You need to divide the 1% inflation between 70-90 BP's getting paid.
The inflation is the sum of all rewards, by definition. I refer to this as "rewards" in the formula. Since accounts are effectively cost-less, it the count is irrelevant as a single entity could have many.
I would say dpos inflation is more similar to PoW than you are describing
Its really, really, REALLY not.
In POW, consensus is NOT closed-body. Even if no tokens are exchanged in a POW chain, the ownership of consensus can change drastically.
One important phrase is "award those responsible for consensus with rewards that give more influence over consensus". This is really key to understanding the difference.
This makes EOS not really a closed system
EOS is not an isolated system. I suggest reading the updated section to understand the difference.
BP's can sell their tokens for whichever currency they use to pay their expenses
This is in the formula, as ep. It just delays the effect, as mentioned.
First, the idea, that the ability to have multiple accounts, therefore we treat all BP's as one account, is far fetched and ignores the reality of the situation, where tens of teams are working their butts off to provide the community with a working blockchain/tools and support. (including Greymass)
Second, you are missing the point of EOS. If it was a "store of value" type of digital currency blockchain like some of the PoW are, the risks of centralization would be more pronounced, since no one would need to buy the tokens generated by inflation. In a resource and utility sharing chain on the other hand developers and users need the inflated resources or else they can not use enough resources. This might drive the price up, but it also pressures BP to sell their pay, which is offsetting the effects of the pull of power towards BP's.
All in all, I can see this gaining an equilibrium, where market forces will work to keep the balance. Yes currently it should be moving towards BP's gaining more of a foothold, but only by less than 0.5% a year (considering their expenses). At the same time developers and users are learning to use EOS, which drives up their voting activity.
In 5 years I would like to see well funded BP's, with excellent teams promoting and running EOS and also having a small stake in it to "make them loyal to EOS and keep them from creating their own chain". So I see this 2-3% of the total supply as the golden handcuffs in other corporate environments. Yes it also has effects on consensus, but they are marginal. By that time I see 20-30% voting activity, so they would have a 10% effect on consensus.
This by itself is not a bad thing since BP's are also stakeholders and should have a say in deciding the future of the chain. Will they refrain from voting for themselves when they see that another team could do more good than them? Probably no! Will they vote for another 29 BP's doing harm to their investment when they see that voting for better ones would increase the value of their investment? Probably no!
So I see this all as a non-issue that does not need tweaking or offsetting, since there are already forces that are doing that: developers/users, expenses and common economic sense. This does not mean, that I do not want a development fund for EOS - it just means we should keep the talk about that separate and not try to fix something that does not need fixing.
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