HF21: SPS and EIP Explained
Hello Steemians, yesterday we announced the release of the code for Hardfork 21 so that public testing may commence. This release candidate includes the Steem Proposal System (a/k/a SteemDAO) along with a long-term funding solution, and the Economic Improvement Proposal (EIP). In this post we want to go into more detail about the code we submitted relating to these two features. These changes are quite technical, and we’re sure people will have even more questions. We invite you to include those questions in the comments section below so that we can answer them in future posts.
The SteemDAO/SPS
The SteemDAO was a concept proposed by @blocktrades to allow Steem users to publicly propose work they are willing to do in exchange for pay. Steem users can then vote on these proposals in almost the same way they vote for witnesses It uses stake-weighted votes, but voters can vote for as many proposals as they want.
Steemit paid $50k USD to @blocktrades for the development of the SteemDAO. Once approved, and after enough time has transpired so as to demonstrate the security and stability of the system (about 1-2 weeks of operation), Steemit will provide initial, one-time funding, by converting 200k STEEM to SBD which will allow the market to test this new feature.
Long-Term SteemDAO Funding
At the request of the Witnesses, we have included code in this release that would add a long term funding mechanism for the SteemDAO/SPS. If this hardfork is accepted by the Witnesses, 10% of overall inflation (pulled from the rewards pool) would be used to fund proposals made through the SteemDAO/SPS.
Decentralization & Sustainability
It is important for the long term sustainability and growth of the Steem ecosystem that there be a decentralized mechanism for incentivizing the development of projects that will add long term value to Steem. Those projects can take the form of development efforts, marketing efforts, or anything else. Steem’s Proof-of-Brain algorithm was not designed to incentivize projects with long gestation periods and which require significant upfront capital expenditures. This was why @blocktrades proposed adding the SPS/SteemDAO to Steem and why Steemit agreed to fund that development.
Funding Valuable Initiatives
While we have agreed to provide some funding to the SPS, our resources are inherently finite. That means that the SteemDAO would, by definition, be unsustainable if Steemit were the only funding mechanism. This was essentially the argument that the majority of Steem Witnesses made to us, and we agreed. @blocktrades has used their experience with previous chains and worker proposal systems to design a system that should be very good at allocating resources to projects that Steem stakeholders believe will add tremendous value to the Steem blockchain, thereby benefiting all Steem stakeholders. Think of the SteemDAO as a decentralized tanker of rocket fuel that can be used to pour fuel into high-potential projects so that they can take flight. But if the SteemDAO has no fuel in its tanks, it can’t do its job.
As far as why the funding for the SteemDAO is coming out of the Rewards Pool, that was ultimately a decision that was made by the Witnesses, and we agree that it is an acceptable solution to the problem. The Rewards Pool is not shrinking, it is being updated so that it can reward a wider variety of creators (including developers, marketing firms, influencers, etc.) so that even more value can be added to the ecosystem, which benefits everyone.
Economic Improvement Proposal
At the request of the Witnesses, we have included code in this release that would implement economic changes which alter the incentive mechanisms to be better aligned with rewarding high-quality content. Last month we publicly voiced our support for a proposal that had been presented by multiple members of the community and which aligned with certain suggestions we had made in the past relating to a convergent linear rewards curve.
Shortly after starting the conversation, the Witnesses came to a consensus in support of adding the improvements to the upcoming hardfork. For that reason we have added essentially 3 elements to the hardfork which we are referring to as the “EIP.”
- A convergent linear rewards curve
- A separate downvote mana pool
- Increasing the curation rewards to equal the author rewards
We believe that these three changes, when packaged together, will shift the behavior of Steem Power holders in a positive way. Under these changes self-voting and bidbot usage will become less profitable than curating good content. While on paper author rewards are reduced, and curation rewards increased, we believe these changes will make it easier for good content to be discovered and rewarded, simply because that type of positive curation behavior will become more profitable under the EIP.
The net effect over time will be that more rewards go to good authors. Users should also spend more time curating content rather than voting for themselves or delegating out their power to bidbots because it will be more profitable for them to do so.
