Why the need to dilute the supply of steem power if 9/10 of it are wiped out every 3 year?
Another question. Posts on the steem front page are being rewarded more $ than a week ago due to the steem price rise. It means that the mecanism in place rewards the same amount of steem per posts. This creates a situation where the more content is published the less rewards each posts will get. Wouldn't it be better to reward a certain amount of steem proportionally to the current steem price, so that the higher the price of steem goes the more post can be rewarded instead of the higher each post can get rewarded. Hopefully that make sense lol
The supply of STEEM is diluted to incentivize long term investment. Most Steem is created as SP, rather than liquid Steem. Unfortunately I don't have time to go into it further, but that is the quick and dirty.
There are a lot of mechanics at play, but it really is well conceived when you wrap your head around it.
Nobody is going to lock their wealth in SP when 9/10th of it is gonna be wiped out to counter high inflation rate, not even a dilution mecansim.
I don't have the numbers at hand but say today's ratio of posts getting a reward VS posts getting none is around 10 to 100. Now when millions of users uses the platform the gap will be gigantic with only so much you can pay with a mere 10% inflation.