RE: Burned tokens, rewards, and inflation summary November 19, 2022 - Total burn estimates: 168,687K STEEM/SP and 63 SBD

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RE: Burned tokens, rewards, and inflation summary November 19, 2022 - Total burn estimates: 168,687K STEEM/SP and 63 SBD

remlaps (74)in #blockchain-metrics • 2 years ago

If I did the spreadsheet right, here's what the overall decline should look like, so 7% is right on target.

My understanding is that the "current_supply" inflation rate should always match the target, but the virtual_supply might vary a lot, depending mainly on the price of STEEM, so I guess the previous analysis was basically backing into the virtual_supply number.

2 years ago in #blockchain-metrics by remlaps (74)

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o1eh (79) 2 years ago (edited)

Thank you for your answers and valuable information. I am interested in this topic and I knew for sure that I turned to the right person.

It is interesting in what way the inflation reduction is planned. From this post I understand that due to the reduction in the reward pool. Interesting. Of course, the developers predicted a constant increase in the price of STEEM, so the reduction of the reward pool is logical.

Is it fair to say that approximately 420271729.51 * 0.07 = 29419021 STEEM will be "printed" during 2022? (80,600 STEEM/day)

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remlaps (74) 2 years ago

Is it fair to say that approximately 420271729.51 * 0.07 = 29419021 STEEM will be "printed" during 2022? (80,600 STEEM/day)

That's a decent estimate, but it's more complicated than that. And as I think about it, I guess I don't even completely understand all of the relevant factors. Some of the variables that come to mind include these:

It's compounded countinuously, and the rate decreases every 250k blocks (~8.7 days). It's 6.99 percent now, but it was 7.41% a year ago and it'll be 6.57% a year from now.
Conversion from SBD to STEEM increases current supply and removes collateralized STEEM.
If we switch back to SBD printing for author rewards, I guess the current_supply growth will slow but virtual_supply will continue (as collateralized STEEM).

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o1eh (79) 2 years ago

Thank you for your clarifications. Now it is more clear to me.

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remlaps (74) 2 years ago

I guess this is the code that does it:

  auto new_steem = ( props.virtual_supply.amount * current_inflation_rate ) / ( int64_t( STEEM_100_PERCENT ) * int64_t( STEEM_BLOCKS_PER_YEAR ) );
  auto content_reward = ( new_steem * props.content_reward_percent ) / STEEM_100_PERCENT;
  if( has_hardfork( STEEM_HARDFORK_0_17__774 ) )
     content_reward = pay_reward_funds( content_reward );
  auto vesting_reward = ( new_steem * props.vesting_reward_percent ) / STEEM_100_PERCENT;
  auto sps_fund = ( new_steem * props.sps_fund_percent ) / STEEM_100_PERCENT;
  auto witness_reward = new_steem - content_reward - vesting_reward - sps_fund;

So, they create new_steem as a percentage of virtual_supply, and then split that up into content rewards, vesting rewards (interest), SPS funding, and witness rewards.

The pieces that converts author rewards and SPS funding to SBDs happen a bit later.

Over the year, then, the virtual steem supply will increase by ~32,689,312 (466990176 * 0.07), and that will be split among VESTS, STEEM, and SBDs. But token burning and SBD -> STEEM conversion can also alter the mix, and it's also effected by the changing price of STEEM.

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o1eh (79) 2 years ago

Thank you 🙂

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RE: Burned tokens, rewards, and inflation summary November 19, 2022 - Total burn estimates: 168,687K STEEM/SP and 63 SBD

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