How should Steemit Inc decentralize their stake?
In the 2017 Roadmap, Steemit Inc pledged to decentralize their stake. Here's what they had to say.
Of course, Steemit Inc will continue to invest in initiatives like SteemFest, developing the Steem blockchain and Steemit.com, and hopefully soon, marketing. However, while all of that seemed like a significant portion of the ~$7 million stake at the time, today, Steemit Inc's stake is closer to ~$350 million. Increasingly, there are calls from the crypto community in general, and the Steem community in particular, to achieve a better distribution of Steem tokens. To be clear, I'm not fussed either way about who holds tokens, but if this leads to greater adoption, as an investor and witness I agree it's something that must be done.
Indeed, it might be beneficial to Steemit Inc too - if a large number of crypto whales refuse to buy Steem because of the distribution issue, Steemit Inc may yet leave with a higher valued stake in USD / BTC terms, even if their Steem holding is down to less than half.
First, let's get through some things that must happen either way, then we'll discuss some options about further measures.
Faucets - While Hardfork 20 is set to bring a limited number of free registrations, Steem will still be needed beyond that limit. Steemit Inc has been working on an universal faucet for registrations, and I expect to see not just Steemit.com, but any app on the Steem blockchain be able to use this to register accounts. As an added bonus, all Steem used for registrations will be burned, reducing the supply of Steem.
Marketing - There needs to be a massive, multi-million dollar marketing campaign for Steem in general and Steemit in particular. It's a killer product, and would be a relatively easy sell post-Communities.
Continued research and development - Steem is one of the most advanced blockchains on the planet. Considerably resources must be invested to keep it there. The startup mentality is all well and good, but at some point, the team needs to expand to execute on the next level. On a related note, contribute to research and development for apps built on the Steem blockchain.
Community delegations - Steemit Inc has been investing in delegations, though this is currently too biased towards developers. Never forget that the content creators and curators are whom Steem is built for, and even developers are ultimately a means to that end. I hope to see delegations go out far and wide to the best communities on Steem. Mind you, however, there should be a limit to total Steemit Inc delegations - too many delegations from Steemit Inc will mean less demand for Steem Power as other users will be squeezed out of the reward pool. Currently, far too much is being delegated to too few people / initiatives.
Community events and community building - SteemFest is great, but ultimately too niche an event. Community building needs to be expanded far and wide.
And of course, keep Steemit.com running as one of the more reliable websites on the internet.
Alright, so that's a few minimum expectations of how Steemit Inc's stake could be expended, but that still leaves a vast majority.
Burn - This one's the simplest. Just send dozens of millions of Steem to @null. This directly addresses the distribution problem. Everyone left with stake now owns a significantly higher percentage of the Steem network. With a significantly lower supply, combined with the PR win a burn always brings in crypto world, will inevitably lead to strong buying pressure and a much higher price. [Addendum - As @onthewayout points out, since the reward pool is tied to the inflation of supply, a burn would lead to significant reduction in the reward pool in Steem terms. However, I do believe the increase in demand / price caused by a burn will more than outweigh this drop, in BTC / fiat terms.]
Sell on exchanges - Of course, do so responsibly, to add volumes at higher prices to entice crypto whales. Liquidity has been a problem with Steem, with very little available on the markets. The drawback, is of course, it could artificially keep price at a low level while the decentralisation of stake is happening.
Sell directly to institutional investors - A riff on #2, but potentially with the same drawbacks. It could also mean a few institutions continue to dominate the stakeholding. (Of course, that's not a problem, and the norm for any capital enterprise - but somehow frowned upon by crypto traders.)
Airdrop existing Steem Power holders - Existing Steem Power holders will increase their stake proportionately. It'll also drive significant demand for Steem, and lead to the price skyrocketing in the short term. As we have seen before, there's always a frenzy when there's free coins on offer, whether it be forks or airdrops. The drawback here is, the supply remains the same, and a medium-term dump will follow as people start powering down following the airdrop.
Airdrop the "best" Steemians - This will probably be the most controversial, and one I don't support at all. However, it'll probably be the most efficient way to really improve the quality of content in this place overnight. Of course, power may corrupt the most honourable, so that's a risk too.
