I only now stumbled upon this post @therealwolf, and decided to give a reply.

SMTs could be a solution, but not if STEEM remains being minted via Proof of Brain. The problem is clear from the behavior we see with SCOT projects. Everyone ultimately keeps comparing their tribe tokens to STEEM and how they can leverage their tribe tokens to obtain more STEEM.

SMTs will only continue doing the same thing. These tokens will be designed for projects to obtain SP delegations or STEEM conversions as SCOT projects are doing now, and the holders of these SMTs will most likely be hoping to just convert them to STEEM eventually. A lot of these new tokens are focused on finding a way to get more STEEM.

Why is that a problem? The biggest problem on Steem is the fact that communities like Actifit are sharing a reward pool with a community like STEM. Its really not fair to either community for that to happen. And SMTs don't solve that problem if these SMT communities are really out to earn more STEEM rewards.

This is why STEEM needs to become neutral. It should cover witness incentives and continue to provide interest to those that remain powered up. In fact, we could drastically drop the inflation rate by removing author rewards, moving all curator rewards over to vesting interest and reducing witness rewards by a lot. Why reduce witness rewards? We need witness rewards to be enough to incentivize people to be witnesses, but if its too large they will gradually have enough SP to keep themselves in a top spot, which is bad.

If 99% of inflation went to powered up STEEM holders and 1% went to the witnesses, we could have a secure voting system for selecting witnesses, as well as big incentives to people to keep their STEEM powered up. If inflation is too small it would appeal to the Austrian economist, but it would not actually provide an incentive to remain powered up. 5% inflation might be ideal because this is the ROI traders hope to earn on trading, which might mean they will prefer to keep their STEEM locked up so that they can keep making near 5% plus whatever they can get from RC delegation.