Hey @smooth, thanks for your thoughts and leadership on this. I am fairly confident that we can make it through this with the right support from the community/monetary and fiscal policy from the witnesses.
Would you mind sharing your thoughts on witnesses increasing their discounts to an even higher amount? I know on the one side it will encourage more SBD->STEEM conversation, and reduce the amount of rewards for active posts; on the other hand though, too much conversion (if users sell the STEEM instead of powering up) will put more downward pressure on the price. Where do you think the right balance is with the current conditions?
A larger discount increases the incentive to convert. There is no clear answer on the "right" rate of conversions, nor particularly the right discount (though I do believe that under "normal" conditions a discount of 0% is incorrect, and having not maintained any discount originally is part of what led to the current situation). We have been running roughly 5% per week conversions, which I think (purely opinion) is about right, though possibly on the high side. We will need to monitor the situation as conditions change and perhaps make adjustments.