Quote from: tombstone2 on April 10, 2016, 11:00:57 AM

Quote from: Grandpa Jones on April 07, 2016, 04:54:42 PM

Quote from: thereverseflash on April 07, 2016, 12:24:48 PM

The incentive to hold VESTS will fall dramatically over the next few weeks as the rate of change in the supply of STEEM falls.

Do you mean the incentive to hold VESTS or the incentive to create new VESTS from STEEM?

Bump

Maybe both?

In short, current conversion ratio is about 27:1, and the ratio is increasing by about ~~2:1~~ ~~4:1~~ 2.6:1 everyday. So the % speed of ratio increasing is decreasing, thus less incentives to convert STEEMs to VESTS.

Analysis:

Conversion ratio = STEEM : VESTS = TOTAL_VESTING_FUND_STEEM : TOTAL_VESTS

Every block, when the miner/witness got 1 STEEM as reward, 2 STEEMs are added to TOTAL_REWARD_FUND_STEEM, and 27 STEEM are added to TOTAL_VESTING_FUND_STEEM

Because block interval is almost constant, everyday ~28800 blocks are produced, so 28800 new STEEMs to miners and ~778k STEEMs to TOTAL_VESTING_FUND_STEEM. The ratio keeps increasing due to TOTAL_VESTING_FUND_STEEM keeps increasing.

* the speed of ratio increasing is linear if nobody deposit to VESTS or withdraw from VESTS. With current ~405K total VESTS, the ratio will increase by 778K:405K ~= 1.92 : 1 everyday.

* if every miner convert new STEEMs to VESTS, TOTAL_VESTING_FUND_STEEM will increase by STEEMs, TOTAL_VESTS will increase by (STEEMs / ratio), it's ~1066 VESTS with current rate, the speed of ratio increasing will be a little lower (about 0.005 : 1 with current supply).

* if every VESTS holders started converting VESTS to STEEMs, on average everyday 1 / (7 * 52 * 2) of VESTS will be converted, with current 405K supply, it's ~556 VESTS, so the speed of ratio increasing will be a little higher (about 0.003 : 1 with current supply).

//Update:
~~Due to POW reward, the daily inflation should be doubled, so 28800*2 to miners and about 4:1 of daily ratio increasing.~~

//Update2:
POW reward doesn't add to TOTAL_REWARD_FUND_STEEM at same time, so still 28800 * 2 to miners, but only 28800 * (2 + 2) * 9 to VESTS, so 1.15M of total daily inflation, about 2.6:1 of daily ratio increasing.