Convergent Linear Rewards Curve
While we can’t know for certain how these changes will affect the system, we do know how the system is behaving now and there is consensus that the system is functioning sub-optimally. Our decision to use the constant 2e12 in the new rewards curve is based on the desire to not change the system too much (because we know that the system still functions), while trying to make modifications that reduce undesired behaviors. In other words, the 2e12 is more similar to the existing linear rewards curve than either 2e11 or 2e13. The relevant behaviors are at the ends of the curve. For the majority of the curve, the payouts are nearly identical to a linear rewards curve.
Separate Downvote Mana Pool
Under the EIP, you will be able to render a certain number of downvotes for free (i.e. without reducing your voting mana). The way this works is that the Steem blockchain protocol looks at 25% of your voting mana and calculates how many downvotes that would grant you. Under the current system, the moment you started downvoting your voting mana would go down. Under the proposed system, Steem would basically ignore those downvotes with respect to your voting mana.
Your voting mana won't diminish, which means you can use that mana to reward more content. Once you use up those downvotes, if you continue to render downvotes, those will once again consume voting mana. This is an important mechanism for regulating abusive downvoting, but by making a percentage of user’s downvotes free, this will lead to more users downvoting detrimental content.
Here are two pie charts which illustrate how Steem’s yearly inflation is distributed now, and how it will be distributed after the changes.
Before:
After:
The Witnesses
While we agree that all of the changes requested by the Witnesses represent a positive step for the Steem blockchain, it is ultimately up to them whether this hardfork is approved, and they serve at the discretion of you all: the Steem stakeholders. Steemit, Inc. and its representatives do not, and will not, leverage our stake to influence this decision. Therefore, if you feel that your Witnesses are not representing your interests then we urge you to exercise the rights granted to you by this decentralized platform to elect Witnesses that you believe will represent your interests.
That being said, with respect to Hardfork 21, we found that the Witnesses you have elected acted rationally and responsibly, working together to develop solutions and come to a consensus on changes to make Steem a better place for everyone, while setting the stage for Smart Media Tokens.
Prepare!
Don't forget, if these plans do move forward, you will soon be able to submit proposals to the Steem blockchain. So start getting them ready!
The Steemit Team
Personally, I just can't believe that none of the ten percent of the funding for the SPS is coming from the witness portion of inflation, which remains unchanged.
Even a symbolic 1 or 2 % would have gone a long way to showing that we are all in this together.
Instead, it all comes directly from content creators. When will it be understood that without content creators this platform will wither and die? Why should content creators alone bear the burden?
Note, I think the SPS is a good thing. My issue is the funding. Just in case anyone goes all 'straw man.'
"Even a symbolic 1 or 2 % would have gone a long way to showing that we are all in this together."
Great point!
1% would be a 10% reduction, and 2% would be a 20% reduction. Would these be catastrophic? Perhaps not, but when the current level of witness rewards were set (as part of a previous hard fork which already cut them by 80%), that was done with a goal of maintaining a safety margin in case of realistic but pessimistic scenarios on the Steem price and operational costs. 10% or 20% reduction would be a big hit to that safety margin.
Given:
many witnesses and stakeholders, myself included, view the proposed split as the best tradeoff, despite what may seem like "unfairness" when viewed solely from the perspective of this group vs that group. Sometimes perceived "fairness" can and should take a back seat to function and good economics, particularly when you are talking about an arguably failing project which if it continues on its current trajectory is likely going to ultimately result in no one getting anything.
Finally, it may be a hard truth to hear, especially for community members and content creators such as yourself or @meesterboom who absolutely have contributed a lot, but the content reward pool by design is supposed to be an engine which drives Steem's growth, not only with literal "content" but by attracting and retaining a growing community of people who contribute meaningfully to Steem. Sure there are some who do this, but as an overall mechanism, it clearly hasn't worked and on that basis alone is a prime candidate for having a slice of its budget reallocated to better use (or at least different use with the potential for more value add).
Witnesses, by design, are supposed to securely and honestly sign blocks to maintain the integrity of the network, securely and honestly adjust blockchain parameters, and approve hard forks (which in practice includes some consultation with developers on what is included in hard fork proposals). That portion of the system has generally worked, including at low Steem prices, and most if not all of the current witnesses are doing these things well (this hasn't always been the case).
The bottom line is that witnesses are mostly (if not all) doing their job; the content reward pool has not been doing its job. Looking at this from the perspective of what is best for Steem as a whole, the reasons for the proposed adjustment to the budget ought to be pretty clear.
