RE: Improving the Economics of Steem: A Community Proposal
We cannot eliminate such behavior entirely, but we can make it less economically viable.
100% this. We have to take steps to shape the system in a way where even the greediest of people will have to act in ways that benefit the whole ecosystem rather than slowly milking it to its death and forcing everyone else to either follow suit or feel like they're being left behind and wasting time when others are just aiming to maximize their own short term profits with minimal effort(read: zero)! I'd guess it doesn't take long for people to change camps, I know I'm selling almost 100% of my votes now after vocally being against bidbots since the day they appeared. I've read from all over the place here on Steem, how active members are sad that they aren't actively curating anymore. I know how that feels, I'm a bit gutted as well, this isn't the Steem we were promised at all. And if you're asking why these people don't just curate, what's stopping them, you might want to spend some time pondering how this current situation affects individuals over a long period of time. I've been active Steem member for around 2 years now and I've regularly browsed the trending, it's never been stellar but back then it was other members voting for people rather than literally anyone being able to buy the top spots (these days this is required actually) without any community support or content discovery happening. We're being shoved bad content down our throats... As you can imagine, I'm not checking Trending daily anymore.
We've all heard the saying one bad apple spoils the whole barrel, and we're seeing that in full action here on Steem. Majority of stake is selling their votes passively, content discovery is minimal and manual curation just isn't happening because it isn't worth it. Just look at our "trending", is it something to be proud of or does it show that proof-of-brain exists on this platform, like at all, and that should be our main attraction! (See reddit as an example here).
I'm not sure about anyone else here, but I'd like to one day use Trending to actually see the best content submitted to our blockchain, that's actually worth reading and sharing to others (read: interesting, quality content rather than just another ad or an attempt by the author to benefit from their readers in some way).
If we can't accomplish a trending that's actually attractive to outside visitors, this place is doomed in the end. I could go on and on why this is so important but system that's fair will attract people over something that is not. Steem has always had a hard time representing itself as a fair system, fixing these issues would help us immensely in building our reputation back up again (It's never been high, let's fix that).
Seeing all the changes Eli has done and her leadership makes me hopeful, this post is showing that you guys are ready to truly lead this ship and I really like that. We've needed a captain since Dan left!
This isn't the first lengthy post from me on this issue, and probably won't be last either as long as I own some Steem and care about the future of this decentralized social media platform.
Let's make Steem great again!
Thank you for this!
If you read the whole thing, thank you!
Absolutely agree with your description and analysis of our problem
Good economic systems force bad people to do good things in order to be profitable, bad economic systems force good people to behave badly to profit.
We currently have a huge problem of misaligned incentives: we're rewarding people the most to do something we don't want them to do: content indifferent voting. Whether it's self voting or vote selling, it undermines the content discovery and reward value proposition of the system yet we're paying all the stakeholders 4x as much to do this than to curate honestly. Insanity
This is very fixable and I'm glad Steemit Inc are now looking into this, it really is the #1 priority, well above SMTs, communities etc. And it is also relatively easy compared to the other projects.
I agree with you that we have misaligned incentive system, and think your suggestion would create better economic mechanism. However, it won't be the perfect system. There are still, while fewer, people to self vote in order to take all author and curation rewards.
Then, what do we answer to the new guys who seek maximum profit from the broken system saying they won't stop until the system fixes the hole? There will always be these sort of people.
The crux of problem is a mixture of rewards; investors want to maximize profits using contents rewards, and contents creators are competing with investors on the same resource.
I think we'd rather have to focus on SMT and separating the heterogeneous incentive system, and do experiments using different parameters with each SMT.
I think Clayop is correct and that's my general conclusion as well. SMTs will give the opportunity to experiment. I happen to believe that stake-based voting has been proven a failure when it comes to content discovery. Trafalgar's well-intentioned proposal will make Steem/it a bit better, but in the end it will simply last slightly longer than what we have now. People want money more than they want to vote for good content. Eventually, downvoting will be abused also and all of those mechanisms the proposal creates will still end with the same outcome. Therefore, let STEEM be the investors' reward layer and create some SMTs that try to do a better job of creating a reward system.
Totally areed.
