You are viewing a single comment's thread from:
RE: Graph to analize total supply of SBD over time with some interesting observations
Fun fact: STEEM price affects directly the SBD supply generation as well. So I would actually say the causation is reverse. Because, STEEM rewards pot is actually fixed, and it's in STEEM. When payouts happen, at 50/50, STEEM gets converted to SBD at the price feed rate (STEEM's USD price). Thus, when STEEM's price is 5 USD, SBD is printing at 5x the rate that it does compared to when STEEM's price is at 1 USD.
You can see details from my analysis here.
I read the post you linked to and the posts it linked to as well, and they were all very informative, and I highly recommend them to anyone who enjoys really trying to understand the inner workings of Steem. You bring up a very good point that I didn't think about when I made my post, but it is important to mention that as the STEEM price goes up, the SBD printing/inflation goes up as well. However, I'm not sure if I understand what you mean by "causation is reverse", but I think we are on the same page, but please let me know if you see any flaws with the following reasoning. When the SBD price spikes from $1 to being much greater than $1, then it makes people want STEEM more because, for example, if STEEM is at $2 and SBD is at $1 then a 50/50 author reward worth a total of 2 STEEM results in a payout of 1 STEEM and 2 SBD which has a dollar value of $4 (i.e. $2 for the 1 STEEM plus $2 for the 2 SBD); howeer, if SBD price surged from $1 to $9, then in the same example above that same 50/50 author reward would result in a payout with a dollar value of $20 (i.e. $2 for the 1 STEEM plus $18 for the 2 SBD). Based on this example, the income generating potential of STEEM Power went up 5x which makes it a lot more desirable to have STEEM Power with SBD at $9 than with SBD at $1 which is why I think a surge in the price of SBD should increase the demand for STEEM which should apply upward pressure on the price of STEEM, and then, as you pointed out, a higher STEEM price will result in more SBD printing/inflation in addition to the inflation resulting from everyone wanting to do only 50/50 payouts and nobody wanting to use the 3.5 day SBD to STEEM conversion process. Is this the way you see it too?
Oh holy cow, that's funny that it still works out that way. Was missing the observation of SBD price effects. It seems to check out. I see what you are saying.
The subsequent SBD supply growth should eventually than being the price down gradually also. But yeah so far it's... Slow.
Yes it is kind of funny how both effects can be happening at the same time. I think the effect you mentioned of "STEEM price going up results in more SBD printing which pressures SBD price down" has a longer lag time which seems to be maybe around two or three or more months (e.g. the "Low" SBD price was greater than $1.10 for 73 consecutive days from 4/25/2017 to 7/6/2017 and also for 66 days and counting from 11/23/2017 to present.) while the effect of "SBD price going up results in purchasing power of 50/50 rewards going up which pressures STEEM price up" may have a lag time of maybe a week or so as people start noticing their 50/50 post rewards have more purchasing power than normal.
:(
Also, I would really like to hear your thoughts on the @lukestokes article about pegging the SBD. I'm not in favor of conversions in both directions, and I left a comment where I mentioned the "Steem community holding the bag" and I was wondering what you thought about the post by @lukestokes and my comment.