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RE: My Thoughts and Theory on Steem Price Sustainability
Last year there were 250 million Steem in circulation. Now we have over 300 million. This is a 20% increase. We printed way too much SBD during the bull run. Our inflation rate is unacceptable. 25 million of that was printed in the last three months and we still have a ton more SBD we have to liquidate.
That is very interesting... how have we let this happen? I understood the inflation was 8.5%. Or was that to bring he sbd price back to 1 usd?
Say we print a bunch of SBD when Steem is $10 a coin, then the value of Steem crashes to $1 a coin. Once SBD starts getting converted into Steem we're forced to mint ten times as many Steem coins as we originally thought.
Need the ability to short sbd. That will help keep sbd at 1 usd and reduce sbd payouts. But that basically means that next time steem is high and the price drops, the communities solution is to print more steem... and there is a mechanism built in to make that happen.. well that’s pretty messed up...