First of all, Steem's inflation should be removed for rewarding the content creators and rewarding should be delegated to front-end DApps. DApps can launch their own TOKEN and reward algorithm to discover contents. Current inflation is not keeping up with low demand. If Steem did not have relative high inflation, it would easily sit at top 30 in CMC.
Steem's Inflation should go to protocol developments, witness compensation and PoS interest (2-3% vs current 8.5%). Rewarding content creators should be done with SMTs. STINC can launch their own SMT and share profit from ads with celebrity creators by SMTs.
Steem Investors can earn TOKENs through RC/SP delegations. @steemhunt is already showing a good example. Creators and DApps will figure out optimum synergy with a token.
Bidbots are not evils. They have their own business model. They can host in a front-end DApp where they can succeed or thrive. Competition within front-ends with SMTs will spur innovations.
All the front-end DApps can try their own SMTs with different distribution technique. Finding a sweet algorithms to rewarding the best content is more than rocket science. A former founder, @dan is bragging that he can fix it, I totally disagree. It needs lots of trials and errors and should be the realm of DApps.
DApps with SMTs can try different algos. @steemhunt, @actifit, @dlike and others are already experimenting. Steem's inflation and broken rewarding is helping its price.
here here!
The entire idea here is to align making more money with content discovery and making it more expensive to behave in a way that contradicts that (eg self voting or vote selling)
It's not inconceivable that with the right economic incentives, we'll reach a equilibrium of relatively good behavior that'll continue to serve the entire platform well over time. Behavior that deteriorates over time isn't necessarily an inevitable product of stake based voting. It all depends on how well we align individual profit maximization behavior with honest curation.
It's hard to abuse a modest level of free downvotes in the sense of profiting from them. They can be abused in the general sense to bully and harass people, sure, it's one of the downsides. The idea is to limit them as much as possible while still have a sufficient amount of them to turn this place around.
Just came across this reply and I fully agree with it. I can't believe just how disillusioned large holders including witnesses have become. We have been struggling to onboard people now, expect that to be 10 times harder when minnows see half their post rewards vanish. Reverse robinhoood.
Exactly this.
Investors maximising profits is not compatible with content creators seeking an audience. Throughout history, plutocracies have always ended in catastrophe. In the early days of Steem, I was optimistic because this is a new system, but the inherent greed of homo sapiens always wins, and giving them a platform that they are encouraged to dictate with their wealth was always going to end poorly.
For 3 years, we have made incremental improvements over a fundamentally flawed platform. It is about time for an overhaul. I'd vote for cancelling the common reward pool (over time) and focusing on SMTs. Who knows, maybe some SMT will come up with a new paradigm which makes this whole thing sustainable.
PS: That said, till SMTs are ready, I'd support the above proposal as an interim "lipstick-on-a-pig" solution. If it is proven that these can be implemented with relative ease. I believe it's going to make things slightly better. Maybe a 1.5/10 from a 1/10, and is thus worth the effort. I'm open to changing my mind if I see better data, evidence and simulations suggesting a better result.
This tells a lot. Because it is about humane nature.
Yes, and Steem is no different.
Indeed. Water flows downhill. This is not a problem, but the key to the solution. We need to provide a mechanism that promotes development of Steem and capital gains that is separate from the rewards intended to curate content and market Steem to new users and potential investors. We need to take advantage of gravity, not try to force water uphill.
Thank you. I've been thinking along those lines since this post came out. We need something that investors can actually do, especially if they're not inclined to curate or post and comment. Could it be RC delegation? I mean, I've never really understood what's in it for the strictly investor here other than the market, especially if they're not really aiming to participate in the social side of this platform because of less than desired returns.
Thanks to the investors the price goes up. By contrary, the inflation and rewards makes the price go down... I think is impossible to separate investors from content rewards without letting the steem price go down.
For this reason I think we have to deal with this "mixture of rewards" forever, and try to find a better distribution, like this proposal.
Yes, the original post concedes there's probably no such thing as a perfect system. But what we can do it make it less profitable to engage in behavior we don't want (eg self voting, vote selling) and more profitable to engage in behavior we do want (eg honest curation.
