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RE: Improving the Economics of Steem: A Community Proposal

in #steem5 years ago

The fundamental issue is that on Steem, a very significant portion of the reward pool is allocated by bid bots.

According to Steemdb, just yesterday, the top 5 bid bots alone allocated an astounding 27% of the reward pool. I don't have the latest numbers but in mid-2018, the last time I investigated this "organic curation" accounted for less than 25% of the reward pool.

Moving to a convergent linear rewards curve. While this may show a marginal gain in visibility of profitable behaviour, it also comes at the cost of further disincentivizing the already squeezed minnow voters. Discussing with active curators and content creators, we found that the vast majority of actual, engaged contributors to Steem as a social network have low stakeholding. On the flip side, this will minimize sybil attacks, but given the insane inequality on Steem, sybil attacks are a negligible concern at best. I'll withhold final judgment till I see the exact numbers and some simulations, but for now, I'm neutral about this. It's worth the trial and error.

Increasing the percentage of rewards that are distributed to curators. Whilst this may encourage the minority of organic curators to curate more, it comes at a steep cost as disincentivizing content creators. Without content, there will be no curation. I was a proponent of going back to 50:50 in 2016, but discussing the matter with the most engaged content creators on Steem over the years, I have realised this would be divisive and unpopular move.

It'll only be a marginal deterrent to self-voting abuse. To a self-voter, they get a 100% split every time, matters not what the split is. Sure, for further voting, they'll now share more with curators who vote after the self-vote, but they don't really care - they have already cashed in the initial 100%, anything after that is a bonus. We have evidence for the type of personalities that engage in self-voting, they are often ruthless and selfish. I'm sure they would be slightly more inclined to vote elsewhere; but it seems to me their primary goal of rampant self-voting will remain largely unaffected.

Similarly, bid bots will see marginal losses at best. Whatever they lose in bid surplus, they'll make up a significant portion (though not all) of it in greater curation rewards. The end result would be a slight decrease in net income, but nowhere near enough to put them out of business.

Finally, the whales who are delegating to bid bots will continue to do so. Given the above, whales will see a slight decrease in ROI. I've done the maths on this in mid-2018, to make curation even in the same ballpark as lucrative as delegating to bid bots, you need to offer a ~85% curation rewards split, which would of course kill the content creation community overnight.

Considering all benefits and drawbacks, this one's difficult. I'd be open to experimenting with a relatively conservative change in split and see what the results show.

Create a separate "downvote pool." I'm all for enabling downvoting, but I remain unconvinced that a downvote pool is a sustainable solution. Users are more free to downvote, sure, but the abuser is also free to revenge downvote by the same amount. Most people don't want to get caught up in a perpetual downvote game with whales. All that said, I agree that it is a net benefit, and I would support this change pending a better solution.

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You should make this into a post instead of linking it. Ive been rambling about this for months now and it mostly got passed over due to sheer volume of opinions.

I know you used to be a whale and you powered down, but there are still folks here that value your opinion.
And then theres always a one time bot investment.

the top 5 bid bots alone allocated an astounding 27% of the reward pool.

Oh and .... Im pretty sure you cant account for vote selling services due to it being hard pulling data from the chain for them... or that number could be much higher for non organic voting. :)