Reducing supply by a factor of 10 is just a gimmick with no practical use. I’m mostly indifferent to it, as I see it simply a marketing ploy. My biggest concern in that regard would be the divisibility.
My biggest concern overall is that we are going to & have been subsidizing everything, creating insane levels of inflation.
3% inflation in a one time event, just for swapping NEM1 to NEM2. This is a high level of inflation even for major world economies over the course of a year. Yet we are going to do it in a single event, with low liquidity. (2% of max supply = about 3% inflation of circulating supply)
Combining this with subsidies for Foundation, Studios, Ventures, Supernodes, harvesting, paying for exchange listings, or whatever - it’s quite worrisome.
I would be very interested in knowing the projected inflation rate the Catapult committee has.
Also note, the inflation rate is not the percentage of a future maximum supply that is introduced to circulating supply, but is the % increase of the already circulating supply.
In 2019 the majority of cryptos that are showing gains against USD have relatively low inflation rates. And some with great growth actually have deflation - like BNB.
Projects with high inflation, Ripple, Stellar, NEM, and countless others have continued to show steady losses.
Price in and of itself is not the most critical factor. However, it is highly correlated to adoption and interest, especially since we use POS.
The whole point of POS, from an investor standpoint, is defeated when inflation rates exceed adoption & demand.
Price is a #1 factor for those looking to stake or mine any crypto.
Even if I really really really love NEM. It makes little sense to invest so much to host a node. Only people who will host are those who can stand to lose thousands of dollars just to show their support. (Or those who don’t understand the numbers)
Also, businesses building upon NEM have to play hot potato with their XEM - buying small amounts and using them as needed.
There is no incentive to hodl any significant amount to cover network fees, as inflation continues to drive price down, resulting in lost capital. And likewise, there’s no incentive for them to host nodes to benefit their own projects.
We won’t see long term price stability from hype. Hype causes pumps and dumps. We need real adoption and sound economics.
Anyone interested in deeper analysis of other projects, check out https://onchainfx.com/ and https://messari.io These tools are very helpful.
Unfortunately, since NEM has not been transparent and/or communicative enough with 3rd parties, the important information regarding inflation is not available for NEM.