Addendum - 6. Airdrop existing Steem and Steem Power holders - As suggested by @smooth, this is similar to #4, but airdrops on both Steem and Steem Power holders. (Will need exchanges to co-operate, of course, but that shouldn't be an issue) Crypto traders tend to favour liquid over lock-in, so this does make more sense to me than #4. It'll perhaps lead to a steeper dump short-term.
This is, needless to say, a quick and incomplete list. I'd love to see you add to this - what do you feel would be the best ways for Steemit Inc to decentralize their stake?
ok. this powerfully stimulated some thought, and just spun out into a sixth possibility, elaborated on here:
The $1 Billion Steem Development Fund: How Steemit Inc.'s Stake Could Be Best Allocated To Grow A Thriving Network Of Applications And Users...
Would appreciate your input - and if you dig the idea and might be in a position to share it with any of the parties capable of effectively advancing it, share where / with whom appropriate. 🙏
To my mind the biggest problem with Steemit right now is that the site still needs a lot of work. Good content gets buried fast and easily and becomes very difficult to find minutes after its posted. I'm pretty getting off-topic a bit with this. But if a decision here can be applied as resources in some way toward site improvements, then that's the option I'd favor.
Communities are incoming - that'll vastly improve discoverability. Granted, development on that has been achingly slow, but I do hope to see it on Steemit.com by mid-2018.
It's basically akin to Subreddits. Much more effective than tags.
@ned
himself has said that sadly, this is as good as Steemit will be. As they are focusing on the development of the Blockchain itself an an interface is something that can be left for entrepreneurs to come create.If im not mistaken of @ned's vision, he forsee that Steem will be the backend infrastructure of which thousands of social media will be built.
He intends for steemit to be dwarfed by other sites.
Edit: I've been corrected by both @roadscape and @ned himself that it is not true. Steemit will continue to be developed by the wonderful team at Steemit .Inc with a dedicated and large team. I am actually very happy that I was wrong.
This is not true, there is a dedicated steemit.com UI team and planned enhancements.
There is? owh I must have been mistaken then...
Steemit is continuing to be developed with a large development team - The Steem ecosystem will also grow and may grow larger than steemit
True. The rate at which steemit community is booming is mind-blowing.
i guess the question is: is the "user directed inflation model" any good.. since its inception the rewards have largely gone to those who manipulate the system the best.
Define "manipulating the system". It's really a free market and anyone can do what they want with their Steem power.. And its up to everyone else to decide whether a person's upvote is justified. or should it be countered by a downvote.
The current iteration of user direction inflation model may have it's flaws but it's the best one we can work with.. I have my hopes up for the potential it can go.
Manipulating the system: the original intent of Steemit was to reward quality content, not increasing your own payouts just because you can. It is the content creators who make the platform interesting, not the bots, voting schemes and 1000s of sock puppet accounts.
You see, as it stands, Steemit is promoted as one thing, but in reality is another. This is what leaves a bad taste in people's mouths.
They are in effect, "duped" into participating on the platform, only to realise at some point later that simply creating good content does not win you a fair share of the rewards because others are gaming the system. This is no better than Zuckerberg and FB.
You hit it right @leoplaw!
There are some great sites created already, like Dtube and Dlive; it us actually rather exciting. I wonder if anyone us creating more steemit readers like esteem. Perhaps they can figure out some more useful filters.
It's to come i guess. Any entrepreneurs who wants to seize the opportunity offered by the steem blockchain can come up with an app to take a shot ..
.
Oh, that's the first I've heard of that. That'll be great. The tag system isn't a super effective method of separating content.
I think a solution that would support exactly those communities would be ideal. Maybe through some sort of voting amplification that would distribute some extra Steem among creators adding the most value to their respective communities.
I do hope to see Steemit Inc delegate to many communities far and wide. Curators can earn curation rewards.
This is a great idea. Building a community is very hard work, and it would be very nice if Steemit Inc could incentivize it.
At steemit, communication very important
I would like to see a semantic search, apache stambol or even solr.
