Instead of calling it a tax, which is not a very marketing friendly term, we can call them speculator fees (or whatever we come up with). Essentially the goal of the fee is to allow short term speculators to power up Hive yet take advantage of market volatility without causing a security risk to the blockchain. The market is mostly made up of short term speculators and very few long term hodlers like Warren Buffet, for example.
In order to have instant power downs + decentralized governance, you need a fee to exit. That is pretty much it. If there is no penalty for getting out early, exchange attacks would be very easy.
So the exit fee is first and foremost a security measure that enables the ability to power down instantly. Now the next question is, what to do with that exit fee? We could burn it, but I think the better idea is to give it back to those that stayed powered up, to reward the ones most loyal to the network.
You give short term speculators a way into the Hive ecosystem where, who knows, what happens when you get whales with big egos splashing around Hive upvotes? It could be an entertaining event. And when the short term speculators have had their fun and move on, the long term investors are rewarded.
There is a lot of energy in short term speculation. It's exciting, it creates immediate network effects, and overall it not a crowd you want to discourage, especially when the underlining technology relies on the token having economic value.
You can run, but you can't hide from DEFI, and we had better make sure we are not lazy when it comes to game theorizing the best approach to benefiting as much as possible from what good tokenomics can bring.
5% Speculator Fee
The 5% fee on power up, where let's say half went immediately to those who are already powered up, is something that would add even more APY. The goal is to try and make as high a APY as possible to lure in investors. If you see, you can get a high APY and think, we'll I was going to hold this Hive for a little bit anyway. A 5% entry fee isn't much if the APY is, let's say 100%+ on top of being able to upvote your favorite authors.
But I did see a lot of pushback on the entry fee, so I'm happy to exclude it for the first iteration of this. However, once people see how much the ROI raises when they power up with the exit fee, I think we'll see more support for various other fees that go back to the long term community.
10% Fee For Liquid Rewards (Not HP rewards)
The fee on rewards seems to be split, giving a exit fee to those that choose to get liquid rewards as appose to HP rewards. This obviously will give much better rewards over time to the authors that at least keep some HP powered up at the expense of those dragging the price down the most.
Why should someone who powers down all their rewards instantly be rewarded exactly the same as someone who powers up all their rewards? What sense does that make? Shouldn't we give the user a better reason to hit 100% HP rewards? These are the questions I ask myself and fellow authors who consistently power up. There is nothing wrong with taking your rewards instantly; I just think you should get slightly less vs. those that choose to stay powered up.
Overall I am happy with all of the feedback. Posting ideas to you all ensure it gets poked and prodded for any holes or leaks. Overall I see a very positive reception for allowing Hivers a instant way to power down. The only way to do this would be to have a exit fee, and having the fee go back to Hive hodlers was also very well received. So it feels that if this were to get past, the first measure would be instant PD + exit fee with the possibility of a liquid reward fee as well. I'm happy just to go straight instant PD + exit fee if there isn't support for the rest.
Proceeds of this post go to @pettycash - a grass roots marketing effort by Hivers.