Different adjustments can be made in the future with the benefit of further experience.
Might I suggest we incorporate the Ferengi Rules of Acquisition to our HardFork21 code?
Thanks for taking the time to reply. Your arguments are valid and well expressed.
Honestly my biggger concern is the new voting curve which I think will severely damage my ability to reward commentors on my posts. I've spent most of my 3 years here trying to encourage engagement and incentivising real human activity.
Will changing the reward curve destroy other business models? If the problem is bots aren't there other coding solutions? If the problem is self voting are there not coding solutions to limit that activity?
I've read of others delegating their Steem Power, buying stake in Palnet and moving their activities there.
I'm keeping my eyes open, trying to learn and staying ready to make the needed moves.
The curve is an interesting question for sure. I personally believe there needs to be some curve, but not necessarily this exact one. The Steemit devs have studied things carefully and have their own presumably good reasons for proposing this particular curve. I'm pretty open minded on this particular aspect of it and will be looking to engage with both Steemit devs and the community on the matter going forward.
Not directly, since people can always move stake to different accounts, and generally tiny payouts are a huge burden on people trying to catch milkers/self-voters (who aren't always literally voting for the same account but may be voting for accounts of other friends/collaborators or sock puppets).
I'm sure your own efforts are well-indented and may well contribute a lot of value, but apart from AI (if even then) there is no way for a computer algorithm to tell the difference between your tiny votes and someone working with some friends/sock puppets to milk the pool to death by a thousand cuts, so we need to put some sort of speed bump in there.
Thanks for the raising the issue.
Thanks to you. Seems like a plunge into murky waters. I was wondering if each Dapp couldn't have their own reward algorithms similar to what Palnet.io has done.
That is one way things can work. Individual apps can have their own tokens, algorithms, and eligibility policies. For example they can easily ban anyone they want, which is one way to address some of these problems but is also much harder to do at the core level of a public blockchain.
Well, and that's the big problem. The biggest positives in the communities I'm in is that personal engagement: People reading, responding, and voting on things in comment sections they like. That's the way in which steem most resembles social media. This change is throwing the baby out with the bathwater. I'm told there are tremendous abuses of the rewards pool going on. Undoubtedly this is true. But this change has too large of an impact on the best of steem's ecosystem. This change must be struck down. I'm doing everything I can to get the witness votes needed for a different top 20, but it certainly feels like there's a wall of rich people making the decisions for us. I've invested what I can afford into steem. They happen to be richer. That doesn't make it right. They're pulling the rug out from underneath all the target demographic. You want to attract the masses? Make Steem attractive for the masses. Not for the Steem whales. Their incentive to behave well should be that they want the value of steem to go up, because they already have a lot. Changing the system so that they can acquire more steem is not going to make them behave better. They'll just have more power to come out on top while the rest of steem sinks.
Trickle down economics doesn't work. It's been demonstrated time and again that it only leads to greater wealth disparity and an overall lower standard of living. This is that.
Yes yes yes!
interestingly, in case steem price would go up to lets say 10$, all the top witnesses become multi millionaires with high monthly income that should be the incentive for any witness to be ok with some lower $ value monthly income for the work today with the low steem price. as mentioned by some others, it would been the best if everybody would have contributed to pay for SPS.
Totally, just even 1!!
@meesterboom I’m one of the few to offer to sacrifice from the witness funding to show solidarity, another very few agreed with me, I’m still pushing that agenda as you can see on my forum post https://neosteem.com/topics/thecryptodrive/tokenbb-topic-sps-inflation-funding-split-prop-1560906423422 sadly you unvoted my witness (even though im fighting for creators like you) because I got into some heated discussion with a friend of yours and said one thing to offend him whereas in the rest he was way more abusive to me.
I am glad you are still pushing that agenda, it is a credit to you.
The issue of unvoting you as a witness is a separate issue to this one.
It’s to do with the other guy who swore and slandered me way worse than the misinformed observation I voiced :)
I hold my witnesses to a high standard though.
:0D
“Let he who is without sin cast the first stone” - you never been in an argument before? You don’t think other witnesses havent? If your standards are so high why do u vote NGC, he intimidates and abuses countless ppl on the platform including women, threatened to rape one of my team members even a while back.
