Steem blockchain inflation review for Q4/2024
I guess this is the sixth time I've published a quarterly inflation post. Here's what I wrote at the beginning of last year's post:
As 2023 comes to a close, the price of STEEM has spent the last month or so flirting with the SBD print threshold where 10% of the market capitalization is allocated to debt in the form of SBD. As a result, the blockchain has printed SBDs for author rewards in fits and starts. This dynamic leads to some interesting effects on Steem's observed inflation rate.
It's true again in 2024. Also, with 17 minutes left in the year (GMT time), we still don't know for sure if the STEEM price change for December and for all of 2024 will be positive or negative. It's currently positive for both, but a swing to the negative side is not inconceivable.
Based on the projected inflation, we would have expected daily STEEM production to peak during February of 2024. Thanks to token burning, however the actual peak arrived three months early, so it has now been declining for about 14 months. A trend which would be projected to continue until 2037 (barring rule/parameter changes by witnesses).
As in previous posts, let's first look forward at the expected inflation amounts.
1. Here's what would be expected for the next few months, based on current values:
| Date | Block # | Inflation Rate | Supply | New Steem Per Day |
|---|---|---|---|---|
| 2025-01-01 | 91750000 | 0.061100 | 530615068 | 88823 |
| 2025-01-10 | 92000000 | 0.061000 | 531386034 | 88806 |
| 2025-01-19 | 92250000 | 0.060900 | 532156855 | 88790 |
| 2025-01-27 | 92500000 | 0.060800 | 532927526 | 88772 |
| 2025-02-05 | 92750000 | 0.060700 | 533698044 | 88754 |
| 2025-02-14 | 93000000 | 0.060600 | 534468405 | 88736 |
| 2025-02-22 | 93250000 | 0.060500 | 535238605 | 88717 |
| 2025-03-03 | 93500000 | 0.060400 | 536008640 | 88698 |
| 2025-03-12 | 93750000 | 0.060300 | 536778507 | 88678 |
During the last year, the new STEEM per day declined by about 1,062 from 89,885 to 88,823. At the end of 2023, it was only expected to decline by about 250 or so during 2024. The additional ~800 per day decline results from burned tokens, disinflation caused by rising STEEM prices, and from missed blocks by witnesses.
2. And here's what the full visualizations of expected new STEEM per day look like:
3. Looking forward, here are the currently projected values for 1, 4, 8, and 12 years.
| Time span | New STEEM per day | Total Change | Change % |
|---|---|---|---|
| 1 Year | 87,774 | -1,049 | -1.1% |
| 4 Years | 79,494 | -9,329 | -10.5% |
| 8 Years | 56,958 | -31,865 | -35.9% |
| 12 Years | 23,919 | -64,904 | -73% |
However, it's important to remember that these can change according to (at least) the following factors:
- When the STEEM price goes up, the daily new STEEM will go down and vice versa - but only when the price of STEEM remains above the haircut threshold.
- Burned STEEM will lower the new STEEM per day.
- Missed blocks by witnesses are effectively the same as burned STEEM.
- Rule / parameter changes by witnesses could change things in any imaginable manner.
- Perhaps there are other factors that I'm not aware of.
Since the current price is only barely above the haircut threshold, we're very close to the upper boundary of the curve, but there is a little bit of room for the STEEM price to raise the inflation, maybe by a few hundred STEEM per day.
4. Here's a forward looking visual with projections for daily new STEEM, expected virtual supply, and the blockchain inflation rate.
As before, more than half of the STEEM that would be expected to exist in 30 years has already been distributed (54%, up from 51.8% last year).
5. Now let's look backwards using data from SteemDB
5.1 Q4/2024
During the last quarter, the blockchain inflation rate declined from 6.21% to 6.11%, and the observed inflation rate was just 4.24% (vs. 6.53% scheduled and 6.39% observed a year ago).
5.2 All available data
From June 26 until today, the blockchain interest rate declined from 6.33% to 6.11% and the observed rate was 5.32%.
Conclusion
So, in summary, due to token burning and time spent with the STEEM price above the haircut threshold, it looks like the decline in daily new STEEM during 2024 was approximately 3x the expected amount.
Looking forward, we might expect next year's decline to be about the same as this year's, with accelerating declines after that (See Steem's two halvings: What does Bitcoin tell us about Steem's future?).
It's important to remember that these projections can all change, depending on the factors listed above.
Caveat Lector: Any/all of these reports may contain mistakes, so be suitably skeptical.
Happy New Year to Steemizens, one and all!
Thank you for your time and attention.
As a general rule, I up-vote comments that demonstrate "proof of reading".
Steve Palmer is an IT professional with three decades of professional experience in data communications and information systems. He holds a bachelor's degree in mathematics, a master's degree in computer science, and a master's degree in information systems and technology management. He has been awarded 3 US patents.
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Reminder
Visit the /promoted page and #burnsteem25 to support the inflation-fighters who are helping to enable decentralized regulation of Steem token supply growth.
Steem inflation is very low. Almost equal to US inflation. Steem just needs a little promotion.
0.06 SBD,
0.00 STEEM,
0.19 SP
It is interesting to observe the macroeconomic indicators of the blockchain. it's good that you are doing this analysis.
Happy New Year!
0.05 SBD,
0.00 STEEM,
0.18 SP
Happy New Year! Yeah, just a happy new year… 😊
0.05 SBD,
0.00 STEEM,
0.17 SP
lol. Or Happy new year...
0.04 SBD,
0.00 STEEM,
0.14 SP
It is very likely that if SBD can continue to be launched, it may be very valuable to everyone who writes a post here. Because at the end of 2024 the launch of SBD was a few days but after that SBD was closed again. what is the beginning of 2025 SBD will be opened to as usual
0.05 SBD,
0.00 STEEM,
0.17 SP
We'll see what happens. Last year, it looks like they stopped printing in January, then started again in March. But, there's no reason to think it'll behave the same way this year.
0.00 SBD,
0.00 STEEM,
0.01 SP
If this is the case, it may not be positive for SBD, usually SBD is checked once a year, it has also been opened SBD in 2023. because I am not very active so I don't know much about this but after I try to read your post. Maybe you're a senior on the Steemit platform, maybe you understand everything better. Greetings and Happy New Year, may you have a nice day when I
0.06 SBD,
0.00 STEEM,
0.20 SP
Thank you, @nishadi89!