I think this is a good idea overall.
I would like to see the reduction in reward rate for both witnesses and content to be phased in over time so that there is less of an abrupt (and IMO necessarily so) slashing of rewards. The main value add here is dropping the hyperinflationary model and extremely long lock time that has been unpopular with many investors (and, importantly, not just short term speculators, but also those who may want to invest longer term but without a horrendously-long exit time if and when they do choose to exit). Under the current structure, rewards are gradually being reduced as a consequence of inflation, and I don't see a need to replace that process with an abrupt cut.
The current instantaneous inflation rate for rewards is approximately 16.5%, of which 2/3 or about 11% to the reward fund and 1/3 or about 5.5% for witnesses. This proposal calls for 8% (85% of 9.5%). Both content and witness reward would have a large instantaneous cut. In the case of content rewards, from the current 11% to 7% and for witness rewards from the current 5.5% to 0.95%. This is obviously a massive 80% reduction in witness rewards and will decimate funding for work being done by witnesses and funded by witnesses supporting other projects.
My proposal would be for content rewards to fall by 2/3% per month and witness rewards to fall by 3/4% per month, both for (approximately) six months before reaching the above numbers. This allows for a more gradual and orderly adjustment to the eventual numbers (which are close to what was already going to happen, but somewhat accelerated).
It is also possible to consider a model where only new investments have the shorter lock time, but existing SP/VESTS still have to power down at the existing 2-year schedule (possibly to repower up under the new schedule). That has advantages and disadvantages; I have no strong opinion on it either way. I'm just putting it out there is case others want to comment on it.
I also think, that there should be two "lock periods", old one.. and new one. If suddenly everyone would have a possibility of selling 24-3=21 months earlier, then we can encounter even bigger dump.
In the other hand... with two "lock periods" system will become even more complicated for new investors... and... there will be no reason to no power down all funds, even to just power up one more time, but for shorter period.
So... maybe "2 years period" should be still there.. but there should be higher return from longer lock?
Agree with this. A concern with two "tiers" for SP is that current 2 year locks have entered the arrangement with the understanding that their interest rate is crazy high. To change the game is a pretty tough pill to swallow (and will be greatly affected by market conditions, for good or ill).
As for the shorter time period, there will naturally be a dump. You can count on it. But that's what markets do, and this overall plan would free up the market more, distributing Steem to more hands and, IMO, adding greater long-term stability.
I'm unsure about the gradual part. Other than the large impact on witness projects, I mostly feel that "ripping the band-aid off" might be the best approach.
For the existing SP holders, one possibility would be to support two different power up periods permanently. There could be more incentives for 2 year holding, like a higher interest rate and possibly increased voting weight/curation rewards. You could also offer a one time window to convert from long to short.
I think it is harmful on the blogging side too. While the cut isn't quite as severe, it is still almost 40%. That is enough to accelerate the pace at which people see the site as not worth the effort and quit. A more gradual transition (on both) makes a lot more sense to me.
Again the main thing from my perspective that is clearly positive and almost without any disadvantages is replacing the hyperinflationary model, and I rather see that done as a clean change that does one thing that everyone can get behind rather than introduce large immediate reward cuts that could be good, could be bad, but are less obviously an overall improvement.
I do think the witness projects (and witnesses who are personally involved full time and relying on witness pay) are a big deal. This platform needs continued supporting services (such as anti-abuse work), investment, and development. Cutting that off abruptly without a transition period to develop new models and funding sources will certainly hurt on the platform side, but it is only speculation whether a more immediate cut in rewards would actually help on the investor side. As an investor, I've been skeptical that the rewards (all of them, but especially the high blogging rewards) are bringing the value to the platform that the are supposed to, but I'd also be concerned about disruption of platform investment and potential loss of users really hurting the platform longer term.
If it would flush out all the shitty writers, I'm all for it!
In fact, take away all rewards for writers so we are left with those who do it for survival, out of a sheer desire. Then resume payment after those have been established. Create a real culture.
Why do you feel Steemit should be an unpaid writer's hub? There are plenty of places already for that. The major selling feature of Steem/Steemit is getting paid to use a social network.
Thriving social networks include all calibers of content producers and consumers but the vast, vast majority of user generated content is shit. We just need better tools sift through the shit and personalize it to our tastes so we can wallow in our own shit.
Check out Tumblr, that's where we are most likely headed on the content quality front but it's not a bad thing. More and more crappy content will be the price of success.
oh i like it! very much. Allow to powerUp for 6 month or for 2 years. With 2 times the benefit for the 2 years.
Yeah, something like that :)
Yes this allows the reduction of risk Dan pointed out would discount the price and others to still invest long term.
I very much like this idea
Choice and having options is always wonderful. I would say 3 months or 2 years. 6 months starts getting into long-term territory (ask all my previous relationships)
Likely the drop will not be so big, if we keep the bottom of 1 STEEM per block. Need more details though.
//Edit: format correction.
I agree that changing over time might make sense and abrupt changes might have to be avoided.
Smooth, i think the most important aspect is to think about what is the best distribution of this table:
Do you think the above is a good distribution? It looks kind of good to me. But i think the most important thing is to figure out how this table should look like. Then we can think about transition. The main thing is to keep the main thing the main thing.
Yes I think overall it is likely quite good. Adjustments may be necessary in the future though. So we will see.
Thinking about custom allocation - then everyone could be happy possibly and more people could be willing to participate https://steemit.com/steem/@jimmco/proposed-changes-and-custom-allocation, WTYT?
With the reduced inflation the price will rise so witness rewards won't be that low compared to now.
If witnesses needs funding they should just make an intro post of their project or why they need funding like everyone else, they will definetely receive some $ since they are popular in the community
I'm going to call bullshit on that. No one can predict the price and if you claim you can you are undermining your credibility. Cryptos are volatile and go through long cold winters. While today the market seems happy with this announcement, in a week or a month or six months it will be old news and the price will be based on what is going on then, which we don't know now. I'm not enthusiastic about a plan that relies on "Because we do ______, the price will go up and then the problems will be solved". I've been around a bit too much to fall for that.
Yeah, we see 50% moves on a shoddily researched op ed.
I would expect Steem to rise from this too. But, IMO, witnesses need to be take care of reasonably. The voting mechanism with the 3 month rolloff helps promote those who are doing the most for the overall project too. It's a new concept to me, but so far I've been impressed.
Supply isn't the only factor determining price, or even inflation.
This will create an environement where users are not equally treated in the system, bad precedent imo.
It will also mean that current users can't take advantage of the new feature ( reduced lock time period)
Also I am not sure why you would want to still lock people for so long, what would be the point of that? A reduced inflation means that we no longer need to prevent people from selling their share because there will be many willing to buy on the other side.
I didn't say I wanted to do this. It has advantages and disadvantages.