RE: Where Does the Money Come From? - Ambassador Toolkit Item
That's a great point and I had to do a bit of digging...and I might be off on my interpretation here. From the white paper:
The majority of inflation is actually an accounting artifact rather than true reallocation of
wealth. 90% of non-SMD inflation is distributed back to existing holders of STEEM proportional to the STEEM value of their SP balance, making inflation more of a “split”. Only about 10% of non-SMD inflation redistributes ownership in the network.
My understanding is that the interest earned on SP occurs even with zero site activity (like posting or voting.) It's a mechanism to basically offset the inflation caused by new Steem created each day, so those who have Steem locked into Steem Power for the 2 years don't lose value on it.
Because 90% of all STEEM created is distributed back to holders of SP, the result is similar to
having a 2:1 “split” every year rather true inflation.
I view this as a way for holders of SP to maintain it's overall value while the new Steem is created....essentially providing more Steem/Shares to offset the slightly lower Steem price due to the daily created money.
I've not run numbers myself on if this merely maintains current value of holdings versus increasing the value.
I went back and read the white paper in its entirety... and I think you are exactly right. The 90% is independent of any activity on the site... so really with the 90% and curation rewards, one can earn quite a bit of "interest" on SP over the course of a year...
Glad that's how you read it too! This way i don't have to edit, lol.