I tend to agree. Increasing curation rewards could make bots/selling votes more profitable, since AFAIK the curation rewards themselves are what make up most of the profits.
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I tend to agree. Increasing curation rewards could make bots/selling votes more profitable, since AFAIK the curation rewards themselves are what make up most of the profits.
There is no way it can make selling votes more profitable. The market price for selling votes is already close to the entire reward (because a buyer can self-vote and capture it all). The bid bots themselves are highly competitive with no real barrier to entry and margins are being driven down. This will likely continue. There are already some which are paying out from curation rewards in addition to cash bids.
The reason (some) bid bots keep the curation rewards is because both their voting and curation rewards are both generally terrible and the curation % ends up being low enough to serve as a (somewhat) sensible fee. With increased curation rewards this would no longer be the case, and the penalty from bad voting would be significantly increased (even more so from downvotes).
The business model of bid bots and other vote selling services would have to change dramatically. Extrapolating numbers from the status quo is going to very inaccurate.
I did say "could" because I agree that the business models would need to be changed, however I'm not certain those models would be worse in terms of profitability than what exists today.
It's a razor margin already, and for those who have to pay investors (delegators) I imagine it's even closer (or less) than break even vs those bots who are running on self-owned SP.
Can you expand on this? Are you considering "Bad Voting" itself to be when the post is downvoted on by others, offsetting the curation reward generated from the initial vote itself?
There's a floor on "bad voting" (in terms of returns) when you don't consider down voting in the equation. In the situation where a bot casts a $1 vote on a post with no votes and 25% curation, the curation reward is ~$0.25. That's the floor, unless someone down votes it.
If including downvotes under the proposed rules (new pool, reward, etc), then yes, I can see how that would impact bot profitability. However, that's not because of a 50/50 split, it's because of the new downvoting incentives - which make a hell of a lot more sense to me than changing the author/curation ratio.
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That is so FAR, FAR below the actual return encountered in that wild that isn't really worth considering. The market price of votes assumes mostly self-voting where the return is close to 100% (+/- a bit).
My view has always been that downvotes are the most important thing here. Merely changing curation on its own isn't very effective. One reason for this, as noted in the previous paragraph is these are really all (somewhat disguised perhaps) self votes where the split between curation and author doesn't matter AT ALL. It is all being captured into the price.
My comments on what would change with increased curation with respect to bid bots were narrowly directed at the assumption that bid bots keep all the curation rewards. That's sort of (if decreasinly so) the case now but would absolutely not be the case under 50/50. Whether that really changes things in a fundamental way is doubtful (see above).
Okay, agreed, and it would be after any change too. Why are we discussing this at all?
Well... because it was the reason cited above to push for 50/50, so it was what I focused on :)
We have agreed here for a long time I believe, down voting needs some serious attention, and IMO it needs it more than the change in ratio of authors:curators.
I'd rather see downvoting incentives (or more specifically, the removal of it's deterrent, aka "the lost in potential revenue") implemented and see how that plays out in regards to bots, rather than packaging both of these changes into a single HF.
What incentivizes down voting, though? Isn't it true that down voting does pretty much nothing for you in terms of making money within the Steem economy (besides the nearly immeasurable effect of distributing a small percentage of payouts back to the reward pool) and almost assures you that you'll eventually get head-hunted by one or more (probably many) of the accounts that you vote down? In other words, "SP wastage".
My thought on this is that you absolutely MUST find some way to incentivize "good down voting", something akin to the curation reward system, only in reverse, or you'll get more of what we have right now, regardless of having a separate pool for down votes (the fear of retaliation will still be there and with no real incentives to down vote in the first place).
Maybe a SMT for the down voting side of curation would solve this problem. Have it work just like up/down voting does in relation to Steem, except taking only down votes into account. Those who down vote earliest on any given post get the largest percentage of the down voting rewards for that post, with respect to their total SP, and they get considerably more the more SP that down votes on that post after them, with the (down vote) rewards pool distributing a fixed supply, irrespective of how many accounts, or how much SP, down vote(s) over any given period.
Does this type of SMT stand any chance of reaching a dollar (or even Steem) valuation capable of offsetting the fear of down voting retaliation? I think it's worth a shot.
Nothing incentivizes it specifically, this change is more about removing the disincentive from downvoting (which right now is that if you downvote, you're losing out on potential curation rewards).
I'm not sure how an incentive model specifically could work for down votes, but at least removing the penalty for down voting would (IMO) make for a better system.
But that's my point, we ARE inherently disincentivized from down-voting, regardless of whether you remove the voting power penalty or not - it's the fear of retaliation (flag wars) which indirectly hits you with a voting power penalty in the form of having rewards downvoted away by those that we downvoted in the past.
So my suggestion is that we counter that inherent disincentivization (or the natural tendency for the majority of people to side step the possibility of voting retaliation, or "flag wars", by simply not participating) with some form of incentivization, something like an SMT that rewards "smart (useful to the system) downvoting", in an attempt to convince a larger portion of the population to play this game in a useful way, which actually might bring something like a "real consensus" as to what is good or bad content.
I do find validity in the argument put forth by @kevinwong that the extreme ratio in baseline profitability of 4-1 between self-voting and curation deserves addressing and the system would benefit from addressing it (which is what the 50/50 change does, by reducing this ratio to 2-1). It is an element of shifting the economic incentives toward useful curation outcomes and away from the useless self-voting extraction outcome. (Note: "shifting" does not mean, by itself, "fixing", it means just that).
That said, I'm not personally against just the downvote change and I think it would be helpful on its own.
@steemflagrewards gives a vote in excess of the value of your downvote/flag on abuse.
Just flag, call the bot, list an abuse catagory, and wait for payout.
They also set you as beneficiary on a post listing your flag.
Hi, I'm deeply concerned with the idea of a 50/50 reward scheme...
The numbers just don't add up. At least this not where we are supposed to be driving the platform. Please read this post, I would love to have your feedback on the subject.
Well, maybe. Right now curation rewards make up most (usually all) of the profits because the cash sends are high enough to satisfy the delegators. Presumably that would change in the 50% system and the bidbots would have to be constantly powering down and sending those curation rewards to their investors, as some of them are already doing.
This doesn't matter a whole lot, though, because the bidbots are already eating themselves. Their economic model doesn't work in a high-competition environment without SBD prices propping them up.
One thing 50% would actually do against them is make them (and everyone else) benefit less from another SBD pump. However, this could also be done by adding a two-way pegging system.
Yeah - I can see that, especially when factoring in delegators and paying out those investors. I honestly wasn't thinking about that form of bot when I responded, I was more thinking bots that were self-owned (which probably isn't many these days?).
Good point on the SBD pump phenomenon that we experienced during the last bull run. That is one thing that a 50/50 split would impact, the rate of SBD generation and the incentive of using them to sell SBD when it's way off it's peg.
50/50 would bring quite a lot of change towards the vote-selling economics. Especially in combination with cheaper downvotes / seperate manabar for downvotes.
This will result in more quality control regarding promotion as with downvotes, the profitability of the services is being attacked.
So in that sense, a 50/50 change (or another ratio higher than now) would actually be good for the quality aspect of content. Especially since it would be more relevant to vote for good content instead of bad, as downvotes could result in a costly mistake (less or even no curation rewards)