Steem-Backed Dollars are denoted by the symbol SBD. The role of SBD is to provide to the Steem blockchain a financial instrument that has a stable value of at least $1 USD. It is important to note that historically, the SBD has failed to remain stable on the upside but has been successful are keeping a price floor of around $1.
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If STEEM is viewed as ownership in the whole supply of tokens, then a token-convertible dollar can be viewed as debt since it is a promised to return $1 worth of STEEM at a later debt. A rapid change in the value of STEEM can dramatically change the debt-to-ownership ratio. The blockchain prevents the debt-to-ownership ratio from getting too high by stopping to the printing of Steem-Backed Dollars when the debt level exceeds 10%.
Learn more: Steem Whitepaper