Where SMT performance affects STEEM performance really depends on what people do with that token. If they sell it for STEEM they need STEEM which drives to STEEM demand and price. If they then sell the STEEM for another coin or fiat they send the price down. Even so I believe that is what is called increasing the velocity of the currency and that drives up the price (I think). But the whitepaper does actually talk about the scenario where an SMT has no effect on STEEM price.
One effect I wish did propagate from STEEM to tokens and perhaps back is reputation. While I would expect a 1:1 translation I feel like there are many aspects of reputation that do translate 1:1. Others may be community and content specific. Someone who is an expert in astrology may know jack-**** about science and would have no inherent science based reputation. And visa versa of course. No astrology SMT wants some highly reputable scientist barging in and down voting all their content.
But reputation also has aspects like are you an annoying bot and do you post spam or so you troll incessantly. These probably translate across all communities (although what one community considers trolling can vary). And of course people may not want to maintain identity between STEEM and a SMT token. I have to admit I wasn't paying attention when I read the whitepaper but I think it is assumed identity is distinct for ever SMT. That is I'm not a STEEM user who owns multiple types of SMT tokens, I'm multiple users, distinct and separate.
I haven't finished reading the whitepaper, but I did finish reading the whitepaper for the bancor protocol which another commenter said that SMTs were partially based on. In their system, the new currencies have a value that is inter-related to the base currency (Steem, in this case). However, SMTs may not be using the same principles.
Reputation is a key issue, yes, I agree - I posted about that with regards SMTs already.
Interesting. I was working on a post about reputation too but decided it needed some diagrams and didn't get around to doing any. It was basically an elaboration on what I said above. Maybe having reputation was considered so obvious they didn't include it? But I would say it is essential. Allowing a token to (optionally) inherit or seed its base reputation from STEEM or another token would be great IMO and allow minimizing of trolling and spam.
In the back of my mind I recall hearing how reputation was a function of Steemit rather than Steem - but I might be mistaken.
I think you are probably right since there is only one mention of "reputation" in the Steem whitepaper https://steem.io/SteemWhitePaper.pdf and it is not about the reputation we are talking about. I suppose that SMT using sites could still look at reputation on Steem or elsewhere - if they can positively correlate two identities across the networks.
Also came across this post that explains the logarithmic calculation of reputation and that is stored on the blockchain: https://steemit.com/steemit/@digitalnotvir/how-reputation-scores-are-calculated-the-details-explained-with-simple-math
I take that to confirm what I said, that any external app could query your reputation if it can confirm your id - presumably via something you sign with one of your keys that would verify your id.
This brings up a further issue that needs clarification. Do sites that operate SMTs require their users to have a steem user id (that could be used to login to steemit, for example) - or not. I imagine that such a username/id would be required, but I haven't seen anything about mechanisms for perhaps autocreating the names for people who are members of your site, but not of steem/steemit.
Additionally, there is the question of whether posts to your site will be visible in Steemit or not - which is something else I haven't seen mentioned anywhere that I have looked yet.