Steem is a time-lock reward system, and you're suggesting the craziest thing ever, which is removing the time-lock.
I understand it. I am out right saying that this take on understanding it is both stupid and wrong, and ultimately detrimental to the functioning of the platform both as a social media mechanism and as a system for trade.
See, the problem is that real certificates of deposit have another end. If I, as a state entity or organization, offer a certificate of deposit, what I'm doing is giving you money in exchange for the use of your money for a period of time. And at the end of that period of time, I give you back the money that you gave me along with extra money. The reason that I do that is because that I believe that I take some of your money, aded it to my money, and spend that money in order to make more money by a significant margin, making it reasonable for me to return your money to you along with a user's fee for the pleasure of being able to make more money for myself.
That is not what Steem Power does. In fact, that's the furthest thing from what SP does.
If I choose to lock my SP up, all I get is the possibility of getting some more money in the future. Steemit and I have not decided and negotiated on what I think is a reasonable return on my investment. I do not have choices about who can put that investment with in order to get benefit out of it. There is no other way to make my vested value provide me recourse as a result of my investment. This is absolutely the opposite of a certificate of deposit.
A CD pays off once invested at a known rate. That's the point of the investment; it is a known return on a known value. This is why, for the most part, only state actors issue CDs, because only state actors can guarantee economic valuation. It's for that exact reason that when CDs can't be paid off, it's taken as a terrible signal that the issuing body is on its way out.
Now, compare this to SP. SP merely provides you the possibility of making an unknown gain in the future if and only if you can find a mechanism to engage with the Steem blockchain which keeps all of your SP active at any given point. This activity is impossible to do as a human being. A human being sleeps, a human being creates and consumes content, a human being only has so much attention that they can apply to discovering content to engage with the curation mechanisms, and all of those things are absolutely required in order to get value out of your SP investment. There is no guaranteed outcome for your investment, there is no guaranteed rate for your investment, there is no guaranteed anything for your investment.
And that's why people aren't investing. Because it would be stupid. Locking down your tradable token in an un-tradable architecture in order to be forced to use mechanized means to interact with the blockchain to get any kind of reasonable reward out in the first place, over an undefined amount of time… That's ludicrous.
CDs are understood to fund something on the backend. They are understood to pay out a consistent rate. They are mechanisms of investment which are intended to be more stable and more predictable than other forms of investment including stock trades, bonds, etc.
Locking it down SP does not of that. Zero. Zip. Zilch.
In addition, your parallel to CDs only makes sense in a world in which getting interest from a basic deposit in a checking or savings account doesn't exist. Again, we don't live in that world. We have absolute and irrevocable proof that people are willing to put their money into a bank account which has absolutely no minimum amount of time that funds can sit there before they're spent. This is in significant part responsible for the fact that there are orders of magnitudes more checking and savings accounts than CDs. Because that's what people want to do.
It's also what banks believe they will get a certain amount of profit out of and thus focus on.
And all of this – every single bit of it – is predicated on the idea that the issuing body, the bank, the state agency, the third-party, is taking those funds which are banked or invested and doing something with them which will return more value to everyone involved along the way.
SP is pointedly not doing that. Locking my STEEM up into SP does not actually provide a positive social or economic outcome to anybody. Not even Steemit.
From an underlying fiduciary point of view, this is the worst part. The activity has absolutely no advantage. It has no reason to exist. It gains no one, at any point, good. It provides for no goods, it provides for no improvement, and it hurts small investors the most.
It would be far better and more sensible to drop the idea of banking/CD/investment altogether when talking about SP and instead refer to it as it actually is.
It's a subscription.
By locking SP up, the Steem blockchain effectively demands a subscription cost, based on missed opportunity to spend that token for something someone actually wants, for the opportunity to engage with the "curation system" and maybe gain a little more value.
It's a subscription. It's a subscription to the reward pool access. And, by your own statements and others who are against reducing the lockup time, you acknowledge that the value that one can get out of subscription for a given period of time is well beneath the value that one could potentially have by not locking up the currency. As you say, "you are wanting the incentive to stake to go away or be greatly reduced, which is complete insanity…" If the idea of keeping your money in the bank for the interest you can accrue without being forced to is "insanity," it is insane to keep your money in that bank. If you must be forced to, you acknowledge that the possible valuation is extremely minimal compared to the investment.
I'm acknowledging that's true. I'm going further in saying that it's true in part because the lockup makes it so.
Okay, there's really only one other way to do it. Steem Power could be permanent via STEEM burning. So, the idea would be that you must turn your STEEM into Steem Power, and once done, its a permanent thing, so the only way to get the value out would be by selling the account itself. This is a way to not have to time-lock your STEEM in order to have voting power, but you'd have to more carefully decide just how much Steem Power you really want to have, since its irrevocable.
And what would be the immediate and complete affect of that policy change?
Much less investment. After all, you've already established that the amount of return for locking up your money for 13 weeks is so small that people would not willingly do so unless they were forced to. This is effectively just making the lockup permanent. Absolutely permanent. There is no way to get your money out once you put it into the system. Doing so only gives you the possibility of getting some portion of the reward pool allocated to you in the future assuming that you make maximum use of tools in order to keep as much of that invested SP in motion at all times.
Who would do that? Who would be that stupid? In a real economy with a real currency, that would be a hard sell. There are no real equivalents, not even capital investment because capital can be re-sold in order to extract value from it.
One of the immediate side effects would be that, because identity is tied intimately to your wallet identity, no sensible person would actually keep money in their personal wallet. It would all go into an external account which simply delegates SP back to the original owner and can be liquidated in short order. Effectively, you you would provide impetus for individuals to implement a meta-token represented by throwaway token accounts which can themselves be traded. I'm not saying that wouldn't be, at some level, better than what we have – but it would be utterly stupid.
All of this would be very different if SP vested in the system was useful for something to the system. It's not. It's just a gatekeeper. It defines RC, it defines voting power, it allows – but it doesn't do anything on the other end. It's a money sink.
People invest money with banks and businesses because they know that money is going to be used in order to make more money, some of which is going to be returned to them. Investing in SP does not get used to make more money. It only gatekeeps the possibility that the investor might be able to make more money in the future.
For a more sensible parallel, imagine that SP functioned more like a checking account. You can put in and pull out anytime you want to, but you only earn interest if you carry $500 (for example) as a balance from month to month. That incentivizes keeping more money in the account but doesn't lock the holder into keeping money in the account. The rewards are clear and obvious, and negotiated up front, the incentive is in the right place, and the stakes are clear.
Of course, that will never happen. (And all of the other arguments against requiring balances in bank accounts still hold and explain why a lot of the world's poorest remain un-banked. But that is a discussion for a different time.)
Ultimately, trying to equate SP with CDs is pretty wrongheaded.
I am not one that likes to be rude, but you wrote many words but those many words resulted in no value whatsoever. I'm sorry to be harsh, but that's the truth.
You simply have no idea what you are talking about. Again, I am sorry to put it so bluntly, but its all I can say.