I've built a large music community called Open Mic that supports hundreds of musicians a week and onboards lots of new users. There are even Steemit meetups of musicians happening around the world that center around that community. Any development that supports bringing more people to the platform deserves support.
No, that's directly on-topic, and one of the many reasons why people are averse to adopting the use of steemit as their regular social media destination. Normal people just don't feel welcomed here.
On the contrary, you have a far higher chance of gaining an audience on Steem than anywhere else on the internet. This is because curation is incentivized, and you have plenty of great projects like Curie, steemSTEM and OCD (in addition to many individual curators) looking out for the best posts by new authors.
See, that's a huge problem in itself, the system is so broken that we need super-powered groups to curate, when it's something that could be done by the community itself if it wasn't for the fact that new users' attempts at curation are next to meaningless because of the math. As far as content creators go, I do admit that because of the dearth of talent on the platform it's quite easy for incoming star writers and content producers to get noticed by the groups you mentioned.
I can name dozens of great individual curators if you want. I named the groups because they are easy to recall. As for new users, they are free to power up and curate.
Yes, of course there are also individuals who curate. That's the issue, your recommendation is that they throw money at the problem, why would any sane person do that when they already have other social media accounts where their vote has equal weight by default and their social circles are already hooked in? Everyone on steemit is either heavily invested or trying to make money, turning steemit into a workplace more than a recreational site.
Another side note, VC never has the users in mind, I hope a large share isn't chunked off to some assholes who just want to flip it.
Because other social networks don't pay you curation rewards.
Curation rewards as currently implemented are a joke. You have to upvote that content within 30 minutes, and they want to further reduce that to 15 minutes in the next fork.
So, you have to be continuously glued to the screen to curate and reap a curation reward. Or use bot farms.
If curation rewards didn't have a time window it would work better. But then ofcourse, every bot and user will try to maximise gains by upvoting as many posts as possible. This points to another problem with Steem.. there is nothing to lose for the upvoters. There needs to be some negative feedback to the voters (they need to lose something in the present in order to gain something in the future).
Ganging up to get more rewards is reward pool rape.
It disadvantages everbody that doesnt join in.
The owners won't give up control until they start losing money lets get real ned is making way too much doing this
Yeah, for sure. It's hard to have a system that is "free" but also isn't full of endless garbage. It also seems impossible for any content to be lasting in any way with the payout scheme.
Anyone could make their own site, we don't have to rely on steemit inc for this. There's just not much incentive to do it at this point
Yeah, decentralization is good for innovation.
But you still need to invest time and money to come up with something better.
Not forgetting the cost of the new sign-ups.
That's a good point. It would be really cool if @busy.org or someone else actually became a real threat to being more used than Steemit as one point. I suppose that would lead to faster development for both parties.
eggsactly, couldn't have said it any better... or maybe I could, It's kind of the problem with the social media... Like 9gag for example... There're so many memes... That most times, the good ones get over-shadowed and are never seen.
Amen to your statement!
If only there were some incentive system for people to dig through large amounts of content and upvote them.
Oh, wait.
Yeh improving the site is what all the friends I have recommended come to Steemit say.
And they're not wrong. We still need some more features if we want to compete with other social medias.
I'm working on a project that would make your feed show you posts that have been voted on by people that tend to vote similarly to you. (I found this post using my test version) That way, everyone becomes your personal curators. This is the way that most social networks work. It has really improved my experience on steemit. I explain it more in this post. Sorry for the link spam but it is past payout anyway. I just thought you might find it interesting.
I'm the newst kid here and I don't have much saying on this matter, but I do agree with you @alangrant . One surely can sell part of the house, or enlarge it by investing harder on development. But resources tend to be the most crucial part in any company at long term, that's why so many end up selling and no, it's not just about money nor the lack of it. If we spend as much time finding funding instead of thinking where to fund. One could find a better solution, because like I said, it isn't just about selling nor modifying, but to have any power and means to do so. Cheers!
True
Good points. As others have pointed out, the site still needs a lot of work from a user perspective. Markdown is not mainstream; it is very difficult to find content; the very idea that Google is STILL used to search the site is mind-boggling.
