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RE: Thoughts on a Proposal to Buy and Burn STEEM using the DAO
I was misremembering the interest rules. It's possible to pay interest on SBDs without a hardfork, but as I understand it now, interest would probably go for all SBDs, not just the ones in savings. @danmaruschak brought this point to my attention, here.
It still might be worth considering, but it changes things up a bit. I guess SBDs on exchanges and SBDs in the SPS would also earn interest.
How would we pay interest without a hard fork? Wouldn't this adjust the inflation rate, or at least redirect it?
AFAIK, it's managed by a witness parameter. I don't know the exact details, but I guess it's basically just an average of the value that's set by the 21 witnesses who validate blocks in each cycle. The blockchain was paying 10 or 15% interest on SBDs when I first got here.
To the best of my knowledge, the capability was never removed. It's just that the witnesses all set their parameters to 0 when prices went down.
Ah, this explains why my SBDs did nothing when I put them in Savings.
Wow that is really interesting. I have been here since 2016 and I never remember SBDs paying an interest rate... Perhaps it was coded but never actually run? I feel like I would have remembered SBDs paying interest...
I created an infographic back in November, 2016. Here's what I posted at the time:
Obviously, I'm hazy on details, but maybe interest accumulated and paid out once per month? No time now, but maybe I'll check later to see if I can find any payment transactions from the time period.
Update: Found one
Right!
#define STEEM_SBD_INTEREST_COMPOUND_INTERVAL_SEC (60*60*24*30)Once per 30 days and only if the SBD balance has to by modified.
Upvoted by soulfuldreamer through sc03 account
Yes, the interest rate is determined by us witnesses with the property
sbd_interest_rate.The interest rate contained in
dynamic_global_properties.sbd_interest_rateis calculated as the median of the props of the 21 witnesses who validate the blocks in the respective round.The SBD paid as interest are additionally produced. So even if no SBD are printed. This would of course be counterproductive (currently) .
The inflation rate would be increased by this measure (at least in the current situation), as the current SBD supply would increase and thus also the virtual supply.
There may be "sweet spots" where printing SBDs causes STEEM prices to rise enough that the virtual supply goes down, even though sbd supply goes up. But, I have no idea how to predict where they are, if that's even possible.
Yes, if the price rises above the printing threshold, things can look very different. The mechanisms in this situation are not quite clear to me either... but who really understands the market :-)