchain and there is a growing concern that the Witness ranks could be decimated as many would be running on infrastructure that is now making a loss. This subject is probably worthy of its own post series, but it’s worth noting that we have seen another announcement yesterday that Steemit is going to try and help Witnesses costs by implementing RocksDB to reduce infrastructure requirements. Steemit is also trimming down the scope for the SMT implementation which they have now labelled SMT-lite. It looks to me like an attempt to re-assure the market and stem the bleeding, but I do think it’s positive that we’re finally seeing some greater transparency and communication from the #1 stakeholder. Let’s hope it succeeds in calming the market and Steemit Inc can deliver on these new promises. _____ ![TeamAust_buggedout.png](https://cdn.steemitimages.com/DQmUt49vWU6QZLjCaRE1BvngS3jQb52Tc76kDZkhinhWCo1/TeamAust_buggedout.png)