The right incentives are probably more powerful and effective than you have you mind. If curation pays a lot more and a moderate amount of free downvotes are available, the threat to any obvious abuse is very real. If we get the numbers right, it should be sufficient to deter most misbehavior to the point where we have enough free downvotes to take care of the actual misbehavior that were not deterred.
Also, while I personally believe a functional base economy is more important and essential for SMTs to really take off, I don't really think SMTs vs Economic Improvement is a dichotomy. Realistically, even if it took priority, it doesn't require a lot of work from a coding standpoint. It's only a small exaggeration to say that @vandeberg could knock it out in an afternoon (well maybe like a week :p). Think about how easy these changes are to implement and how important they are compared to the complexity and uncertainty of an undertaking like SMTs built on a broken economy system. If we're half right about these economic changes, then it'll represent the greatest value for cost and time investment than any other undertaking.
While I agree that the current system is flawed, I think it needs to be "fixed" at the SMT and community level. A separate downvote pool likely will end up doing more harm than good in my opinion as it will most certainly be abused and overall end up driving more people away than any perceived good it might do.
Yes, it's been painful being an active Steem user ever since bidbots came around.
I'd also welcome people to think how much more valuable and in demand would Steem Power be, if people could really affect what content gets the spotlight with it. These days it's all about bidbots when it comes to top 20 spots in trending.
Please consider my reply to the OP below, as I completely agree that we need to create appropriate incentives to promote beneficial behaviour, and reckon I've come up with a nominal solution that doesn't just tweak the rate at which ROI is extracted from rewards.
I'd appreciate being set straight if I'm wrong, and your thoughts on improving my raw proposal if you agree with the principles I set out there.
Thanks!
You guys, are like the cabana boys on the titanic moving around deck chairs instead of bailing out water.
The problem is not the economics, it is simply the barriers to use, the inability to classify and search, the lack of good graphics and standard simple wiziwig interfaces. No tutorials, long onboarding, and simple ability to dress up a post like every other blog site in the world for the last 20 years. The constant talk about rewards is not what brings people to youtube, facebook, instagram, or any other site.... It's the content and the ease of use. Simply put the UI and UX. The User Interface and the User Experience..... I joined 2 years ago and have had more people attack the group I've built up and more than 2/3rds of the people I onboarded left and will never come back because of a myriad of reasons.....NONE OF WHICH WAS THE CURATION AND AUTHOR REWARDS..... In fact, the fact that whales have been scared off the platforms for purity reasons by the pack mentality here has been easily the biggest impediment to growth, of a blockchain that has great bones.
It's fast, has a built in payment system, is easily programmable and actually serves a purpose of storing content. I suggest everyone stop focusing on the reward system and work on how to make an UI that truly classifies content (not with 5 worthless tags) is searchable and create an enhanced editor and display front end for it. That's what needed. People need to deal with feeds more effectively and have bookmarking through a outliner built into the system. Which can then be used to classify content. Kinda the way that google uses vectors in the back end of it's seach to find related content. But you guys are simple blockchain geeks and not systems architects of systems used by real people.
That's my 2 cents.....
I'm surprised there isn't more people discussing this here. While I think having some form of incentive for users is good, the rewards alone aren't enough to really spark the growth.
Mass adoption comes with ease of use and a solid user experience, and STEEM does not offer that at the moment. The barrier of entry is severely impacting the rate at which new users are on-boarded. The economy wont go anywhere good if less and less people participate in it every day.
Thanks for sharing your 2 cents.
Relatively easy to get horribly wrong as well I'm afraid. I agree fixing the problem should have higher priority than SMT (and slightly lower priority from getting rid of TTPs. I'm afraid thoug that this particular solution might actually end up doing more harm than good.
The curve, while not a specifically bad idea creates the appearance of increased social injustice. The higher curation revenues work against attracting top content providers to the platform and are likely to drive more content providers away from the platform. Not much sense curating without content. The downvote pool is a futile measure when the main problem with non-functioning self correction lies in the retaliation culture and the failing reputation system that allows crap content creators to bid not themselves bulletproof.
Yes, these issues need to be addressed, but no, not with this proposal.
I think though that it is great this proposal is here now to spark public debate. Next step I hope is to ask the community for alternate proposals.
