Some Thoughts On Tokens, Burns and SMTs

With the proliferation of tokens on steem-engine and SMTs to look forward to, i'd like to throw out some ideas about how it could affect the Steem price. And the concept that's guiding my thoughts is that of 'equilibrium'.

A hypothetical example

Let's say you post a picture of your cat on Steemit everyday. You have a few hardcore followers but not much outside attention so your daily rewards are pretty stable at $1.

Now, there's a new "Cat Community" token that's created to reward posts about everything to do with cats and naturally, your posts are rewarded. So now you get that $1 in Steem and X Cat tokens. How much are these Cat tokens worth?

Equilibrium

At the start, the value of Cat tokens should be however much Steem was burned to create the tokens. If 100 Cat tokens are created by burning 100 Steem tokens, then each Cat token would be worth 1 Steem.

Further on out, we have to think about the supply and demand of the coin. This is more straightforward and we can leave it to the market to do its job. Similarly with inflation. The market will take care of the new coins being created and adjust its value accordingly.

Overvalued coins

If you can create a coin without burning / trading another asset, then something will have to give down the road. In the absence of outside money either the price of Steem has to fall or the value of Cat Coins have to fall. Otherwise, the system is in disequilibrium.