According to the STEEM blockchain design, the current inflation rate of STEEM is about 8.6% per annum and about 2.1% per quarter.
Of course, (although inflation volume itself can increase) the inflation rate itself is designed to steadily decline. (0.01% decrease for every 250,000 blocks generated, and finally fixed at 0.95%)
However, the actual inflation rate is now much higher than the design.
After estimating STEEM's actual annual, semi-annual and quarterly inflation rates in 2018, we will look at its characteristics and consider the implications.
Aim of Analysis
Estimates of actual annual, semi-annual and quarterly inflation rates of STEEM in 2018
Its features and implications
1. Estimates of actual annual, semi-annual and quarterly inflation rates of STEEM in 2018
(1) Estimation method (may be omitted)
① Calculate SBD supply trend by date
② Calculate STEEM supply trend by date
③ Estimate STEEM Current Supply at major comparison points
④ Calculating inflation rate for the period
⑤ Compare the calculated inflation rate with the design level of the STEEM blockchain
(2) Estimated value
① quarterly / semi-annual / annual inflation rate table
② STEEM / SBD supply balance and price of major points
The SBD / STEEM price are based on coinmarketcap figures.
2. Its features and implications
① Quarterly inflation rate VS design
SBD issuances soared in the first quarter of this year due to surging STEEM and SBD prices at the end of last year, while STEEM prices fell somewhat, so the inflation rate temporarily exceeded the design level in the first quarter. However, the inflation rate in the second quarter was lower than the design.
In the third quarter, STEEM prices fell below US $1 and new SBD issuances were discontinued. Instead, a liquid STEEM has been issued and the SBD supply balance has already increased considerably, so the inflation rate has significantly exceeded the design level.
The inflation rate in the fourth quarter, where the STEEM / SBD price plunged, was 5.78%, exceeding the design level of 2.1% by more than 2.5 times.
② Semi-annual inflation rate VS design
Despite the high volatility of STEEM / SBD quotes and volumes, the first half inflation rate was 4.17%, similar to the design level of 4.2%. STEEM fundamentals were still in good shape.
However, in the second half of the year, STEEM fundamentals deteriorated sharply, and the inflation rate rose to 9.46%. This figure is as high as 19% per annum.
③ Annual inflation rate VS design
YTD(Year to date) inflation rate in 2018 is about 14.0%, which has already exceeded the design level by more than 5%.
In general, the interest rates of countries that receive relief from the International Monetary Fund (IMF) tend to temporarily rise to 10-20%. Taking this into account, STEEM's high inflation rate in the second half shows that STEEM fundamentals are rather sluggish.
If the STEEM price is still the same, the amount of SBD supply balance converted to STEEM can be significantly increased due to the natural drop in the STEEM nominal feed_price (SBD supply balance of 12.5 million units, STEEM nominal feed_price is changed from 0.4 $ to 0.3 $ In the case of natural decline, the amount of STEEM converted will increase by more than 10 million STEEMs.) The actual inflation rate in 2019 may well exceed the design level of about 8%, which is likely to rise to more than 10%.
The worry is that if the STEEM price declines further, the inflation rate may be even higher next year.
As you can see above, the actual inflation rate of the current STEEM block chain is well above the originally designed inflation level, and if the current STEEM price is maintained or declining, the real inflation level after next year may be well above the design level.
Of course, since the blockchain industry to which STEEM belongs is a growth industry, the inflation rate of 20% is not necessarily high. Also, the current situation may be temporary. But the problem is that it is outside the originally designed ecosystem.
At present, STEEM can be considered to be virtually under slumpflation. The term "slumpflation" is used when the recession and inflation are more severe than the stagflation situation. It may be similar to the situation in which the recipient countries of the International Monetary Fund (IMF) have devalued their currencies.
After World War I, Germany was hyperinflationary so that it was able to barely stabilize the economy through so much stronger currency reforms.
If a country is not hyperinflationary, but close to the level of slumpflation or the relief of the International Monetary Fund (IMF), then it is difficult for that country to break out of the situation by improving external factors. Internal high-intensity restructuring and implementation of innovative measures should be accompanied.
Likewise, in addition to expecting improvements in external factors, such as the boom in the crptocurrency market, STEEM will need to follow high-intensity restructuring and innovative measures.
Recently I saw some of the major Dapps that raise the voting weight for loyal users.
It is time to try to harmonize with systematic big changes of STEEM ecosystem in small things like the above.
The Data and Queries
I did this analysis by connecting to the @steemsql db with MSSQL client(Microsoft SQL server management studio), Excel.
Refer to My Github
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(STEEM) All we need is time? Nope. More innovative action is needed.