What will happen if the inflation in steem will go up to 25%?
Steem inflation is defined as the amount of new Steem tokens that are printed or minted each day, i.e. the amount by which the Steem money supply expands.
The path of Steem inflation, as for most cryptocurrencies, is fixed in advance. The current rate is 8.5% and it will decrease over time, eventually reaching 1% in around 15 years. The timing of changes in inflation is linked to the block number and since there is a block every 3 seconds, the changes can be predicted in time.
The path of Steem inflation is unlikely to be changed. However for the sake of this question let us assume that there is a hard fork which changes the Steem inflation by 3x, up to to 25%.
Steem inflation is distributed in three ways: in rewards, to pay witnesses, and in Steem Power interest. Let's assume all three of these are increased equally.
The most noticeable impact would be an immediate tripling of the rewards available to be paid out of the reward pool. Broadly, all payouts would triple.
There would be an immediate increase in activity, with current users posting more to gain the higher rewards. Over time this would also attract more users to the blockchain. In my view, after a month or so, rewards per user would move back down towards current levels, but with a larger number of users supported.
The other likely impact is a reduction in the Steem token price. Increasing the coin supply should reduce its value (consider simple supply and demand). There would also, most likely, be a drop in confidence in Steem due to such an unexpected change. An increase in selling on the exchanges would follow and a fairly substantial drop in the Steem price would be the expected result.
If the Steem Price fell far enough then the SBD haircut would also be triggered. At a certain point, calculated from the overall capitalisation of SBD to Steem, the SBD peg is no longer guaranteed to hold. There would probably also be a fall in the SBD price.
Thus overall content creators would benefit, for at least a short period, but anyone holding any significant amount of Steem Power (even 1000SP) would most likely lose out through the fall in the Steem price.
For the other uses of inflation, assuming witness rewards are also increased proportionally, then witnesses would do well. However unless you are one of the top 20 witnesses this will not affect you. Steem Power interest rises would also only be noticed by the very largest users.
Overall, in my view, the impacts are unlikely to be beneficial to most users.