If 1/10 of the supply is being wiped every 3 years then we have a problem cuz SP tokens will only be backed by 0.1 steem.
This seems like a misreading of some aspect of the economics involved. What are you basing this off of?
Whitepaper says : In order to compensate for the ever increasing precision, the STEEM network performs a 10:1 reverse split every 32,000,000 blocks (about 3 years).
When they reached about 5b coins which is about 32 000 000 blocks the split will occur. After that SP tokens will be backed by 0.1 steem since 1/10 have been wiped.
But that is irrelevant. Reverse stock splits don't change the value of your holdings.
As I explained upthread, that is done only because Dan didn't reserve enough bytes of precision for token balances. He was "optimizing".
Actually, it can change the value in an extreme case. Let's say the market is dumped all the way down to 1 DOGE sat. Temporarily, the tokens would be worth 10 DOGE sats, but if no one puts up any bids, it will be right back down to 1 DOGE sat with illiquidity. So now your tokens are worth 90% less.
