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RE: Thinking out loud: When should the witnesses start paying interest on SBDs in savings?
Very interesting topic. I've been thinking about this myself, as I'm interested in anything that can reduce spam and bot exposure.
I tried to simulate a situation where witnesses started paying interest on SBD right now, during a bull market. What could potentially happen?
- SBD has a high price, despite the fact that this token currently has arguably no real use other than selling it. Suddenly, SBD becomes more attractive because you can earn interest on it without doing anything. It is obvious that some large holders in the first stage will be interested in converting STEEM or SP to SBD. This will lead to a jump in the price of SBD, while the price of STEEM may not decrease, as the conversion will go directly from STEEM to SBD.
- As the price of SBD increases, many will then consider it too expensive to buy. In addition, bot users are rewarded daily for their posts in SBD. Thus, I believe that for the most part the picture with spam and bot users will not change.
- To compete with bots, witnesses will have to pay high interest rates, more than 15 or 20%. In the long run, this will lead to a glut of SBD in the market and a drop in its price.
This is just an attempt to simulate the situation. Of course, witnesses will not try to compete with bots, because they do not need it. If they start paying interest on SBD, it will be for other reasons.
Good point. I already mentioned the uncertainty about the price of SBDs, but I should have mentioned the selling pressure on STEEM, too. I just added that to the main post.
I also suspect that in the long run, this would drive the price of SBD back towards the peg, but I think it all depends on whether investors and authors sell or save the SBD that they receive in interest payouts and author rewards.