A lot of the inflation comes also from the Steem Dollar (SBD) pegging, which is not ideal especially in a bear market.
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A lot of the inflation comes also from the Steem Dollar (SBD) pegging, which is not ideal especially in a bear market.
The inflation rate of steem includes SBD emission, no?
Yes, SBD emission is included, but the problem is SBD is like debt which can increase or decrease depending on the market situation. If SBD and STEEM prices fall, converting SBD to STEEM can create additional inflation. This is what happened / happens during the past bear market.
Do you men if SBD falls below $1 but the total market cap is less than 10% of that of steem's? Or what market conditions are you talking about?
yes, exactly, if SBD falls below $1, people can still convert their millions of SBD to Steem, which can increase the Steem inflation a lot. Exactly that happened during the bear market. Unfortunately there is no function to convert Steem back to SBD if SBD rises above $1.
Well, do that math. There is only 9 million sbd in existence, of which $9 million worth of steem is accounted for. Any excess steem that is created due to the spread between sbd and 1 dollar is minimal. Especially considering there are 320 million steem outstanding. I doubt that even increases the overall inflation rate by 1%.