RE: APR anyone?
Steem inflation is about 8.5% per year (declines by 0.5% per year). 75% of that goes to reward pool. Of that 75% goes to authors. Of that 50% (max) goes to SBD. This comes out to 2.39% per year (my citing of 2.9% earlier was a mistake) inflation emitted in the form of SBD.
Ah! But that 2.39% translates to 28.1% of all newly created supply, so stopping it means you would be producing 28% more STEEM, and no SBD, which is fairly significant. Yes, the longer we go, the less overall significance it has, but considering the likelihood that more than half the STEEM supply is locked up in SP and not on the market, that 28% reduction in supply rate could have an effect if carried on for a prolonged period.
I get the conversion dilemma, so it's a case of reduce the debt ratio first, and then look at returning SBD to the peg.
The next item would then need to be how to prevent the debt ratio getting back up over 10% again, while maintaining a stable $1 SBD peg. If that can't be done, we may as well not have SBD at all. Get rid of it....Problem solved.
The denominator of the (debt or SBD) ratio refers to total market cap. The total amount of STEEM produced per year has no relevance. As I noted, in a month, the ratio of 5% either goes to 5.19% or stays at 5%. Or if you want to add the 0.19% to the denominator, sure, then the ratio goes to 4.99%. Still very litltle difference. If you want to let it play out for a year, then it either goes to 7.39% or stays at 5% (4.88% if the STEEM is added to the denominator). That starts to sound somewhat significant but remember this ignores all conversions, which in a well functioning system (no big pumps) would certainly be happening over the course of a year, and certainly there would almost always be huge price changes in a year.
Also, producing SBD does not mean producing less STEEM! The STEEM is still produced, just in the form of SBD (which, in general, is later converted into STEEM). It is the same as producing the STEEM but then temporarily locking it up.
No such luck.
There is no satisfactory way to get rid of it. You can't simply erase the tokens (obviously) and you can't eliminate the conversion option that current holders paid for without severe damage to any sort of social contract. You can't eliminate printing because that would give SBD holders a huge one way bet on a pump that is backstopped by (and therefore at the expense of) the rest of the Steem economy. Anyway, if it did pump then just not printing for no good reason is rather stupid because creating new overpriced-at-birth SBDs allows SP holders to extract revenue from SBD speculators.
We're stuck with it. We do the best we can to make it work as well as possible, but that isn't likely to be perfection, just a set of useful compromises (and IMO this is good enough to add a lot of value even being imperfect). Perhaps in the future there may be some sensible way to get rid of it, such as converting it to an SMT with a suitable dedicated reserve fund. This would require the SBD supply to become naturally very small, which might happen.
That is starting to make sense in some ways. So the longer the platform goes on, and the more STEEM and SBD is produced, the less power we (witnesses) have over the overall economy, and influencing anything via APR of feed biases?
I see where you're coming from with SBD. It's kinda broken being unable to fulfill its primary role consistently, but as you say, we're stuck with it anyways.
Thanks for taking the time to converse with me on this.