For the record:
https://steemit.com/steem/@nonameslefttouse/pth3gv
Hey back to what you were saying about marketing, I believe most of all the new Worker proposal projects will be MARKETINg based. I believe 1% of the steem inflation put into marketing could increase steem user base and price back to all time highs or at least $2-$4 range :D
At the current market price, it would be just under one million a year for funding. If the price raises it even more funds to get things developed with. Yes, content creators and commenters will take a hit. But because of this, our dependence on the development of the chain goes down. So say steemit goes bankrupt we can still find developers to put the changes in that we need.
This is also a very good backup plan for us, without faster forks and development steem was going to die anyway.
Yes, this is true.
My point is not against the creation of the SPS. My point is the direction of the funding being solely from content creators.
The witnesses are stakeholders too, it is only fair that all stakeholders contribute. To leave all contributions coming from just one group is far from ideal.
I will reiterate. I am for the SPS. I am not for all of the funding coming solely from content creators. When you add the other changes into the mix it exacerbates the pain that will be felt from them.
Let us not forget that highly competitive days are coming. To discourage, even slightly those that could potentially draw audience to the platform is counter intuitive.
A la fina el SPS es dinero par los testigos ellos son los creadores de todas las iniciativas d acuulación de steem .
Por eso son testigos. Crean la trampita, acumulan y después compran el voto para estar en la mesa...
Confiemos más Blocktrades que le da igual Stem queEOS. Estas Grades ideas para estabilizar la moneda Steem con un fondo especial creo que es más un pago de soporte finaciero. Las grandes ideas que tiene de ellos deben ser poque les estan pagando como asesores...... era muy bonito el cuento aquel que steem liberaria el mercado a la final hay que someterse a la mano invisible de las Crytos.
No, es no correcto
You got to remember these witnesses are also content creators. So yes they won't be taxed for securing the chain. But they will be taxed for using the stake they own. Which is used to upvote content or sale votes.
Much of the funding will come from things like vote bots and self voting whales will feel this tax, more than most of the content creators or voters. The whales who own a large amount of the stake will feel this tax more than lower users since 10% of their fee's will out shadow the normal users. So whales also being witnesses are voting yes to a tax that doesn't benefit them as much.
There is more to this, that people are overlooking.
Not all of them are content creators. In fact, some of them are conspicuous by their absence on the chain. There is far more to being invested in Steem than running a cloud instance of a witness on Privex.
The many I know of actively curate content or make posts. Yes, some don't post as much but that's because they're developing. Though some are just draining the system and i can fully agree on that.
Most of the funding is going to come from bots and whales. Since they make up a large number of funds paid out. They're taking a hit in some way which many have multiple accounts. So they will be paying their fair share in some way. And at current market cap they don't really make a lot when the price is low.
This really should be seen as an investment in the system.
The SPS is an investment into the system.
Agreed. On that, I have never disagreed.
Funding - I categorically disagree that the funding should come entirely out of the content creator portion of inflation.
Last I checked the median payout was .01 SBD. SPS will lower that reward for producing content. It's retarded to further decrease incentive to become and stay a Steem user. Retention was already at ~7.5% YOY last I checked. Reducing potential rewards will not improve retention, and will shrink the market for Steem. You might note that reducing the market depresses the price.
This tax will create capital losses, not capital gains, making an existential problem worse.
It isn't true it comes solely from content creators.
Apart from the fact that literally all rewards come from investors who are paying them (via inflation), not from people who receive them, it comes from the reward pool which pays both authors and curators (stakeholders). The latter will absorb either a 25% share or a 50% share of the SPS budget depending on whether you based it on the existing split or the post-HF21 split.
But, again, all rewards are paid by investors. Shifting around who receives them does not change that.
I think my point is quite clear. I am aware that it comes from both creators and curators.
To mince words semantically like this is merely disingenuous.
Edit, I don't mean that to sound as abrupt as it reads. I am trying to get my kids out to party :0)
Well forgive me but I do think think that it not shifting solely from creators/authors but also from curators is more than a semantic point.
Nevertheless turnabout being fair play, I do think the more important point in my reply is not about curators vs authors, but that in fact all rewards are coming from investors. Before the fork, all rewards come from investors, after the fork all rewards will still come from investors.
