It would make people hold on to their SBD so they can earn that sweet interest, rather than just dumping it all.
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It would make people hold on to their SBD so they can earn that sweet interest, rather than just dumping it all.
In a more traditional sense. If a company has say $80, and they have 4 shares each share is worth $20 book. If that same company splits the shares (into 8 total) the company is still worth $80, but each share is worth $10 book. Issuing interest for holding cryptocurrency is basically the same principle. Any short term market value gains, which does happen, are all psychological with cryptos. with traditional companies you can look at the companies financials and make estimates about a future return-but I don't see that you can do this with cryptos.
If, however, we suppose that the interest payments are to be paid from existing crypto held in the steemit "treasury" that would otherwise be off the market, it is essentially the same principle of printing off new shares. And supposing there was a "treasury", it would be better if the company was selling off SBD at higher prices to acquire other investments (USD, gold, silver, land) and develop a tangible book value than selling off low or heck even giving it away with interest. Even though selling new shares when high is a better idea than giving them out, the market tend to be mixed about what would otherwise be form 424(b)(4). Sometimes selling new shares gives a dying company life saving new capital and a second chance, sometimes they allow institutions to cover shorts and naked shorts and seems to create the appearance of an upper cap on a security and downward pressure on a security. But many have said they want SBD to be mapped to the dollar, and there was no previous means of doing so.