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RE: Steem Blockchain Suggestion: Increased Liquidity - For a Price

in #steem • 8 years ago

@timcliff while I think scarcity has a part to play in the equation of perceived value of digital tokens, I would suggest to you velocity of exchange would do more and should be the primary focus on driving the price of STEEM.

In some ways it feels like we are experiencing a series of reactionary knee-jerk responses attempting to temporarily juice the price of STEEM. The talk of burning STEEM is very similar to stock buybacks with publicly traded companies. It's a very expensive way of destroying capital which could productively be deployed elsewhere or returned to shareholders as a dividend rather than wasted on overpriced shares by creating artificial scarcity.

I think a better idea to increase the short term perceived value of STEEM Power would be to drastically increase the interest paid to those who hold STEEM power. I think it's the more prudent of the choice between evils and it's the best use of the shareholders' capital.

...and considering we all allegedly own a piece of this....

8 years ago in #steem by
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     8 years ago  

    I think a better idea to increase the short term perceived value of STEEM Power would be to drastically increase the interest paid to those who hold STEEM power. I think it's the more prudent of the choice between evils and it's the best use of the shareholders' capital.

    Or proportionally reward long term holders with more STEEM POWER, similar to IRA vesting with an employer.

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     8 years ago  

    @steemquestions I would agree with this proposal because it creates a greater perceived value of STEEM and a reason to power up. Currently no such compelling reason exists.

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     8 years ago (edited) 

    In some ways it feels like we are experiencing a series of reactionary knee-jerk responses attempting to temporarily juice the price of STEEM.

    Not at all. This actually would likely have the opposite effect. In the short term, this would likely put downward pressure on the price of STEEM, and it would make price spikes less "spikey" because more people could become liquid and sell at the higher prices. In the long term though, this would likely benefit the network because there are a lot of STEEM tokens in circulation right now.

    The talk of burning STEEM is very similar to stock buybacks with publicly traded companies. It's a very expensive way of destroying capital which could productively be deployed elsewhere or returned to shareholders as a dividend rather than wasted on overpriced shares by creating artificial scarcity.

    It is a good analogy, but there are some differences. We are not 'buying back' anything. The owners of the SP already have their coins. All we are doing is allowing them to sell it quicker. There is no real 'cost' to this other than an increased supply of liquid tokens in the short-term.

    I think a better idea to increase the short term perceived value of STEEM Power would be to drastically increase the interest paid to those who hold STEEM power. I think it's the more prudent of the choice between evils and it's the best use of the shareholders' capital.

    Burning STEEM coins is essentially the same thing as paying interest, except it goes to all STEEM holders (not just SP holders). Returning the coins to SP holders as additional interest would be an alternate version that I would support.

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