For investors to start spending some of that inflation budget via a proposal pool (where by the way, anyone is free to make proposals stating what they intend to do for Steem and how much they request to be paid to do it, even including for that matter, content creators) rather than continuing to spend all of it via the content pool is not changing where it comes from, it changes where (some of) it is going.
I doubt very much that there are too many investors happy with overall performance of Steem over the past few years, and the reward pool is the headline feature of Steem representing by far the largest portion of the inflation budget. If we aren't happy with how things are working, and many are understandably not, questioning whether it is doing its job, and then looking to spend some of that budget on other ways of adding value to Steem should hardly be viewed as radical.
When witness rewards were cut 80% a couple of years ago in order to focus the witness role on core blockchain maintenance and away from general project funding (with the 10% of inflation budget assigned in order to sufficiently fund that essential core blockchain role), that was done with the explanation that:
Well it has taken over two years to get here, but now were are finally at the point of doing #2.
IMO it is a completely reasonable, and even pretty modest, adjustment to make at this point. After some further experience, we can reassess.
All stakeholders will be contributing, because the funding will come from inflating stakeholders existing holdings, just as funding for everything else comes from that.
The question of allocating that inflation budget is not or should not be one of different groups each trying to grab the most they can for themselves at the expense of the others, it is or should be one of looking at how that budget can best be spent to give Steem the best chance of success.
I sincerely believe that the witness reward should not be reallocated here, not because I am a witness and am wanting the higher (or at least not lower) pay, but because witness pay already went through a process which cut it (by 80%) to the lowest possible level reasonably consistent with chain safety and security (and going forward even that assertion of safety is open to question in my view).
I also sincerely believe that the reallocation of a portion the payouts from the main content pool to a proposal pool is in the best interests of Steem. It also doesn't directly translate into a cut for content because some 'project' funding can and should move to the proposal pool, freeing up more of the main pool for content and general social uses. I for one will be looking to use some of my new downvotes against posts/comments which try to extract project-like funding from the main pool when they can and should submit their request to the proposal pool instead.
Have you ever noticed how some around here will say things like, "If these content producers were producing something of value, they could be out in the real world making money."
All that does is prove how disconnected they are from the real world. This is the real world and since so many fail to see that, they can't wrap their heads around how the arts and entertainment industry generates billions annually, in the real world. Since this platform is all the land of make belief to them, they have no problems with stepping on content producers, kicking them to curb, losing out on potentially and eventually billions of dollars, so they can scratch their heads and wonder why they can't even get a few thousand dollars pouring in, while thinking they live in a dream land.
Hopefully it's not a coma though because it would be nice if some folks around here could wake up.
If only they could wake up. If only they could see for a moment what they are creating. Or rather what they are not. As we both know if they carry on deriding content creators then they will only ever see ever diminishing returns. And then nothing. When it is too late they will try to change things up but it will be too late.
Lots of people were panicking when Dan announced Voice which in the end turned out to be a damp squib fraught with problems before it even began. There will come a competitor though, one that understands the basic paradigm and seeks novel ways to solve it.
The content creator bashers here can attempt to make it hard for them or carry on the way they are going and make it easy for them. I am not holding my breath
I don't even see how something marketed as a social media platform like Voice is a direct competitor to a content production platform like we have here. I realize some use this platform as a social media site, which is fine, whatever. What would Facebook be though if people weren't sharing content from content production platforms though? What would Youtube be if people were not sharing links on social media? Many people saw Voice as competition but social media and content production go hand in hand. Each one makes the other one better.
Bashing content here is like visiting Youtube and being angry about videos.
I think maybe because some see their own efforts and see how they run their blogs, they just assume everyone else is the same. Start running the blog like a business and act like you're stepping out on a stage with every post, and you get guys like us, and in the real world, when performed live, the seats fill up, the money pours in.
We've both entertained thousands of people since showing up here, while working under conditions that make that nearly impossible. Imagine what it would be like if the odds weren't stacked against us.
Hehe, I often say similar in that those who cannot produce content worth a damn like to run down those who can by running down everyone who does. Saying that all the content here is crap and that its ALL low quality etc. Its a porr tactic of theirs and yet sometimes it seems to work on some sheep who parrot it back blindly.
