Raising Steem to a new low

A little over two weeks ago I added a post talking about Indicators of vested Success which looked at how much Steem was staked on the platform.

(30.8.2019)

18 days later:

(16.9.2019)

That is +1,972,413 STEEM and represents an increase of 0.98% - almost a full percentage point more powered up. While some of this is because curation rewards get paid as STEEM power rather than liquid, we have also gone through potentially two cycles of powerdowns and are still up overall.

In regards to current supply:

(30.8.2019)

(16.9.2019)

That means that 1,520,065‬ has been added to the supply over the last 18 days, meaning that 452,348 has been bought off the exchanges and powered up, or converted from SBD into Steem Power. ‬

I see this as a great sign and that there is potentially more people recognizing that due to the changes from the hardfork, there is increased interest to power up or at least, not power down.

This is further aided by buys on bidbots being well down as many buyers had to continually powerdown to purchase and because of the buys being down, the bots are manually curating Steem with their stake to keep their curation rewards ticking over for delegators. This last one is a very interesting one to consider because who they curate is likely going to affect the stake numbers significantly.

While a lot of the purchasers of votes were extracting the profit value and the delegators earning Steem were getting it in liquid form making it easier to sell, now the stake is more likely voting on contributors of a different ilk. What I mean by this is that they are much more likely to be voting on higher quality content creators and, people who have proven themselves as community orientated, including those who over the bear market have been buying and powering up their Steem. This is further aided by curators who have brought back their delegations from the bots and are now actively voting on community members, rather than buyers and in voting circles.

If this continues in this vein where community members who are supported are those who are powering up, a great amount of the new Steem from the inflation pool is going to go straight into staked Steem and this closes the gap in how much liquid there is percentage wise on the market. This means that there is an increasing relative scarcity and while it might not have much effect now, if people sink more STEEM into stake, the value of STEEM not only goes up due to scarcity, but the incentive to have more stake climbs with it.

As Steem increases in price the voting values climb accordingly however there is no more STEEM in the pool. That means (all things equal) that if a vote is worth 1 STEEM today at 16 cents, it will be worth 1 STEEM tomorrow at 10 dollars.

However, who that STEEM is going to still matters and when prices are up, there is still the incentive to keep powering up to have larger voting draw on the pool, even as there is more incentive to sell on the market. Many will sell, but those who are looking long will not sell as much as they are powering up as they will want to take advantage of vote values in the future too, especially after the next (most likely) hardfork.

The next hardfork introduces Communities, SMTs and Resource Credit delegation pools, and as we established last year in hardfork 20, Resource credits (RCs) are going to be needed for interaction. If the communities and SMT-powered applications are able to draw in a lot of people, they are going to need RCs in order to interact and they only come through powered up Steem. This means that there can be a resource price applied to applications that buy bandwidth or more likely, reward RC delegators with their native application tokens. The tokens of some of these applications can be very valuable in time.

This means that STEEM POWER will have an additional revenue stream at least added to it and not only that, it is also likely to attract airdrops of tokens as well that can be staked and used to reward and earn curation on various native interfaces, adding more revenue streams of yet to be determined value.

With so much Steem from the pool getting powered up, that will mean that there could be pressure on the liquid Steem on exchanges as the tap is closing to earn from the pool. This can put a slow upward drive on the price that not only raises the price, but because that Steem is intended to power up to earn additional revenues on, will put more Steem into the Steem Power sink and create a more stable floor that raises as demand increases, and demand should increase as prices rise further and development attracts more demand as there are more ways to utilize Steem power to earn upon.

Of course, when talking about price at this point it is almost pure speculation, however with the changes of the last hardfork to being more investor friendly and the next one being much more community orientated, signs are looking good that as the changes arrive demand on Steem Power will increase and in so doing, raise demand on it again through price rise and enabling tokenized layer growth.

If the conditions encourage both taking Steem off exchanges to put in a Steem sink whilst concurrently encouraging growth of the user base, there will be increased scarcity on the token and increased demand for it in various ways by an increasing number of users. That should drive prices up further as well as raising the floor price and at some point, even the floor level will be high enough to attract a great deal of attention from the market and the masses coming into the crypto and blockchain scene.

Will it happen this way? Keep powering up and let's see.

Taraz
[ a Steem original ]