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RE: STEEM PROPOSAL: Offsetting Steem Power Debasement Through Unobtrusive Advertisements
I voted this up because I support the discussion, even though I'm not sure about the specific proposal.
I'm a huge fan of the incentive structure as currently conceived. I think it's cleverly designed. If you sit back and do nothing, your SP balance will grow substantially. Contribution bonuses are generous without hurting less active users in any way.
EDIT: The debasement that occurs is the debasement of liquid Steem. There is no debasement of Steem Power. Steem Power is already growing at a blistering rate. What you have identified as Problem #1 in this post is inaccurate. You are somehow confused about how money is created here.
" ... I'm not sure about the specific proposal. I'm a huge fan of the incentive structure as currently conceived. ..."
If you are a fan of the current incentive structure, and are mainly interested in long term investment of Steem through buying SP, then you should like this proposal. This proposal is intended to convert Steem's web traffic into money, then distribute that money proportionately among SP stakeholders. If you are a SP stakehoder and like free money, then you should like this proposal. I think they key is making the advertisements unobtrusive while still making it a lucrative endeavor for SP stakeholders.
"The debasement that occurs is the debasement of liquid Steem. There is no debasement of Steem Power. Steem Power is already growing at a blistering rate. What you have identified as Problem #1 in this post is inaccurate. You are somehow confused about how money is created here."
I suggest re-reading pages 35 through 38 of the Whitepaper. Some applicable quotes from the Whitepaper:
"Because 90% of all STEEM created is distributed back to holders of SP, the result is similar to having a 2:1 “split” every year rather true inflation. The total rate of expenditures used to reward contributors is about 10% of the market capitalization per year, a rate well below what Bitcoin sustained for the first 7 years after it launched."
"As of May 1, 2016, over 98.49% of all STEEM has been converted to SP. This demonstrates that demand to hold long term dominates. In this environment both liquid STEEM and SP are diluted to fund rewards.
For the first 2 years of Bitcoin’s life the network sustained an annual inflation rate of over 100%. For the first 5 years it was over 30%, and for the first 8 years it was over 10%. According to the tool for estimating future inflation included with the Steem source code, Steem by contrast will achieve an instantaneous annual rate of approximately 12% after just 1 year (not including the effects of SMD operations)."
I think this is where most people get confused (I have bolded the confusing part):
"Creating new STEEM to pay an incentive to a particular user or group has a negative effect on every other user’s balance in terms of their percentage of the STEEM supply. If exactly 90% of the STEEM supply is held in SP, then the negative effect of Contribution Incentives on SP holders’ balances is exactly balanced by the positive effect of Power Incentives."
I made some slight edits to the proposal to point this out:
"Assuming over 90% of STEEM has been converted to SP, and SP stakeholders don’t participate and try to earn a portion of those contribution incentives themselves, then this results in Steem Power stakeholders being debased by approximately 11.11% for all STEEM printed for contribution incentives."
and
"Leverage Steem’s web traffic by offering unobtrusive paid advertisements to third parties to reduce the SP debasement that comes from the printing STEEM for contribution incentives (when over 90% of STEEM has been converted to SP.) It is the intent of this proposal to distribute this added revenue stream to long term investors of the Steem network (SP stakeholders)."