I guy walks into a bar. Tells everyone they don't know how to drink.
That made way more sense in my head.
I get it though!!!!
Yes I agree completely. Especially when some of the witness funding was said to be to help them build projects. The rewards from being a top witness far outweigh the costs, especially after MIRA, even with steem at $.40. Why we are not directing some of the inflation from them is ridiculous to me as well.
Exactly, it's ridiculous and will cause a lot of negativity
I cannot see how that will encourage new people to come here.
Witness funding was and is not intended to fund projects after it was cut 80% (I believe in HF12).
Some witnesses do get involved with projects as part of their campaign for votes, and given surplus funds under some conditions, but that's not a core part of witness rewards based on how the budget was designed.
By contrast, witness rewards were intended to support projects prior to being cut 80%. That bundling was not seen as a good approach and was a good part of the motivation for the huge 80% cut. It was always envisioned that: a) existing reward funds could be used to fund projects via voting for posts, and b) something like SPS could be implemented later to more directly fund projects without the somewhat messy process of doing it with posts. It took almost three years to get there, but better late than never.
And you think the current inflation allocation setup is the right way to go for witnesses? Their costs are fixed in USD, which means a tanking steem price could make it un-economical to run a witness node at all... which would put the entire network in jeopardy.
In this system witnesses secure the network, in a POW system the miners secure the network. Miners are not able to mine at a huge profit for long before the system corrects itself. We have no such correcting mechanism with steem...
Instead, network securers continue to get inflation regardless. Fundamentally, that doesn't sound right to me.
With the recent cost reductions to run nodes it also makes some sense for there to be revenue reductions as well and this was the perfect opportunity for that to happen.
There are no cost reductions to run witness nodes as yet. Over time the costs have simply grown, though to some extent this was expected. The MIRA version (with its associated cost reductions) isn't recommended for witnesses.
I don't think the witness reward mechanism is perfect, but if we are looking narrowly at the reward amount, I think the analysis that was done when it was reduced by 80% and set to 10% of total inflation was reasonable and hasn't changed significantly, therefore the split shouldn't change. Proposals to revamp the system in a more fundamental way can be considered. I'm open to looking at it.
Why is it not recommended? That was one of the selling points sold to us by Steemit,Inc... That this new version would help decentralize the platform as it would make running witness nodes cheaper.
I would guess it will eventually get there, but not yet. The main priority was reducing the costs of Steemit's own expensive RPC nodes, and they did that.
MIRA can reduce expenses of running a node (full RPC, seed, witness) but at the cost of a much slower replay. On my witness test node, a replay usually takes 20-22 hours without MIRA but when I enabled MIRA I gave up after 3 days of replay still not completed. For a top witness, it is critical to be able to replay as fast as possible in order to get the node back on track on events such as a HardFork where a replay is required.
MIRA will help with reducing the costs of other nodes but for witnesses nodes it's not recommended for the reason above.
Interesting. Thanks for the explanation. Was that just smoke and mirrors then from steemit,inc saying that MIRA was going to help reduce the costs for running a witness node and thus making steem more secure and more decentralized?
And by the same principle why not a thin slice off the Steem Power interest so that all beneficiaries of inflation system - fund the SPS. After all, I think I'm right in saying that 35 accounts hold over half of the Steem Power. I guess that would have been unpopular with the whales.
"When will it be understood that without content creators this platform will wither and die?"
I agree with you, but I think that it is important to mention that this platform will also wither and die without content curators, and to be honest, this platform currently lacks of real content curators.
I am on Steem since 2017.05.17, and I see that people are selfish and greedy.
Many people are writing blog posts, but only a few people cares about other people's blog posts.
Maybe HF21 (EIP) (Economic Improvement Proposal) will change this by "Increasing the curation rewards to equal the author rewards".
If this will decrease the number of bloggers (and content creators in general), and increase the number of content curators (and maybe the real, human interaction with it), then HF21 will be good for Steem.
We (the users and the community of the whole Steem blockchain) need to find a good balance between content creators and content curators, otherwise this platform will wither and die.
And I agree with you hence in my original comment I said that I agree with the changes proposed. I am all for the change to 50/50.
Something needs done and this is something. Curation is sorely lacking, whether this will truly help remains to be seen but it is something and I think that's important.
