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RE: Time To Wake Up and Fix Steem's Voting Problem
Proof that n^2 is preferable to linear exist and have never been disproven
This is false. It was demonstrated to work terribly. The premise that whales would behave better because they have 'more to lose' was and is entirely false.
I would love to have a better voting system and better align the incentive to adding value. I don't see it in n^2 (nor in any curve really, without other changes). I'm open to other alternatives.
Agreed, n^2 was a disaster then, and will arguably be even worse now. In a world where voting bots command much of the SP, you wouldn't want heavy super-linear. Linear or slight super-linear is better, but isn't an acceptable solution either.
Stake-weighted voting has failed. This is no surprise, given weighted democracies have always failed throughout history, sinking into greed and corruption. There needs to be a radical rethinking of how the reward pool is allocated. Changing curves are no longer the solution.
I don't have an alternative, and neither have I seen one. The only suggestion I can make, that'll make Steem appealing to me again, is canceling the common Steem reward pool. Instead, let SMTs compete for the best solution. I'm willing to bet the SMTs that are moderated with account-based style voting will attract much of the actual community engagement. But the totally free market SMT competition (as Steem is today) has every chance too, if that's what the market leans toward. Steem benefits by being the core asset for all SMTs. I know this will come as a ludicrous suggestion, and I don't expect anyone to agree to canceling the Steem reward pool. But that's all I have to say, I've given up on trying to reconcile stake-weighted voting at this stage.
PS: The idea that the largest stakeholders will "act in the best interests of the network" has proven to be false, time and time again. This is no surprise, either, as throughout history the powerful have always acted in their own self interests. There will be always exceptions, of course, but such a system is unsustainable until every single stakeholder of the network is not selfish.
They may well capture community engagement, which is fine, and may add a lot of value (censorship resistance, accountability, etc.) But I doubt they will have large reward pools. I don't really see investors voluntarily signing up to have their capital redistributed via a one-account-one-vote system.
I'm perfectly okay with this.
I also agree with you that some SMTs may come up with their own hybrid or different (including semi- or completely-centralized) solutions. Steem itself doesn't seem to have one.
I don't think so. I've proposed the same.
Interesting idea, and not all that ludicrous to be honest. Not sure exactly how you would implement it because you would have to change the whole premise of the system but sometimes a radical approach is needed.
Implementation - Minting of SBD and Steem to curators and authors will stop, and the reward pool will cease to exist. It can be gradual. Steemit.com, Dtube, eSteem can have their own SMTs. (Or they can collaborate to create one.)
Some SMTs can be stake-weighted, some SMTs can be completely centralized. (i.e. influence over reward pool is allocated to vetted accounts by owners or admins of that SMT. Miscreants and abusers are promptly banned from allocating the reward pool.) Or the best case scenario, an SMT can have a combination of multiple approaches. One possible approach would be people vote for curators instead of witnesses, and the top voted curators get to allocate the reward pool relatively. This will have to be weighted by community engagement metrics or some kind of reputation system to avoid Sybil attacks. It'll remain decentralized, but also try to achieve a more sensible way to allocate coins. Just thinking out loud here.
The point is - this will lead to competition, and who knows - maybe a couple of SMTs will hit upon an actually sustainable solution to making it work. It's clear that the Steem reward pool has failed, as far as content creation and valuation goes. Open it up to the free market, let it come up with solutions and the market will decide which one "wins".
Steem will benefit being the core asset to all SMTs.
Of course, SMTs are many months away at best, and I don't have an interim solution.
Yeah the last sentence is what I would worry about most. SMT's won't be launching till years end and by removing the reward pool I think you would be removing the biggest incentive for new people to join the platform. For all its downsides, steem has created something never before seen and there might be more bandaid solutions until we can reach an agreement on the proper direction to go.
Why not something as simple as a self-vote drains your voting power exponentially rather than linearly like a regular vote, this would do a lot to curb behaviour. Weighting content creators vs curators at 60/40 would also help with this. I think these little things could be enough to right the ship, but I agree with you that all options should be looked at and let the free market decide
Of course, none of this can happen before SMTs are ready for prime time.
There's no way to separate a self-vote from a regular vote. People can make multiple accounts and end up with the same result. Agreed on the creator:curator split, but it's another bandaid at best.
Sometimes though a bandaid is all you need to fix a cut. I'm not sure we are at the point where surgery is needed to fix the problem, but there is definitely a cut that needs immediate attention. I think maybe focusing on good rather trying to stop the bad is one way to look at it. If those who curate are receiving sufficient rewards for their effort I think the snowball effect will take over just like the slef-voting epidemic has done ths far.
There are the obvious self-votes, and there is covert self-voting - like delegating or giving away steem power to a bot that will always upvote your own content, having agreements like "I always vote for you, you always vote for me" with other account holders of the same size, etc. I think it's not good to promote the latter.
Yeah the last sentence is what I would worry about most. SMT's won't be launching till years end and by removing the reward pool I think you would be removing the biggest incentive for new people to join the platform. For all its downsides, steem has created something never before seen and there might be more bandaid solutions until we can reach an agreement on the proper direction to go.
Why not something as simple as a self-vote drains your voting power exponentially rather than linearly like a regular vote, this would do a lot to curb behaviour. Weighting content creators vs curators at 60/40 would also help with this. I think these little things could be enough to right the ship, but I agree with you that all options should be looked at and let the free market decide
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.
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'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?
This algorithm is the basis for an emerging competitor to steemit.. It's called Primas and is moving out of open beta and coming online this week. It's like Medium quality content with a community incentive system just like steemit but more fair and without the centralisation.