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Steem Powerdown needs to take 1 week // Creating a major sink for STEEM tokens

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lordbutterfly
68
28 days ago5 min read

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For a while now i have been looking at STEEM, trying to be objective about its strengths and failures.
Outside a few other currencies i own im invested in STEEM close to 80% of my portfolio. Im, you can say all in with STEEM for better or for worse.
Still, i am aware of a massive issue STEEM currently faces. One of the biggest ones being....

INFLATION.

The idea Steem creators had was simple:

If the inflation is kept at a reasonable level and the platform grows, increases in value, grows users and use cases, the inflation wont be a problem due to demand.

But what happens when the demand is low and youre in a bear market?
Well then those that might want out cant leave right away because their SP is locked for 3 months.
"Got eeem!"

Thats a very defeatist way of thinking.

What those with this line of thinking tend to forget is the other side of the coin... What if this is one of the things keeping investors away from STEEM.
And i know for a fact that it is.
Not being able to access your funds in a extremely volatile market like this means that investors will be reluctant to power up.

"Oh but LB powering up is required if you want to make that Sweet curation returns!"

Im fully aware of that and i agree but there is an option to consider that will allow for all of that but help with the inflation problem and help with increasing demand..

CREATING A POWERDOWN COST.

Ive talked to Andy in the Steem telegram the other day and he seems to claim that holding STEEM as "cash" i.e. not powering up is a good choice because STEEM is "good money".
That is completely false.
Not powering up your STEEM means that with the 8% inflation right now + the loss of potential profit from not powering up means that holding STEEM as a means of payment, not powered up is a really bad idea.

"Oh by LB then they will power up their STEEM if its a bad idea!" That is awesome!"

NO.
They just wont buy it.

If lets say someone opens a business here, who is it they want to sell their products and services to? Is it Steem speculators that have no connection to the community that buy and sell on the market or is it invested Steemians that are here for the long run.
I think the right answer is Steemians.
If you are a Steemian and are here for the long run, like me, most of us will be inclined to power up, increase our influence on the platform and protect our investment by powering up.
Is it easy for us to access funds to make the purchase of products and services then?
NO.

We want to accumulate and even if a opportunity presents itself accessing liquidity isnt easy. It takes a lot of time.
Sure, you could claim that this could encourage people to buy into with more fiat but i find that not to be the case most of the time. I want to purchase Steemmonster cards and i dont have any Steem?... Ill just use my Visa instead of buying STEEM, paying fees, and having to take additional steps.
I bought as much crypto as im comfortable with but with the crypto i have im willing to do something with it.

What about investors?

Would they not be more inclined to power up if they know they could make their funds liquid much faster then 3 months?
Would this not offer a huge advantage to STEEM as a token?

I can powerup and earn 15%-20% APR but my investment is protected if the market enters times of high volatility because i can powerdown fast.

I think it would.

What is the benefit to the STEEM ecosystem then if this is allowed?

Well its simple. YOU ADD A POWERDOWN COST. Adding a powerdown cost that would send to @null 10%-15% (or whatever % would be found best) of the powered down stake.
The powerdown cost instead of it being a fixed % could also be calculated from the average over time powerdown figures. Increased powerdown percentages, increasing the powerdown cost.

Steem with its high inflation, right now has an extremely poor sink, or none to speak of.
Adding cost to shortened powerdown times creates a very significant sink that would tackle inflation and not only help protect the investment of those that want to powerdown and sell but would also help reduce inflation for those here for a long run.

Thinking that everyone would sell during a bear market is a very defeatist way of thinking and a wrong one. Many, if not most altcoins that arent inflationary in nature that require no powerdown have held their marketcap positions much better. You can sell those tokens freely can you not? If powering down is such great protection from a selloff then why do other altcoins that have no staking/or shorter powerdown times preserve value so much better then Steem?

STEEM has plummeted down to 80 in MC, slowly but surely, inflation being one of the main reasons in my opinion.
The fear of investors that comes from it all.... that if they buy Steem, holding it liquid they lose $ due to inflation and if they power up to offset the loss, they lose control over their investment.

Hmm, i think staying away for me is the smarter option. This is too risky.

This change is a must in my opinion because the supply of Steem is steadily increasing and the only way for it ever to increase in price is if the demand can deal with the high inflation and that is a "big if".

This change would attract investors and it would help reduce the inflation significantly.

Let me know what you think.

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