Well said my friend. You're absolutely right. As arbitrage margins minimize, Honesty Bank's main source of income will cease to be profitable and we will enter a decline phase.

However, I think you're underestimating the (1) length of time and (2) amount of wealth this arbitrage opportunity can sustain. SBD has a potentially infinite supply. When demand picks up on SBD, Hive account@steemit (or Hive account@ned / Hive account@dan founder team) has the authority the spurr the digital printing presses to match supply with demand. The unprofitable venture on their behalf won't be pouring SBD into the markets, it will be taking them out when/if demand dies. Then again, it's the ultimate buy low / sell high opportunity.

This is how SBD can be sustained in the first place. Otherwise, SBD couldn't really peg. So if we're confident Steem will have long term success, we can be confident that SBD trading volume will increase & volatility will decrease.