[First Look] Steem inflation visualization: Daily new STEEM in context

One of the challenging things about tracking Steem's inflation curve is that the daily rate of STEEM production can change, based upon the price of STEEM.

Why is this? Because the inflation rate is based on the virtual supply, and the virtual supply depends on the ratio between the price of STEEM vs. the blockchain's internal price of SBDs ($1). This can be understood as follows:

1. [collateralized STEEM] = [SBD supply] / [median price of STEEM]
2. [virtual supply] = [STEEM supply] + [collateralized STEEM]
3. [Daily STEEM production] = [virtual supply] * [inflation rate]

So, if the median price for STEEM is $1, then [collateralized STEEM] is exactly equal to the [SBD supply], but if the prices is $0.50, then [collateralized STEEM] is twice as big as [SBD supply]. If the price of STEEM is $2, then the [collateralized STEEM] is only half of the [SBD supply].

Importantly, this implies that the daily STEEM production has two boundaries.

For the upper boundary, if the SBD market cap is more than 10% of the value of all STEEM in existence, then "haircut pricing" goes into effect. For the lower boundary, if the SBD market cap is 0% of the value of all STEEM in existence, then the [virtual supply] is the same as the [STEEM supply].

Until now, I've been tracking inflation based exclusively on the blockchain's current median price of STEEM, but the visuals were ignoring the full range of possible values.

For the next quarter's report, I added an upper and lower boundary to one of the slides. Here's what it looks like now.

With these updates, we can now see that the current range for new STEEM per day would be 80K if there were no SBDs or 89K at/above the haircut threshold. Current production is 88K STEEM per day. Similarly, we can see that 2037 values would be anticipated between 19K and 21K, with a current projection of 21K. And so on...

We can draw similar observations for the virtual supply size, noting that the expected values in 2055 would be anywhere from 876 million to 973 million, with a current projection of 963 million.

So, now we have some context for understanding the current projection.

Of course, this still doesn't account for burned tokens or for rule/parameter changes by witnesses, so it must be remembered that the values are still just estimates, but I think it is useful to see how the current projection compares against these theoretical upper and lower boundaries. This visualization will be included in my future quarterly inflation posts.

---

Thank you for your time and attention.

As a general rule, I up-vote comments that demonstrate "proof of reading".

---

Steve Palmer is an IT professional with three decades of professional experience in data communications and information systems. He holds a bachelor's degree in mathematics, a master's degree in computer science, and a master's degree in information systems and technology management. He has been awarded 3 US patents.

---

^{Pixabay license, source}

Reminder

Visit the /promoted page and #burnsteem25 to support the inflation-fighters who are helping to enable decentralized regulation of Steem token supply growth.