I tried for one here, and I think it would be great of others would do the same. Get them grey cells working and keep the debate going untill we find a set of measures that have the highest probability to actually work.
I did look through your suggestions and some of your other replies
The primary economic problem we have is that 70% (rough guess) and ever increasing amount of active SP are just clawing back their own voting rewards in content indifferent voting schemes (self voting or vote selling).
We're stuck here not because stakeholders are mostly bad or stupid but because it pays us 4x to engage in these activities that negatively impact the platform than to curate honestly. That has lead to the failure of us as a content discovery platform, as one glance at trending would show.
So right now, not much of that 75% author rewards is getting into the pockets of actual non staking content creators.
All the suggestions within the EIP are designed to either directly make it more profitable to vote honestly (increased curation) or directly make it less profitable to act otherwise (separate downvotes).
Every measure within our EIP admittedly has downsides that increase as you tune up the dial. We want to leave as much possible on the table to encourage content creators to participate while sufficiently compelling most of the active SP to take part in voting that honestly reflects their appraisal of content appeal.
I can't see this being done without costs. If anyone has a realistic way of giving authors 100% of the post rewards, have no downvotes at all, no level of inequality while still somehow keeping the stakeholders honest, I'm all ears. Obviously I'm open to ideas with less costs that are effective to this cause.
The major shortcoming I see in your proposal is that I think they're either irrelevant or grossly insufficient in compelling stakeholders to vote honestly, which I view as the predominant economic problem right now. Maybe they're sound in fixing other problems, but they still mean stakers are only going to be paid 4x as much undermining the system so that's what will continue to happen.
For example I'm not sure 2. (reputation) is on the blockchain lvl or UI, and 3. (ad splitting) is certainly not a blockchain issue. Reputation is pretty useless right now, it can definitely improve or we can get rid of it until we come up with a better version. Splitting ad revenue of the front end is a business decision that's entirely up to Steemit Inc, not really a blockchain issue. It might not be a bad business decision, but from their last video, they're getting maybe $3k a month and have financial problems of their own. Dividing it up really won't do much for now, maybe in the future they can play with ideas of ad revenue splitting among posts that can have their individual ads etc.
Again, I don't think your ideas are bad, they're just not addressing the core issue of content indifferent voting being paid 4x more than honest content reflective voting that has lead to the dump of a front page and a failure as a content discovery platform. The vast majority of active SP is contributing to this due to a poor economic system and that's what I intend to fix. I'm aware of the trade offs and intend to minimize them while still having a realistic chance of turning overall voting behavior around.
I think you are absolutely right that "content indifferent voting being paid 4x more than honest content reflective voting" isn't really addressed by my proposal. But that is because I don't view that part as being most directly causal to problems with the current economic model. STEEM is two economies folded into one, and that creates a number of challenges where these two economies touch.
One aspect of the economy is made up of content providers whose contribution is increasing the intrinsic value of the platform with top content. An other aspect of the economy is made up of big investors whose primary contributions are not selling off their stake and, optionally, create incentive for top content providers to choose the platform.
A healthy economy would
From where I am standing, my proposal would improve all three of these things where yours addresses some of these aspects while frustrating other.
To illustrate, lets consider two scenarios:
I want to argue that:
With respect to Steemit Inc only making about $3k a month, that only underlines the need to draw in top content providers with advertising revenues. Advertising should be a blockchain wide economy capable of drawing in top content providers who would miss out on hundreds, and for some thousands, of euros per month if they switched to STEEM today. Given that an advertising economy would be a huge new user boost for the STEEM economy, implement it would balance against your reward curve or my fish-size bonus. Something I feel is very important from a social equality point of view.
Hope I am making sense with all of this.
We strongly disagree here. I view this as of paramount importance and absence this, we have a completely dysfunctional social media platform due to its inability to discover and reward content. (and it's a complete failure right now). I strongly believe that a working platform with respect to the above vision would in turn greatly attract users, interest, businesses and ultimately investors would benefit far more than being forced to mindlessly defecate in public to obtain their staking returns.
