You are correct we can not predict what reaction investors will have in that hypothetical scenario. In the short term we will see a small reduction in the supply (after all just between Poloniex and Bittrex there are is already about 45 million steem that can be traded which amounts approximately to 1.8 years of inflation at the current rate).
You are viewing a single comment's thread from:
Inflation is less the issue than 41% of the total supply which is always going to be a massive amount with enormous direct and indirect effects on the market. Inflation is currently about 8.5% per year so 41% is more than 4x as much as one year's inflation. That is, if Steemit decides to divest by selling over a 4 year period that is more than doubling the inflation. And that is not implausible, as they have been selling regularly since the start.
I agree, divesting the stake will have a direct effect on the tokens available on the market and therefore on the price. Even if most of it is powered up it will effectively dilute everyone else (depending on how it is allocated). The real issue is the existence of that massive stake. To be honest I would prefer that Steemit burn their stake even if it means a short term reduction in the rewards pool.
In Steem terms, yes. However, I'd wager there'll be a massive pump shortly following a burn (that's just how the crypto markets work). It'll stabilize somewhere, no one knows where, but I'm fairly confident it'll more than offset the drop in reward pool in Steem terms.