The stablecoin responsible for making the Steem blockchain function, Steem Dollars (SBD), is up over 106% since its last all-time high, making for renewed interest in the decentralized content and rewards platform. The increasing dynamics of blockchain-based ecosystems and the popularity of stable coins in continuing to draw users to their ecosystems are manifested by this dramatic price increase.
Steem Dollars (SBD) are a cryptocurrency launched in 2016 by Ned Scott and Dan Larimer to provide stability to the price volatility of cryptocurrency and fuel an interesting ecosystem of social media and content creation.
SBD is the currency pegged to the U.S. dollar and thereby the basis for the working of the rewards system of the Steem blockchain, which provides a means to earn cryptocurrency by posting and curating content on platforms like Steemit.
Steem Dollars Market Cap Surpasses $47.5 Million
Coin’s market cap has since surpassed $47.5 million and remains relevant in a crowded landscape of lucrative cryptocurrencies. Steem Dollars are beyond content rewards and act as a liquidity mechanism in the blockchain for completing transactions, earning interest, and converting to other digital or fiat currencies.
The recent spike has been energizing in the Steem Dollars interest but there are lingering questions of stability w.r.t. that currency. SBD is supposed to keep parity with the USD; however, its price has often dropped away from this peg because of market speculation. The current surge, say analysts, may be the product of speculation, not organic growth of the ecosystem, but the stablecoin once again shows interest in the broader blockchain industry.
Additionally, Steem Dollars also help contribute to increasing the influence on the Steem platform. SBD conversion elevates users’ voting weight in the community. The unique functionality of SBD makes it more than just a transactional currency; it’s a governance and engagement tool on the decentralized level.
Similar to the broader trend of stable coins fueling innovation on blockchain platforms, the rise of Steem Dollars parallels another revolution on a separate blockchain. Stablecoins are being used for staking, liquidity rewards, and user incentives all over, from Hive Dollar on the Hive blockchain to DAI in the Decentralized Finance (DeFi) sector.
BUSD and USDC power the liquidity pools of the platforms, such as PancakeSwap, while sUSD from Synthetix is for synthetic asset trading and staking reward. Similar examples, such as social media ecosystems like Roll and Rally, use stablecoins as a means to reward content creators for lower volatility and higher user participation in such incentives.
The crypto community is eagerly watching to see how high the Steem Dollars can go and if that will be the opening to a Steem Renaissance or another crypto speculative bubble. Stablecoins are vital to blending stability and innovation in the cryptocurrency business, and the token’s price action reflects this fact.