There's no real distinction between an economy that favors vote selling (bid botting) and self voting. You're describing the current one, they're both content indifferent behavior. If your proposal favors 10x self voting, that would eventually be nearly the total equilibrium of staking behavior (it's already like 70%), which means you can't possibly 'draw in content creators' as soon there will be literally no rewards for them left on the table.
My proposal does not favor bid botting over self voting. It's an attempt to overturn the norm of content indifferent voting which they both are. A combination of higher curation and a certain amount of free downvotes is likely enough to actually turn the dominant form of profitable voting behavior here to become a content reflective voting behavior, either directly or through use of a curation bot. Because curation is a zero sum game and there's a 15 minute tax timer, it pretty much forces fair play as long as the other incentives compel us to play at all. The hard part is optimizing the numbers around curation and amount of free downvotes to maximize effectiveness over costs.
Intentionally designing a platform that encourages stakers to vote 10x on their own posts a day and to view voting rewards as staking rewards is a bad idea. It's exactly what we have today (albeit unintentionally), it's a flaw, not a feature. The current price is indicative of investor interest in a broken platform that encourages this behavior. This is the most obvious redundant use of inflation. Why have an inflation if it's just to make investors spam on a garbage platform just to get their staking returns? Why not just remove the inflation and internalize that value into the currency itself? The only justification for having an inflation is if that inflation is distributed in a way that brings in more value than having the inflation itself, for example, steadily passing currency from the stakers to the talented content creators to incentivize them and expand into a robust social media discovery and rewards ecosystem.
I feel you really underestimate the importance of social pressure and of the potential of an advertising economy. The important distinction is that providing a functioning advertising system and removing the reputation benefits from bot up votes together removes the incentive to use bid bots and shifts the most viable business model for bid bot owners to either the 10x up vote of their own posts, or the I believe preferable 10x up vote of their own comments (as this won't affect trending and won't undermine the content part of the platform).
Your proposals taken together, especially the down vote pool make the opposite move more likely to occur. Remember, bid bots don't need to post and down voting bid bot users just for being bid bot users misses the actual abusers. So by implementing features likely to hit the own-comment up voters that leave bid bot owners bullet proof in all ways that count do in the end promote bid bots over comment up votes.
From a short term money flow perspective both may be equivalent, comment up votes don't disrupt trending and don't disrupt the reputation system and are thus by far preferable. And if you end up discouraging both, in the end this would likely lead to the big players without an intent to curate powering down and selling their stake, driving down prices.
I feel we want to keep as many big players on board for market risk sake, but in the meantime add an advertising economy that makes us less dependent on inflation all together and that can help us make abusing the voting system something that people do become socially accountable for.
I've gone back and forth on this issue, and I have both bought and sold votes, and I've frowned on it in the past...it's hard not to get into this game when you see rather banal posts making hundreds and all the top votes are bidbots.
BUT...
The value of STEEM is based on whether people want to buy it or not. Holders of the coin (and of SBD and of SP) are only going to value that stake if it is profitable.
So from the beginning, the central argument is that holders of SP get to decide how they use their own SP
Obviously there is going to abuse of that power; humans gotta human, after all.
I don't think that system changes are going to change the problems here; my guess is that we need more whales to diversify the vote power...true decentralization.
A second problem is that content value is subjective. I see posts I wouldn't spend a cent on make good return from people that value that content. Remember the old NSFW content argument?
I'm not a popular writer (not claiming that I should be either); most people don't find value in my work, and I don't think there should be any mechanic that forces others to vote for it (or conversely, to prevent others from voting for it, if I was a popular writer)
right so advertising would put money in the pools attract many more users and actually generate more content. Because natural following would bring advertisers to specific authors. If a I user wants to opt out of the advertising they need to pay a small amount of dust each day. Essentially you need some small locked up steem.
I'm not saying fill the page with ads but a smaller header, and footer and a simple sponsor's ad on the right hand under a outliner plug-in.
In addition there should be plug-ins addable to the interface which are sponsored.
It would alleviate the costs, and incentivize new content producers to join the platform.
