if i understand it correctly SP is diluted at 10% a year if your account stays passive. As for me, this is single biggest selling point of steem. This is paradigm shift, because we will have organizations like were most influental people are actual users and contributors and not passive rich 1%
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Yes, the dilution is complete genius. The passive rich can park their wealth in SD and earn interest to preserve purchasing power, but then they loose influence. If they want to maintain influence.. they have to work for it! It's awesome.
The problem? Steem Dollars aren't currently properly pegged to the USD.
Steem Dollars are working very well, it just takes the market some time to grow up around it. Like a toddler getting its balanced. The market learns from experience more than intelligence. In recent days steem dollar volume has been increasing and it has been trading at 96 to 97% of the dollar. About a credit card processing fee. It will only get better.
We saw the same thing with bitUSD - the peg is very dependent on liquidity. I'm personally amazed at how well the peg is working given how new the asset is. With everything the devs learned working on bitAssets I'm 100% confident the SD peg is only going to get tighter.