Steem Dollars, the stablecoin native to the Steem blockchain, has seen an incredible price increase of over 106%, drawing renewed attention to the decentralized content and rewards platform.
Originally created in 2016 by blockchain entrepreneur Ned Scott and BitShares founder Dan Larimer, Steem Dollars (SBD) were designed to provide stability in the volatile world of cryptocurrency while empowering a unique ecosystem of social media and content creation.
Its current market cap is just over $47.5 million.
The coin's recent rally reflects renewed interest in the Steem ecosystem, where Steem Dollars play a central role. Pegged to the US dollar, the coin offers a relatively stable cryptocurrency option – which is essential to the platform's reward system.
In addition, Steem – like most cryptocurrencies – can be used to make peer-to-peer digital payments.
Users earn SBD for publishing and curating content on platforms like Steemit, a New York-based startup that sees itself as a decentralized alternative to traditional social media networks .
Why Steem Dollars are important
SBD provides liquidity for transactions within the Steem blockchain and can be used to earn interest as part of a decentralized savings account. It is also possible to convert it to other cryptocurrencies or fiat.
In addition, Steem Dollars can be traded for STEEM tokens or Steem Power, the latter increasing the influence and voting weight on the platform.
The sharp rise in prices, however, raises questions about its sustainability. Although the token is expected to maintain a value close to 1 USD, its market-driven price has deviated from this peg from time to time.
The current surge may reflect speculative trading rather than organic growth in the ecosystem, but it nonetheless underscores the enduring relevance of Steem Dollars in the blockchain space.
Looking forward
As SBD continues to climb, analysts and community members will be watching closely to see if this trend means lasting growth for the Steem ecosystem.
Whether the rise is a speculative trend or the start of a broader revival, one thing is clear: Steem Dollars are once again making waves in the cryptocurrency world.
Several platforms integrate a stable in reward ecosystems to encourage user participation and provide stability. Examples include Hive Dollar on the Hive blockchain, offering rewards to content creators, and DAI from MakerDAO, widely used in DeFi for staking rewards and liquidity.
Binance USD (USD) and USDC are commonly used in platforms such as PancakeSwap and PoolTogether for similar purposes. Curve Finance uses stablecoins like DAI and USDT in liquidity pools, while sUSD from Synthetix powers synthetic asset trading and earning rewards.
Social media platforms like Roll and Rally also include a stable to reward creators. These ecosystems highlight the versatility of stablecoins in reducing volatility and fostering user engagement.