There are ways to create incentive with code, and this OP is an attempt to tweak that behaviour with code changes. This does not tell people how to deploy SP, but simply changes the environment in which they deploy it. Tweaks are insufficient IMHO, and we need to eliminate incentive to degrade curation for financial return completely. We don't need to force water uphill harder. We need to use gravity to our advantage.
As to subjective interpretation, I think we agree that is what makes society valuable. Our interests are improved and extended by those our our fellows, and few would want everyone to simply agree with them all the time. Hell, I'd kill myself if I didn't have problems, challenges to surmount, or were denied that social benefit I desire most: criticism that enables me to stop being wrong and change my mind.
Thanks!
I'm slow today ;>
Are you suggesting we remove curation rewards, or to stop messing about with the system?
Where have you seen people discussing about mechanics that would force people to vote certain content or not?
What people have been asking for is more rewards for curation, a seperate downvote pool and other ways to actually make it worthwhile for humans to interact in Steem ecosystem rather than just sell votes passively and get their rewards for doing so.
This doesn't mean we shouldn't tweak the system rules so this place actually becomes an attractive for normal users and we can actually start competing with major social media platforms...
it could be just the semantics of how I understand this, but that sounds exactly like saying "vote for content the way the community wants you to vote for content"
One of the reasons STEEM has additional value for investors is the possibility of passive income PLUS the potential likelihood of market value increase.
you either have to remove curation rewards for curating, or face the likelihood that some people will game the system for their own best ROI. when you remove curation rewards, whether passive or active, you remove the value for some investors.
The best way for any creator to make SP is to network AND to create quality stuff. I'm not good at networking, but I realize it's still the best way.
Yes, reading your comment made me remember one proposition I really liked actually!
Separate passive investors to their own reward pool so they don't diminish the efforts of active curators! If there are people who only want to maximize their profits from investment, let them, but we shouldn't let that behavior effect everyone else negatively and forcing them to join since there's no other good option. If we do this, there will be more curators, since they can actually affect what the trending looks like. And as our content discovery actually starts working, we'll start getting more members. And as Steem Power will actually have effect after this change, there'll be more demand as well, both for passive investors and active users which will drive the price up. So in my mind this is a win win for everyone, other than those who want to see Steem not succeed in a major way.
@elipowell
Sounds like an SMT backed with an Oracle could be the solution here? That way the post rewards as viewed by the SMT may choose not to include bot votes and self-votes.
Yes, SMT's could try a lot of different schemes, and I'm also interested in making one that focuses solely non promoted ecosystem.
I think that we can indeed almost completely eliminate such behaviour, with appropriate incentives, and do far more than merely reduce it's impact. While some folks will do irrational things (as do I, by not delegating to bidbots) few rational people intent on prudent finance will act contrary to their financial interests. I hope I'm not irrational, but merely more highly value other metrics than financial.
Tweaking the rate at which profiteering extracts rewards intended to promote curation can tweak that behaviour at best. We can eliminate incentive to do so altogether, and we should.
Thanks!
Well said and I agree to the part that we should try our best to atleast try and incentivize the behavior we want to see to the fullest rather than just watch by as people create services like bidbots which totally alter the ecosystem in, what I'd say, a destructive way.
Nice rant, but honestly your just saying the most obvious that everybody already knows and is experiencing here on Steem.
The question of this post, from our lovely Steemit Team, was how to fix the problem?
I don't read any solution from your comment and still its trending on top of all others.
Its not only the reward mechanism that makes Proof of Brain sometimes odd, its also the narrative of people that they like rants more than solutions.
I would like to see a comment on top that provides are real alternative to the current reward system and not just the overall repeated mantra of problems that we are already aware of.
Oh, sorry. This topic has been discussed over and over again by several members of the community for a long time now, so you tend to forget not all are educated on this topic. The current issue is that passive vote selling is the most profitable thing to do here, so we need to increase in any possible way an active involvement. Increasing curation rewards and adding a seperate downvote pool has been suggested for year or two now by the community, I think those are first good steps towards better situation. With these additions we'll see more curators and they'll be pushing good content up and bringing bad content to where they belong, making buying content to top not so profitable. I've probably seen and forgotten many other good solutions also... It's been a long time. Finally it's nice to see that the Steemit Inc is ready to acknowledge the problem, or to say it out loud rather.