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RE: Steem 0.16.0 Status Update
When you initiate a power down it is encoded on the blockchain as a rate of VESTS/week (equal to 1/104 of your VESTS balance at the time you initiate the power down). Each week that fixed number of VESTS is converted to STEEM at the current exchange rate and added to your account balance. That rate of VESTS/week will not change for existing power downs. New power downs will use a rate 8x higher.
So we won't start seeing increased liquid supply until 1 week after the hard fork.
I believe that is correct. It is certainly correct with regard to power down requests. I'm only qualifying it because there are other changes in the hard fork and without thinking about it more carefully i can't be 100% none of them affect liquid supply in some non-obvious way.
Off the top of my head I think liquid supply will actually decrease during the first week after the hard fork, because posting rewards will be smaller. There may be other effects though.
EDIT: One way it might not be true is that buyers or others who receive STEEM might be less inclined to power it up quickly (since the difference between liquid STEEM inflation and SP effective inflation is vastly lower). So supply that becomes liquid for whatever reason might be more likely to stay liquid, even during that first week.
Yeah, all of that makes sense.
If 90% of STEEM interest is going to rewards instead of approx 6% to rewards.. wouldn't they payouts go up?
No because the total amount of interest is decreasing dramatically. After factoring in the drop in total interest/inflation as well as the increased share going to rewards, the net result is approximately a 40% drop in rewards. That assumes an unchanged STEEM price, which in reality could be higher or lower.
Ouch.
I have repeatedly and consistently urged doing this with a transition curve, economically equivalent to what was already happening with a fixed size reward pool coupled with high inflation. Rewards (both content and witness rewards) would be unchanged immediately when the fork occurs, but would drop to the eventual target over 1-2 years. This would avoid a huge, and I argue unnecessary, disruption of payout to authors as well as the disruption of witness-funded projects, while still ending up with the same long-run inflation of <10% within a year or two (and then declining eventually to <1%). The team and at least some community members have never bought into this idea however, and seem set on some sort of pitchfork-driven "Cut Rewards Now!" push.