Let's Talk About Powering Down Or Cashing Out.

in LeoFinance3 years ago

cashingout.png


There have been a lot of discussions going on lately about the power down period and there's some really good ideas in this post by @theycallmedan. I personally don't like all of it though, and instead of making comments here and there with my input, I figured I could just make my own post.

Like pretty much always, I think people are going too deep into this whole thing. Taxes for various things, burning tokens or redirecting tokens to Hive Power holders and most of these ideas are coming from Defi, as Defi has made taxes standard so people are used to it. I get that, and I totally agree with the majority of the people on the fact that the power down period has to change.

The 13 week period has been a barrier for a lot of people for many years and Hive was supposed to be is a better, stronger and basically just a greater version of Steem. A much better one, but even though people have complained about the 13 week power down period since literally forever, we still haven't seen a change. We seem to be better off this time though, with theycallmedan talking about it, blocktrades making comments about it etc. Things seems to be picking up and who knows, we might see something new in that regard in the coming months..

That being said, while I understand the point of having taxes, I can't say that I like how basically everything sounds like the "rich will get richer" at the expense of others. Well, Dan formulated it different by saying this:

"Reward strong hands at the expense of weak hands."

What Dan suggests is this:

  • 5% powerup tax.
  • 10% instant unstake tax.
  • 10% tax on all rewards claimed (including tax rewards)

I honestly think it's insane to have taxes for power ups and claiming rewards, but I love the idea of instant power downs. I have read a lot of answers and the reasons behind power up taxes but I still don't like the idea at all.. It obviously depends on how things are implemented, but simply having to pay 5% taxes whenever you power up is not a change I would recommend or like to see.

So you only hit the ones that instantly power down all of their rewards without ever keeping any powered up, which are the people that should pay the most. - Dan.

I do understand that the tax on rewards is simply to benefit long term authors and stakers over short term authors and speculators like mentioned in Dan's post, but Hive is difficult for newcomers and I think that it something people seem to be ignoring or forgetting when they discuss things like this.

Some users are here for weeks or months before they earn anything at all, and I doubt they would be willing to pay 5% taxes just to power up their rewards. It doesn't really matter if they get it back by being a long term holder. I am sure most of these users will see it as 5% less rewards.

10% tax for claiming rewards is another thing I don't agree with at all, because I don't even think we should have to claim rewards. It should be done instantly and automatically. I have never heard anyone not claiming their rewards, and I don't think that I will ever hear it..

I might be wrong though, perhaps it's supposed to be something different than how I interpreted it, but if the 10% tax on rewards claimed is what I think it is, it's crazy. I mean, that would basically mean that a user has to:

  • Earn rewards by either making articles or comments.
  • Wait until the rewards pays out.
  • Pay 10% taxes to claim the rewards.
  • Pay 5% taxes to power up the rewards.

That would be a total of 15%. Assume that this user does this for a couple of weeks and suddenly wants out. That user has to pay another 10% tax to power down instantly.

Depending on where this user lives, they have to pay fees to convert this to the local currency as well, but before they can do that, they pay fees on exchanges to sell and convert the Hive into BTC. On top of that, they also pay taxes in their country.

I thought this whole thing was about financial freedom- moving from FIAT to crypto and to own your own content and whatever things people says. Is it freedom when we tax people 25% (maximum) and then push them towards more fees and taxes for cashing out..?

  • Nah, I don't like it and it would make it more difficult for people to actually change their lives to some extent with Hive if we pushed them towards fees and taxes.

I like the instant power down idea, and we should definitely have 10% taxes for doing that. I actually love that idea and I wish we would have it today, but I also think that we have to change the 13 week power down period to 4 weeks. This should have been changed years ago. Tribes and communities have set 4 weeks as a new standard and it doesn't make sense for Hive to be different. We should also want to move further away from our previous selves.

That being said, the only thing I think we truly need is:

  • 4 week regular power down periods.
  • Instant power downs with a 10% tax. (fee).

Anything more than that is likely to cause more headaches for people. We don't want Hive to be even more difficult and/or confusing for people. We want things to be as easy as possible. That's how we will attract new people in the long haul. Easy-to-use and easy-to-understand. That's vital.

