I wonder, too, about taking the percentage entirely out of author rewards. I'd like to see at least some come out of the category "interest" since that category isn't encouraging interaction on Steem, which is what we want to encourage, right? Or do I misunderstand that category?
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Interest is the amount paid to encourage holding Steem in staked form. The biggest concern in lowering this amount would be that it decreases the advantage of holding Steem, which could result in lowering the price of Steem, which could result in inflation recipients receiving less value.
At the end of the day, it's hard to say for sure as there are many factors in play, but my gut feeling is that lowering the value of interest would result in a decrease in the price of Steem.
It doesn't have to be an all or nothing thing. Pull a little from every category and it has the least dramatic effect on anything.
This^^
The cost needs to be distributed among all categories, including witnesses. Everyone pays!!
I understand the purpose. I worry that decreasing author rewards is, long term, going to decrease engagement which will have a greater impact on the platform. Holders can still get income from curation, right? Or is it an either/or proposition, you either get curation rewards or interest? I just don't see, long term, how incentives for inactivity will drive actual platform value. I think I would support a compromise between taking from theleast active wedge and the largest wedge.
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If you hold powered up Steem, you always get the "interest" (see my other answer for more details about the actual mechanism). If you also vote, you will receive curation rewards.
But it's very important to understand that the only reason authors get rewards is because people place a value on Steem (i.e. the steem holders). If it becomes less attractive to hold Steem, authors get less rewards (all other things being equal). Vice versa, if it becomes more attractive to hold Steem, authors get more rewards.
You neglect that Steem only has value because the content generates it. It is content that has value, and provides that value to Steem. The content on all other social media platforms has immense value, and we'd see higher value for Steem were rent seekers not 'borrowing' it from creators without nominally imbursing them.
That's why our userbase is not growing now. Wanna make that problem worse? Decrease rewards for creating content. Retention is dismal because author rewards are being skimmed by curation. Curation is nothing more than rent seeking, and is the brakes on appreciation of Steem that keeps the token from creating capital gains.
Yes, of course steem is only valuable because people value steem. But I think the selling point of steem is primarily that you can reward your favorite authors and share in their success. That's what makes steem something that lots of people want to be a part of.
Yes, a relatively few people with large accounts are currently holding on to the majority of value, but that's not what mass adoption looks like. If we're looking forward, let's serve the vision that the blockchain promises.
I think compromise is acceptable on this. Some from authors rewards, some from holding rewards.
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Another question, when Steem is delegated, to whom goes the interest?
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The "interest" for powered up Steem goes to the holder of the steem (the person doing the delegating, not the person receiving the delegating). The actual mechanism isn't strictly interest, although it can be viewed as an "effective interest rate".
Here's what really happens: when you power up, your Steem is converted to Vests. There is a ratio of Steem/Vests and it is slowing increasing over time. So when you finally power down, the amount of Steem you get back is more than the amount you originally powered up. It's a bit different from interest, though, since the gain only takes place when you finally power down.
Wow. I'm sure most users don't know this.
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Follow up question: so if I want more sp, I should power down, which will result in more steem, and then I would power up and get more sp than I have now?
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No that is already accounted for. There is no need to power down and power back up (nor any benefit to doing so). What @blocktrades was saying is that you don't actually receive the extra STEEM until you power down, but it nevertheless accumulates in the value of your VESTS/SP. When you do eventually power down you will get the full amount, including any effect from "compound interest".
Thanks for the clarification!
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