The premise that whales would behave better because they have 'more to lose' was and is entirely false.
Would behave within the limits of what the system allows.
Rational people act according to what they have to lose or gain. The more they have to lose according to their pyramid of values, the more cautious they will be.
The trick is to identify the proper balance between incentives and the risk of abuse.
My premise is that, under superlinear reward, if the top of the pyramid sends too much of the reward back to themselves, this should decrease the demand for Steem, making the price to go down, decreasing the wealth of Steemians, making the system self-regulating.
I don't see it in n^2 (nor in any curve really, without other changes). I'm open to other alternatives.
I'm also very much open to other alternatives.
Yes and it was well-demonstrated during the n^2 era that this often involves/involved self-enriching behavior. Having more to lose was actually synonomous with having more to gain by behaving selfishly, so there is an unfortunate symmetry which doesn't really help anything.
This ignores tragedy of the commons dynamics. Perhaps it might be true of stake became so concentrated that the top of the pyramid consists of stakeholders with enormous stakes (say 90%). With top stakeholders having 1-3% each this is not demonstrated at all. It is a hard case to make to someone with 1% that how they vote with their 1% has a huge difference to the overall price of STEEM and very clear that how they vote has a huge difference to their own personal wealth.
I do not think we want a system with top stakeholders having 90%. We need a better solution (or alternately conclude that proof-of-brain has no solution and rationally pivot accordingly).
Self-enriching can only occur if the demand for Steem goes up which is what is at stake here, the primary goal.
How I understand it, I came to the conclusion the current system should be modified for reasons I've stated.
I don't know what is the best solution and I respect and understand the changes can only come from consensus.
I'm grateful to be able to voice my opinion and have this discussion.
No that is not true. Most of the time when considering a specific action, the demand and price of Steem doesn't change, or change due to a variety of market factors which aren't connected to any individual stakeholder's action. If I vote myself a $400 reward, there is no mechanism by which that will reduce my personal Steem holdings by $400 or more. I just get about $400 richer. Maybe my actions reduce the value of my Steem holdings by a dollar or two, maybe not even that.
The self-enrichment is quite obvious.
Even if everybody does this 100% of the time (which isn't the case), it is far from clear that it would destroy the value of Steem. The value of Steem doesn't derive solely and directly from rewards being allocated in a particular way, or at all. The value of Steem comes from many different factors.
The model of destroying the value of one's investment as an incentive to behave in a particualr way is profoundly broken at multiple levels.
In case it isn't clear, I'm not advocating for everyone to take the most short-sighted and selfish possible action (though many will often do so anyway). I'm examining the logic supporting the model and finding it lacking.
If the order book doesn't change then, no matter how many more Steem someone receive, if there's no one to buy them, then in btc/fiat/etc, you haven't enriched oneself. That's my point or at least a gross simplification.
When everyone votes themselves exclusively, then votes become akin to interest on SP. As more investors join, we'll get ever closer to such a situation.
As this situation progress, SP use would be reduced to witness voting exclusively.
I have no idea what you are talking about in terms of the order book. At any given time it isn't hard to sell $400 worth of crypto at close to the market price (almost any crypto). If I earn $400 worth of rewards that I can sell it is very unclear what mechanism exists which would cause my stake to devalue by $400, and there probably isn't one. If it is just general inflation, then it doesn't much matter whether whether I earn the $400 or someone else does, but my personal wealth would prefer that I do, obviously.
No. In addition add: bandwidth, store of value, plus STEEM and SBD (both interchangable with SP to some degree) can be used a means of exchange. As bandwidth, SP may be valuable for other applications such as SMTs, Steem Monsters, censorship resistant accountable social platform, etc. Speculation about future value of these or other applications may impute a significant current value.
If someone increased their Steem stake by 1% every day but the price of Steem goes down by 2% every day then this person didn't make any money in fiat/btc/eth term. Their wealth has decreased.
How much money someone makes is dependant on the demand.
The demand can't be taken for granted.
True. I agree.
And if they don't increase their wealth by 1% per day and the value of Steem decreases by 2% per day, then their wealth has decreased even more. Furthermore no stakeholders expect this to happen because anyone who did would have sold and would no longer be a stakeholder.
Again, there is no mechanism by which one individual stakeholder's personal reward stream translates directly into inverse price changes. This is literally impossible because there are more than 100 stakeholders who can each increase their stake by at least 1%. It wouldn't be possible for the value to decrease by more than 100 x 1%.
The price of Steem is going to do what it will do. The individual actions of any stakeholder have, at best, a tiny influence. Therefore people can self-enrich. Therefore, the system must be designed to be robust to individual stakeholder self-enrichment. It either is or isn't robust depending on how critical you believe the reward pool function to be. This applies approximately equally to n or n^2 or any other curve.
I agree with teamsteem. Why would people , stakeholders, want to shoot themselves in the foot?