increasing supply during reduced demand will further reduce price
And what did you get out of increasing supply?
You completely miss the point and assume you get nothing out of it.
AKA an investment that returns $0 in value.
Should we reduce inflation to zero on Hive?
Obviously not.
Think about why.
It's because the value of the inflation is higher than the dilution rate.
If we take away block rewards the value of Hive crashes to zero instantly.
If we take away the reward pool we lose our ability to decentralized efficiently.
Again, I'm floored that this is such a difficult concept to understand, seemingly across the board for the entire cryptosphere.
You specify nothing as the means or reason to gain from further pressuring price. What specific mechanism causes Hive to have a yield?
Hive isn't a bond and has no yield. Bonds have yields. When you buy a bond it has a face value that it's worth at maturity. The difference between the price you pay for the bond and what it's worth at maturity is the yield. That's why when the price of bonds goes down the yield of bonds goes up. Hive has no yield that goes up when price goes down, because you get the face value of the Hive when you buy it.
Marbles have no yield, but you can do something with marbles that creates a return on investment, like fling them at fleeing antelopes to gain meat, which you can trade for more marbles than you had to fling at antelopes to get the meat with. You can buy Splinterland cards with Hive and win games that payout more Hive than you had to pay for the cards. You can get a return on investment by using Hive, but Hive has no yield, because it's not a bond.
If the price of Hive is in a bear market, pumping out more Hive gains no one anything at all. It just makes the Hive that was already dropping in price worth even less because now there's even more of it people don't want enough to pay the old price for. If the price of bonds goes down the yield of bonds goes up, and if you pump out more bonds in a bear market the yield of those bonds will be increased because the price of the bonds will go down. That just means the bond issuer will be paid less for it's bonds when it sells them.
If you want to stabilize price in a bear market, then deflation could be one way to do it. If supply can be matched to demand, theoretically the price can be maintained by not offering any Hive for sale at lower prices. The only way to do that would be deflation during bear markets. If the price starts dropping, start pulling Hive off the market until the price offered for Hive goes back up to the desired price.
Just reducing inflation isn't enough. You'd have to be able to reduce the amount of Hive on the market, to suck it out of people's accounts in a reverse rewards pool, and ain't no one interested in that, for very good and real reasons. Or you could do what the UK just did.
The UK just bought a lot of it's bonds, deflating the bonds on the market and stabilizing the price, to prevent the price of their bonds from crashing to junk bond levels and increasing the yield of those bonds to the point that the market would buy them. They deflated their bonds, pulling them off the market by buying them.
Hive really has no mechanism to do that, since Hive isn't a bond. If you pump out a bunch of Hive you can't use it to buy the Hive on the market to stabilize the price of Hive.
Doing that doesn't make any sense for very real reasons. People have been doing these things for a long time, and they're done the way they are for those real reasons.