Reducing the SP holding period to three months creates an even more dangerous power down effect across the board. The SP creation rate was the problem, not the holding period. By reducing the holding period you're giving more reason for SP holders to power down and then dump liquid STEEM at a quick price. There's little reason not to dump free rewards for a quick profit.
Trying to convince outside investors that SP is a good hold, is hard to do. It's not liquid and can't be converted instantly. We need some incentive that has share holders holding liquid STEEM or SBD or both. I suggested that we introduce a fee on created rewards which are diverted to a surplus fund and then paid back to share holders annually as form of dividend. The argument there is that SP already gives back to investors, however no investor wants their investment tied up for 3 months.
Another suggestion for increasing investor interest is to create a revenue stream. By creating a revenue stream, liquidity grows and so does the value of STEEM. To do this we have to implement new markets that use both SBD and STEEM. People have suggested that we introduce advertisements, which would work, but have a real effect against what we do and what we don't want to see on our feeds (I suggest solving that by creating a tab for it, such as the promoted tab). We need real world markets, such as the exchange of goods & services, right here on the platform. If you could easily buy/sell goods or services for STEEM/SBD, then you create more reason to buy STEEM/SBD. I know there are already applications that have been developed for this but there should be a place for it right here on Steemit, just as Instagram has tried to do with their recent updates.
So, if we can create incentive for investors to hold STEEM, other than to just power up, we create more liquidity in the long term. Less share holders will sell their STEEM and instead hold it on the platform. I know, I know, that's what SP is for, but as I said no investor wants their investment tied up for a period of time.
I'm glad we're addressing these issues in a timely manner, and when it comes to the reallocation of funds, I'm all for it.
(I'm no economic student, this is merely what I believe)
People have been holding bitcoin for years with zero incentives to do so. The only incentive is the prospect of a higher bitcoin price in the future. Steem by reducing the inflation rate also create this prospect.
The idea that you have to lock people to have them commit long term is wrong.
That's my point. SP locks people in. There should be an incentive for them to keep liquid assets on the platform. A dividends for liquid asset holders creates that incentive.
My point is that reducing steem inflation from 100%-150%( today) to less than 10% is a big incentive to hold liquid steem.
The purpose of the holding period was to prevent people from dumping the hyperinflated steem. If you reduce drastically the inflation of steem you remove the purpose of the holding period, and so the holding period could be 48h it wouldn't be problematic.