STEEM inflation increased to 250%
Have made a couple of posts about this in the last few days and have not got any responses confirming or denying this. From the comments I have got and the searching of recent posts, as far as I can tell everyone is still under the impression that STEEM's inflation rate is 100%.
Backgrond
From the white paper
STEEM is constantly increasing in supply by 100%
- Steem Power rewards: For each STEEM created by the above rewards, 9 STEEM are
divided among all Steem Power holders.
So Steem is created at a rate of 100% a year, and discounting rewards, SP should increase by 90% a year.
The problem
So I noticed when looking at the steemstats website that my SP seemed to be increasing at a rate over 200%. At first I thought there may be a problem with the calculation of the rate, but I can confirm that the numbers on the site are correct up to a week's range, ~4%, which would extrapolate to >200% a year.
Using numbers from the website steemwhales the STEEM:SP ratio is 37:963 or 96.3% of the value in the site is in SP, so if all of that SP is increasing at a rate of ~225% there must of been a change to the 100% creation rate of STEEM. If the 9 to 1 ratio is still being held that would make the STEEM inflation rate ~250%.
I reached out to @jesta the user that built and runs steemstats and he seems to confirm that the 100% inflation rate may be off
What the program is doing is watching your accounts as long as you have the page open, and determining how much SP per second you're increasing. Then it extrapolates that number out to a year worth of seconds.
I'm curious to know exactly why they say 100% but it looks like 200%+ as well.
Conclusion
I have not seen an announcement regarding any change in the creation of STEEM. If my findings are confirmed (A big if) it would not affect the value you have in Steemit if your value is in SP, but if you are holding STEEM it would be devaluing at a much higher rate than it is designed to (50% a year).
A thought I have that could in theory explain it is, what happens when you power down, does your SP continue to increase while powering down? If not the extra SP could be distributed across all SP holders that are not powering down. If this explanation is correct it would mean ~59% of all SP is currently powering down. HOLY CRAP I thought I'd look through some of the whales on steemwhales and indeed 7 out of 10 of the biggest whales are powering down. Is this a problem?
I used steemstats to look at one of the powering down accounts and there SP seems to also be increasing at a rate of ~225% a year, so that would seem to disprove the possible reason I put forward.
I believe the current mining rate is 800 STEEM per minute (took this number from this post by @hisnameisolllie). So in a year from now, 800 * 60 * 24 * 365 = about 420 million new STEEM will be mined. This is, if the rate does not change - I believe it should go down at some point.
Now if we look at steemd.com current supply of STEEM is around 135 million, so inflation is roughly 420 / 135 = 211%, which is close to your number.
I believe this state of things is temporary, the higher mining rate was introduced to accommodate the influx of new users. Once user base stabilizes, it should return to 100% APR as stated in the white paper.
oh ok thanks, is the system designed to be 100% apr so that at some points we will have less than 100% inflation rate?
Does that mean holding STEEM at some times of the year are worse than other times?
thanks for the answers
In theory yes, it probably does; but in practice, STEEM price fluctuates wildly for speculative reasons. This difference in inflation numbers is insignificant in comparison.
Did the devs announce anywhere that they were upping the inflation rate? If not, that's very bad form.
I didn't see any announcement, but it may just be standard. I think the white paper needs to be updated when each change is made.
Any change from 100% is not standard, since that's what they promise in the white paper.
I tried to verify the mining rate from steemd.com data and find out that the actual rate is about 600 STEEM per minute. I wrote a short post with calculations: @fooblic
I'd also like to point out a flaw in how steemstats currently calculates: if you mine a block or receive a reward for posting/curation while the SP calculations are running, it will also factor that into the growth.
I've had steemstats running for the last hour, and I mined a block recently, and my percentage was showing 350%. So that was totally incorrect.
Just be aware that if you earn anything it pretty much messes up the estimate :)
yea thanks, you make that clear on the site, but it is worth repeating if people read this and check their own. I took my measurements over about 20 mins and checked the users I was measuring didn't receive any rewards in that time. Do mining rewards show up in wallet?