@dyamanaka Thanks for thinking through the details David, option 2/ledger seems to work. I also wonder if there could be other ways, but that seems good enough to me. I think users could be protected from holding to much mSC by the conversion app prompting them to cover large holdings back to SC.
[edit: this post moved from Is the Safecoin Economy Deflationary and would it be better with Inflation built in?]