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RE: [Proposal] Crowdsourcing, Crowdfunding, Guerilla Marketing, and a Steem Endowment
Reducing the negative impact of inflation on token prices
In the past, there have been several initiatives aimed at reducing inflation by burning tokens
This is a philosophical point, but I wonder how much evidence there is that inflation hurts token prices or that burning helps. I presume that idea is that increasing scarcity increases value, but isn't there another plausible story where burning a token signals that it has zero value to the person burning it? In non-crypto currencies most people have no idea what the total circulating supply is, my understanding is that that's a complex question even for economists. Is there good reason to believe it has a greater impact in the crypto space?
Well, I would think that the rate of inflation must be one factor among many. For example, if the token supply were doubling every minute, it would almost certainly become worthless very quickly.
But your point is well taken. All other things being equal, scarcity matters, but in the Steem ecosystem there may be other factors that reduce or eliminate any benefit that could be derived from burning tokens. Case in point, it seems to me that the @burnpost experiment never seemed to have much of an effect on token prices.