Witness update

I will be upgrading my witness to the upcoming 0.16 fork assuming no technical problems are discovered before December 6.

I have reduced my witness SBD interest rate (APR) setting from 13 to 9%. I do not expect this to have an immediate effect on the median rate being paid on SBD (currently 10%) because many witnesses are still using 10% and some are above. However, I hope that other witnesses will join me in lowering the interest rate.

The white paper indicates that the interest "must be stopped" any time SBD trades consistently above $1, which SBD has done several times, and is currently. It also indicates that a higher interest should only be used as an incentive to support a weak SBD price in a low debt situation. We are currently in a high debt situation, with payouts being made in STEEM instead of SBD and the debt ratio only slightly more than one 50% STEEM price drop away from SBD dropping off the peg and taking a haircut.

While I believe the "must be stopped" language is a bit abrupt (gradual adjustments to assess the effect are probably better most of the time), it is clear that it is not useful to be paying high interest (if any at all) to encourage people to hold something that we have too much of. Instead, the SBD price peg is currently being supported at par by a feed discount which both increases demand for SBD and encourages conversions of SBD to Steem, reducing debt. Some witnesses have suggested reducing the discount to prevent SBD from strengthening too much, and while I agree this would be a good idea if we were not already (and probably inappropriately) paying high interest, I believe we should reduce or stop the interest first, and then assess the continued need (if any) for a feed discount. This is the process implied by the monetary policy rules given by the white paper and it is the process that I support.

The internal market maker bot has gotten a real workout the past few days with all the action on the STEEM market, and has performed well with no downtime. Instant exchanges continue to be available all the time up to 40 SBD (about 225 STEEM) with approximately 0.5% spread. As I've ramped up the available liquidity, I've noticed steadily increasing use from Steemit users (aside from bots) which is a good sign. People are finding the internal market much more useful now.

After the fork, despite the 80% reduction in witness pay, I plan to continue existing sponsorships of ecosystem projects (steemcleaners, busy, and the food/cooking contest, others on a case-by-case basis) on existing terms until at least the end of the year. These are already exceed the weekly witness power down, so I will continue to cover the difference with outside funds. I don't intend to change the witness power down during that period, so it will remain at the same (two year vesting) rate as before.

Rewards from this post (in whatever form received -- STEEM, SBD, and/or SP) will be converted to SBD and burned, as were previous witness post rewards.