I could list more, but I really believe that the UI needs work - and maybe not that much - to make it much more user-friendly.
As Steemit is more a Blog platform than a social one like Facebook, I'm surprised at the lack of organization with regards to topics. You would think the landing page would have say 5 or so main topic categories and then subcategories within. Plus where's the ability to follow certain topics, not just people? This is why posts get lost so eaasily and are hard to find with the current search method.
Is there a way to prevent people from gaming the system by upvoting just to participate in a pool? or post a one word comment just to register as actively participating? So much spam, cutting and pasting news articles and garbage to get through to find the good content. Certainly a good start but lot's of work ahead to improve the platform.
Following 'topics' isn't a part of the blockchain.
So you would have to either re-follow, every topic, every time u use another website. Or make changes to the block-chain protocol.
Spending money to make Steemit a functional modern site is hard to argue against. I think the word "beta" in the logo speaks for itself. Economically, Steem's not in beta anymore, and its primary front end shouldn't be either.
Yeah but $350m can rewrite the UI platform 20 times over.
Scaling down their holding shouldn't threaten development.
Yeah, definitely some priorities to work on. I'm hoping we get changes in a timely manner as adoption increases.
it's amazing that you say it @tomkirkham
Development on Steemit.com has been very slow, but ongoing. Their focus seems to be much more on the Steem blockchain and SMTs than Steemit. I do hope they invest in more high quality developers to speed up the process as well as improve quality.
I think steemit has developed a lot but there are still certain areas where it can be improved.First of all as u already said it's very difficult to find content. Good content gets vanished after recent posts. And also there must be a separate application for steemit with no bugs.
See my comment below, Communities are incoming. It'll be a feature like subreddits, so content discoverability will improve significantly.
I saw your comment dear. But I think mid 2018 far away. Still a lot of time to go
It sure is a long time away, but it been a year or so since they first announced it, so you've got to learn to be patient for updates here in Steemit! :)
Yes, thank you sir. Appreciation
wow words that deeply touched my heart, an inspiration for me
Thanks @tomkirkham
I would oppose airdropping to the "best" Steemians, since that would likely ultimately boil down to a centralized body determining who qualifies as "best". Since the "best" Steemians would probably end up being those that already earn significant rewards (and therefore probably already have connections to one or more whales), this could actually have a centralizing effect, rather than a decentralizing one.
Just my opinion! :)
Not necessarily, there can be a democratic vote on where the airdrops go. But yes, this will be a messy process that's best avoided.
Even if they make this process as fair as possible, certain members and communities will feel like that got screwed, making Steem very sour for them. I don't see how this process can be done without anyone feeling left out and diving the community.
This democratic vote does not work so well here when there are people holding over 20 accounts. Just saying :)
It could be stake-weighed, just like how voting for witnesses is.
Yep, but this will lead to the same old behaviour when few whales will control most of the airdrop. I don't think that there is a clear solution to this yet.
I think it would generally be helpful to get an update on the Roadmap 2017. I've heard that Steemit Inc's working on an announcement, so I guess we'll be informed shortly. According to last year's roadmap the community feature was supposed to be launched in Q3/2017, and since it was one of the most celebrated parts of the roadmap, an update would be highly appreciated. I guess the idea to focus on SMTs completely changed their overall strategy, that's why most things that were planned for 2017 haven't been implemented yet. The Steemit app is just one more product to mention here.
Communication is key :-) Thanks for bringing it again into spotlight.
I get the sense that there would be no more long-term roadmaps. It's obvious they couldn't hit many of their key 2017 targets, and in this world it's pretty much a vague guess. No one's done this stuff before (i.e. social network on a blockchain) and they have faced many challenges along the way. It makes sense, of course, and is a part of maturing as an organisation. After all, you don't see Samsung telegraphing their plans for Galaxy S10 now. They'll only announce Galaxy S9 when it's done and ready to ship soon.
Thing is that stakeholders of Steem have actually a right to know what Steemit Inc's plans are since that's what they're actually investing in. I'd rather compare it to a classic relationship between a stock corporation and their shareholders than a corporation like Samsung and their B2C end consumers who have actually no influence on the business at all.