I wouldn't mind having a 10% tax for people going with 50% author rewards paid out in liquid though, while keeping everything if they go 100% power up. That is likely to encourage more people to power up what they earn, which should be the top priority.

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Tax, wow, thats a harsh pill to swallow at first sight.

What type of ideas?
Are you against all of the taxes or something specific?

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4 weeks + tax ( and there are more taxes in the idea)

I don't think it would benefit hive. I have made a proposal with a combined power up. But I think nobody likes it.

I could write longer about it, but it would not end up in an efficient system imo.

Wallet recovery would be also pointless at this point. So why 4 weeks? There would be no security reason to do it.

Wallet recovery would be also pointless at this point. So why 4 weeks?

If we got something that still protect our accounts in some way, I'm definitely for a shorter power down period. Especially an instant power down for a 10% fee. I don't think it would work out well having more than that.

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let the system simple and make it more simple. Otherwise, I see no way for mass adoption.

Think about to explain someone how it all works. Hive will end up in a huge failure if we decide to make things too complex.

i don't even mind the 13 week with 10% for instant, but with an option to chose that my account does not use instant, or a new key for instant powerdown. i know that most chains have no protection from key theft but i don't use my keys every day on any other chain and i use them every day on hive.

That is true actually.. Continue with 13 weeks and just put in an instant power down option for a 10% fee. I think that could definitely benefit Hive.

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Fuck taxes and fees.

Yeah, I feel the same way more or less, but I think it would be a superb thing to have an instant power down option at least. And you should have to pay a fee for doing that.

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As if I would have anything to power down.
The current amount of my Hive power is around 138 Hive power. If I power down, then my Hive account will probably become unusable for regular, every day interactions.
But I get your point.
Although people are already powering down a lot.
An instant power down option probably would not help the Hive blockchain in long term. There should be encouragement for the opposite. So the users should be encouraged to power up.

A big dilemma. However, in the end, what speaks louder is always our own needs.

It sure is something that is worth to discuss. There's a bunch of different ideas to improve Hive in various ways and instant power downs, reducing the regular power down period and taxes in some form seems to be discussed all over the place.

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It would be a major turn off for me if Hive would implement all these taxes. Like you said, instant power downs with a fee (I'm not sure if 10% is enough ) is ok but anything more than that would be very bad for the ecosystem

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I feel the same way. I would like to see the regular power down period of 13 weeks be reduced to 4 weeks instead, if we still had a good way to protect our accounts. But more importantly, I definitely think we need instant power downs, and that should come with a fee. I think 10% is pretty much the best idea. 20% is too much and 5% would probably push a lot of people towards instant power downs.

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The “taxes” which probably isn’t the best name for them, go right back to you. The longer you stay powered up the more you get. If you plan on being around for awhile, this method would net you dramatically more hive, no matter your account size. If you plan to leave quickly, you would be the one getting hit by this idea. Its a transfer of wealth to those that are short term to those that are long term.

Maybe it could be called fee. For example if that will be burned it maybe good for hive !

I appreciate the answer and clarification but I don't think it's a wise move to reduce people's rewards short term. It's difficult for newcomers to earn as it is, and even though people would earn more over time, I still think people would feel like they earn less if they had to pay taxes or fees.

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Why on Earth should there be a tax on claiming rewards?

I have no idea.. That one was the weirdest to me.

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I have to agree with you. I don't mind the power down tax but the power-up and claim rewards doesn't exactly sit well with me. Well either way, we have to wait for things to play out first before seeing what will happen.

As for the last point, I think people would just purposely take 100% power up then take the 5% instant power down to get more rewards. But who knows.

Posted Using LeoFinance Beta

As for the last point, I think people would just purposely take 100% power up then take the 5% instant power down to get more rewards. But who knows.

That's a very good point. I didn't think about that at all..

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I feel like I have all the input I need now from both sides and now my vote has changed to....
Keep it the same and don't mess with it because it's working

  1. A 10% instant power down fee sounds good till you realize it opens up accounts for massive hacks where the funds could now be instantly drained from the account
  2. I don't believe anyone is going to sit there and say I think I'll power up my Hive now because I have to wait 4 weeks for power down over 13 weeks
  3. Too short of a power down and you risk exchanges stepping in and taking over. An aggressive take over like we saw with steemit.