RE: Thinking out loud: When should the witnesses start paying interest on SBDs in savings?
So, if we increase the SBD_supply, that increases the virtual supply, and that increases the new_steem to be distributed in the form of rewards.
OK, looking at those formulas, wouldn't the SBD inflation rate need to be huge to have a non-negligible effect?
In the abstract I think the chain would probably be better if the witnesses could dynamically adjust some of the economic settings (inflation rates, how much is allocated to each pool, etc.), but obviously that's not how things currently work. Since this one is one of the few settings that currently can be altered without a fork I can see why it's worth considering whether anything useful can be done with it, but to me it seems like the wrong tool for this job.
The SBD was intended to be stable, not to float with market rates
Well, it was intended to float with market rates with the expectation the conversion mechanism would incentivize it float toward $1. Perhaps that's a pedantic point, but a lot of people seem to think there should be a centralized mechanism to maintain the peg even though the original decentralized idea is better (most of the time when I suggest we'd be better off if the price went below $1 people act like that would be a crisis rather than the normal thing that the chain is already designed to deal with). Of course the original idea was based on the premise that there would be some economic sense to what was going on, instead the prices of small-cap coins seems to be dominated by the actions of manipulators, speculators, and fads rather than conventional economics.
I haven't worked through the numbers, but I do think they'd either need to be fairly large or long lasting or both. I mean, back-of-the-envelope, 20% would double the supply of SBDs in 5 years (not counting compound interest or SBDs not in savings).
I agree with this. But yeah, not happening any time soon.
Yeah, I don't necessarily disagree. That's sort of why I titled the post and phrased the question the way I did. Basically, we have this parameter sitting out there that everyone is ignoring, and it has potentially wide-ranging influence. I don't think we should just turn it on and see what happens, but I think the witnesses and the rest of the community should start thinking about how and when to make use of it.
This is another point. The larger the market, the harder it is to manipulate. I've never traded in penny-stocks, but I have the impression that a lot of manipulation happens there, too.