I really think transparency is the key driver to trust here, and trust is fundamental for investments.
They might give less details on their plans, but I really don't believe that they should try to sell a black box to their partners.
On that note, Samsung doesn't telegraph concrete plans to their shareholders either, till they are confident about it. Samsung shareholders will know Galaxy S10 is in the works for 2019, but they won't know the exact price, release date and feature set, because Samsung Electronics themselves don't have that information yet. Anyway, all of this is irrelevant :)
There should absolutely be transparency, but only about things they themselves have knowledge of. There's transparency in their GitHub - it's easy to follow the development of Hivemind (the backend that drives Community) on GitHub. It's fair to announce that they are working on such a feature, and publish the specification (which again they have done to GitHub). However, saying something like "Communities will be ready Q3 2017" is naïve and self-defeating, and causes wholesale disappointment and lack of trust across the board. Instead, give out concrete details, including release dates, when you actually have the necessary knowledge to be confident about such a statement. Traders and shareholders alike will have far higher confidence in an organisation that delivers their stated goals on time and with the announced feature set.
I fully agree on what you said here. Also actually nobody needs so concrete release dates. Knowing that they're giving priority to certain features or projects already provides a lot of confidence. In the end it's the direction we agree or disagree on and the overall vision that might motivate us to invest or not.
Thanks for the valuable talk :-)
There is transparency if you look for it. Check out github to have an idea what they are doing. You can see what part of the SMT's is already developed and what they are working on.
https://github.com/steemit/steem/projects
If you are a developer then this might be of help. If not (and that applies for the majority of these 370,000+ active users), then it won't.
https://github.com/steemit/hivemind/commits/master
Interesting response.
I kindly invite you to watch the interview between David Pakman and Andrew Levine where Andrew (who is part of Steemit Inc - what I actually don't need to mention) says that you can follow the whole process of all these projects on github but a normal person would never understand what's written there.
Timestamp 04:47 min:
I really don't believe that your purpose is keeping the majority of the community out of your communication.
I would say definitely the burn solution would be the best thing to do. 50% I think would be great.
Then airdrop another 25% to Steem Power holders. These are the ones who really believe in Steem. And with this you get a good distribution as well of this other 25%.
I agree burn would be the ideal solution, but that will obviously see a lot of friction from the Steemit Inc management.
I get why they might not want to burn their Steem, but I believe that this will create a much bigger demand for Steem, ultimately leading to it rising a lot in price. I'm fairly confident that this will be a good financial solution for the long-term thinking. However, that's easy for me to say, and I might feel otherwise if it were my millions that were on the line.
Doing the right thing is not always comfortable. Burning them is the best for everyone.
I think after doing it the price could go up 5 times... So Steemit Inc. would be better off by doing it... although they might feel not comfortable because there is of course no guarantee that the price would triple at least...
Agreed, It would help keep the price of steem up and reward the loyal users. Also selling some to get more developers working on Condenser would be great investment.
Burning the stake of the steemit account will reduce the author rewards by about 1/3. Remember that the rewards pool comes from inflation and the amount of new steem is a percentage of the total supply.
Since the stake of the @steemit account is not part of the actual circulating supply burning it will not have any direct impact on the price of steem while reducing the marketcap and size of the rewards pool.
You don't and can't know for sure what is the effect on the price from the steemit account. Investors know that 41% (based on quoted number, probably not that now) is out there and may be sold, so it weighs on the price. Looking at the worst case scenario, that is potentialy a huge pile of STEEM that may continue to be sold and depress the price (and/or limit price rises) for years to come. That is absolutely something that matters to the price. If it is burned, it can't be sold and does not weigh on the price.
Of course, no one can know for sure what the price will do in the future nor what the effect of any action (such as a burn) might be, but to suppose it has no effect is an extreme claim and unlikely to be accurate.
There was a volume last week of about 500 million dollars in a day... they could have divested 50% selling it easily... this would have hurt the price temporarily, but then no one party could hurt the price anymore like they can do now..
