Were you around when power down took 2 years? People invested in Steem then. We need investors who take a long view, not those who will drop in and then then clear off as soon as they feel they made enough profit. I think the period is reasonable.
You are viewing a single comment's thread from:
Yes I opened my account on July 10th 2016 so I have pretty much witnessed everything that has taken place here. In my view trying to appeal to more short term "investors" is not the way to go. There is nothing wrong with speculating but the main issue that we need to address is getting adoption of the steem blockchain. If we had 10 million users each needing about 30 steem for RC no one would be complaining about the lockup period. That is what we need to aim for.
As I mentioned in the post having a lockup period is not a problem for investors in the "real" world. You can make the case for a shorter period (like in the proposal) but saying that it's daunting for investors and is one of the causes for the stagnation of the price is a distraction from the fundamental problem that we need to address.
If someone can show actual data that proves the premise then we should go ahead with the change. Maybe it's not a big deal in the end but the case made for the proposal is weak.
If you work out the numbers on how much new coin needs to be absorbed each day just to offset inflation, you will easily see that we are at least one or two orders of of magnitude away from this (ignoring that net user growth is negative so in fact we are infinitely far away).
For the foreseeable future, we absolutely need investors putting in new funds if we want to avoid the obvious inflation-induced price declines, which can easily (and probably have) become a self-reinforcing death spiral. The economics of Steem just do not work without appealing to investors.
I don't think it helps us at this point to be picky about some investors not being the right ones because they are too short-term focused, even ignoring the obvious fact that this represents a huge portion of the cryptocurrency investor market. Nor do strained analogies with IPOs and hedge funds (who have lock ups for entirely different reasons we don't need to get into here, and I'm pretty sure you know what they are anyway) help us. Given overall weak investor interest in Steem, we need whatever help we can get. For that matter, even many existing Steem users and investors have expressed a view that they would be more likely to power up or invest with a shorter lock up. I've never once seen anyone state they would prefer to power up or invest with a longer lockup.
Reducing inflation more quickly is an alternative approach (i.e. reducing the dependency on outside investors and inflow of outside investment). That's probably a more productive path, and it too has its supporters, but one which is certain to be at least as controversial if not more so.
My main gripe is not with the proposal itself but with the premise behind it. It may be a valid avenue and we must explore it but we must keep the focus on the real reason for the decline in price. My opinion is very clear on the matter...we need organic demand and this has to come from the utillity of steem as a source of RC.
If we do not address this it doesn't matter if we reduce (or even remove) the powerdown period from the protocol. We will just be kicking the bucket a little further down the road.Unfortunately this is not something that can be achieved in a short timespan.
The organic demand is exactly what you say, a source of RC. The problem is that the numbers demonstrate clearly that for such demand to support the price in a viable way requires a scale of growth that is probably years away at best and may not happen at all. (Alternately, the price of RCs would have to rise enormously, which we could theoretically arrange by drastically/arbitrarily reducing the resource pool sizes, but this too would kill growth and is not a viable path.)
It is exactly (speculative) investors that fill need to fill this gap by betting on whether that demand will happen some time in the future. There is zero chance that there will be enough demand for RCs in the present directly to support the price, but at the same time if there isn't enough value in the platform to support continued development, support for the infrastructure, etc. then we will never get the chance to grow enough to where it potentially could. Again, it is only investors/speculators who can possibly fill that gap.
Even the original white paper was pretty clear on this. Most of the the demand for Steem in the short term has to come from speculators, not fundamentals. If we make the product unattractive to speculators (and indeed, the original design/white paper got this very, very wrong; it is probably not a coincidence that EOS launched with 2 day lock up and not anything like the 2 years or 13 weeks in Steem), then in the short term, speculators won't buy it, and if they don't (again, in the short term), no one will.
Similar comments can be made about inflation and investability, and likewise relationship to EOS and other newer projects (and older more successful projects) that are better accepted by the market, and so forth, but that's a bit off topic here.
I have to agree that the market dynamics are not in steems favor. In light of that I think that we should consider cutting the inflation rate in half (controversial as it may be). Over time that would have a greater impact on the price (programatic selling issues aside).
That is quite possible. On the matter of programmatic selling, I think I mentioned above but not sure: Programmatic selling is about 1/3 of inflation. Even if inflation were cut in half, it would still be larger than programmatic selling, so such a cut would be quite significant.