Currently steem isn't really used much for trading - I'm not really clear who is buying all the steem that content creators and others are selling on the exchanges. In any case, I'm not sure what use Steem would be perceived to have in that situation except as a stepping stone to buy SMTs - which might then be inflationary themselves. If SMTs are their own token with their own supply - essentially disconnected from Steem's value - then the inflation problem would just get passed on to each of the SMTs and it wouldn't actually go away. If the price of Steem goes up as a result, that's fine - but why would you be holding Steem if you wouldn't be able to use it to upvote posts?
I can see the benefit of stopping inflation for rewards altogether, in that it stops the value of the token constantly dropping automatically - but there would need to be a pretty ingenious replacement put in as a way of providing rewards that equals proof of brain at the very least. Personally, I still think that taking serious steps to stop bid bots is the best first step here.
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You would hold steem because every new coin/smt that is created would have to first buy SP in order to create it. Steem would be the base coin with which every other coin is traded/exchanged. Communities and Apps would also need to purchase SP for the Resource Credits needed to run their app/community. The bigger their community gets the more RCs/SP they will need to get.
The reason an investor would buy steem is because he could gain exposure to every single app built on steem instead of just buying one specific app's coin. Plus he would get SP interest as well for holding.
So, you have people/businesses buying SP for their apps and communities and you have people buying steem to gain exposure to every app built on steem as well as collect some interest along the way. I think we would see a radical shift in the price trajectory of steem if we made this change.
If I buy Steem to hold SP to then access SMTs that themselves may have an inflationary function - how does that protect Steem? Either the inflation of the SMT also effects Steem or if it doesn't then I am only temporarily holding Steem before exchanging it for SMTs (as Steem Engine works currently). Surely I can't buy Steem, use it to access/hold an SMT and then expect to somehow walk away with the Steem I had originally at a similar value, regardless of what happens to the price/inflation of the SMTs I hold... Or are we talking about apples and oranges somehow?
I haven't looked at the cost of creating accounts in RCs recently, but I think that the amount needed currently to grow a community rapidly is pretty high. I think it is going to be more practical for each user to buy their Steem to access RCs than it is for a community to centrally somehow access a large amount to pay for new users (in most cases anyway).
We are talking about two different things. I am talking about demand from communities/apps. You are talking about a specific user.
Every community/app that needs a token will have to go through steem to create it, and then also own RCs in order for it to function. Both creating demand pressure for steem.
It will be interesting to see exactly how much demand/buy pressure an individual mildly popular community (with an SMT) actually creates for steem. Of that I am not exactly sure. It will likely depend on how exactly the creation mechanism of the SMT will be tied to steem, as well as if future inflation of that currency is also tied to steem somehow.
I was talking about both the user and also communities in different parts of what I said, but I wasn't thinking about SMTs themselves requiring any more RCs than usual Steem usage would require anyway. I haven't seen anything on that yet from the developers.
I'm not really clear on how the idea of dropping the inflation process for Steem itself would really help Steem due to the constraints that are likely to exist in the relationship of Steem to SMTs - but obviously we don't really know how it's going to work out so we probably need to wait for SMTs to launch before reconsidering the whole concept!
Correct. Though one could assume that a lower inflation rate would mean it would require less demand to move prices up... all things being equal anyways. Which would mean that SP purchased/tied up for SMTs/Communities/Apps could be more impactful.