You are correct we can not predict what reaction investors will have in that hypothetical scenario. In the short term we will see a small reduction in the supply (after all just between Poloniex and Bittrex there are is already about 45 million steem that can be traded which amounts approximately to 1.8 years of inflation at the current rate).
Inflation is less the issue than 41% of the total supply which is always going to be a massive amount with enormous direct and indirect effects on the market. Inflation is currently about 8.5% per year so 41% is more than 4x as much as one year's inflation. That is, if Steemit decides to divest by selling over a 4 year period that is more than doubling the inflation. And that is not implausible, as they have been selling regularly since the start.
I agree, divesting the stake will have a direct effect on the tokens available on the market and therefore on the price. Even if most of it is powered up it will effectively dilute everyone else (depending on how it is allocated). The real issue is the existence of that massive stake. To be honest I would prefer that Steemit burn their stake even if it means a short term reduction in the rewards pool.
In Steem terms, yes. However, I'd wager there'll be a massive pump shortly following a burn (that's just how the crypto markets work). It'll stabilize somewhere, no one knows where, but I'm fairly confident it'll more than offset the drop in reward pool in Steem terms.
That is a great point, and one that I had overlooked.
On the other hand divesting that stake will effectively dilute everyone and probably depress the price in some scenarios. Either way this only proves that having such a high percentage of the supply is a liability to the whole network.
That's a very good point that I have not seen anyone make before. But it's certainly very interesting that it will lead to a lower reward pool.
While it might not have a direct effect, I believe that a potential burn will give faith to investors who might be skeptical of investing because of the huge stockpile held by Steemit Inc.
This reduces the total amount of outstanding STEEM, which reduces the overall market cap - an important figure for marketing purposes (and ranking on the large index sites). It's probably not the best route as a result, because it makes the platform seem less important to an outsider.
That is certainly true if the price is constant. However, news of a burn can drive significant demand, and could easily offset the reduction in supply. If the price multiplies several times - not uncommon in the crypto world, as we all know - the end result could be a market cap that's far higher, despite the lower supply.
It's not clear to me as to which of these methods will be considered favourable by the wider crypto community, but burning does seem popular with the Steem community, judging by the many comments to this post. Personally, I'm leaning towards #6, though I'm aware realistically there'll be a bit of #2 and #3 as well.
Suggestion: give some to the @steemstem user who supports the #STEM and #CTIM communities. I would look at some communities that have started to grow and consider giving some of that stake to them with a condition that they cannot power down the charitable given stake (so they can use the charitable stake to support people who post quality content).
I like the other idea of burning the stake, only because it does equally reward all users who've taken a risk so far. However, some community members have done a fantastic job of helping their communities.
UPDATE: wrong user!
I absolutely agree @steemstem should get a massive SP delegation. What you're talking about is basically a delegation. The delegatee can vote with the stake, but it is still owned by the delegator.
A condition like that is not enforceable if they donated the Steem Power directly.
@null should get it all, all but a portion for a group of developers that can be awarded through winning a contest, a contest for developing the best interface for Steemit.com, one that includes a way to bend reward pool rape into a dating game where no means no and at the same time turns abusive whales into eunuchs.
There are mainly two kinds of people on Steemit; the investors and the content creators. Currently Steemit favours only investors. When I invite people to join Steemit, I always tell them that they might get no rewards if they do not have money to invest.
It's difficult for curators to check the common tags, let alone new tags that newbies may be interested in. So for Steemit Inc to decentralise their SP, I agree with you for them to support communities that create contents or organise Steemit campaigns not only development communities.
There should be an application form for these communities, because it's really difficult for a community to get the needed visibility on the network. Recently, I started a community to bring creatives to Steemit. I'm glad some users liked the idea of the community though, was wondering how existing Steemians may react. I would like you to check out the intro post of the community project here and let me know what you think.
I read some time ago that the amount of a coin in exchanges influences the price of the coin. I'll suggest they put at least 25% of their SP (after powering dow) in exchanges, it's just my opinion though. The price of Steem itself will definitely bring new members. In December last year, the influx of persons to the blockchain was really high due to the prices of SBD and Steem. If something like that happens often, Steemit will even need more servers.
I agree that there should be a transparent way for communities to apply for delegations.