Like others have said, why not take from witness rewards and make the remaining witness rewards a proposal in the SPS system?
A fine idea! :0)
Because the system needs a stable core to function at all, and that requires that witnesses not only be paid but paid enough to always maintain stable infrastructure and contribute enough of their time to necessary 'soft' functions, but also enough so that concern of losing a witness slot is a meaningful incentive to remain a good actor (if you are doing it break-even or at a loss, who cares if you get voted out once you have messed with the chain, possibly for personal profit or paid by someone else who profits).
Without a stable functioning and secure chain you can't even conduct an SPS vote. For example, witnesses could tamper with the vote by censoring transactions, or punishing accounts which vote the "wrong" way.
A DPoS chain depends fundamentally on the competence and integrity of its witnesses Putting that at risk puts the entire system at risk.
Yes. Also, why 10%? Where did that number come from? Not just just 5%? Why not 15%? I just don't understand. Also, I agree, Witnesses should be giving up some of their funds. I think 5%, just so that we're both losing half. ;)
I would definitely like to see something coming from them. I find the fact that it all comes from the creators disrespectful of those who put the work in day in and day out.
some witnesses work harder than all the content creators combined lol steem doenst have godo content anyway it mostly sucks, mostly, we have great people but they are lost in a sea of garbage which si NORMAL its NOT ABNORMAl for a social mediasite to be FULL of trash they ALl are LOL :D But we have to actually hit a saturation point to get to the point wher ewe can actually get GOOD content rise to top liek reddit and 240 million users
just give @steemit inc tiem toi realize they MUSt sacrifice or INVEST millions of steem on NEW account creation , THEN we can onbaord millions of reddit users and BOOm we win
jajaja lomismo pense, bueno es lamisria del poder y la miseria de los gobernados d nunca onfiar en los gobernantes...es como una maldicón a voces...aunque sea 0,5 hubiera sido motivante,,,
Yes indeed, anything would have been motivating. There would be no issue if they said 0.5 but the fact they vote for everyone elses haircut is poor!
My thoughts exactly.
Witness rewards are what controls the security, if you cut witness rewards, you cut funding for a proper server infrastructure. Which means the chain might go down or worse get forked out. Which would be a distaster. I don't think it's worth to reduce chain security to show that "we are in this together"
Yeah. Right.
He is right.
I disagree that a token amount would reduce chain security. I am not talking a huge amount, anything at all would show some solidarity. Just now it smacks of arrogance against those who create content.
The most often referenced number is 1%, and I do not consider that to be a token amount, it is a 10% reduction when the starting total is only 10%. In fact I have long term concerns about the sustainability of witness funding given the declining inflation schedule, so I do think that cutting it even further is dangerous.
But really the main reasons I don't think it should be done are:
I just have to disagree. And not with any of the facts you have eloquently referenced. It is over the sourcing coming entirely from the content part. There are many and perhaps valid points you have outlined above but it just smacks of witnesses looking out for themselves.
It looks arbitrary to me and it also looks as if it was decided amongst a biased group. Of course the witnesses wouldn't vote for any kind of cut to their allocation. Were there many non witnesses in that discussion, relative to the whole I mean?
There are always options. what about the ten percent coming from the rewards pool before it is split between witnesses, content etc?
You speak on behalf of securing the chain and the witnesses themselves. I have very valid fears that anything that further discourages content creators will ultimately see the demise of the platform and not in the long term. The situation is already dire.
And I am genuinely not saying this from a worried I will lose out perspective. We need the SPS. I hope it helps us move forward but I disagree with the sourcing of that ten percent.
I can't speak for everyone. Sure it is possible there are some with that view. But, truly, you are as far as I know making this accusation with no evidence at all, and simply on the basis of how it feels to you. Is that fair?
Anyway, it is stakeholders who are in charge, not witnesses. If stakeholders think that this isn't going to improve their bottom line or just isn't the right approach, witnesses who support it can and will be voted out and we go back to the drawing board on something that stakeholders will support (or alternately perhaps do nothing at all and keep things as they are). Witnesses are really just the messengers, not the ultimate deciders. (Some, perhaps most, are of course also major stakeholders, so their views carry additional weight and authority on that basis.)
This is exactly the same as the 1% (10% cut) from witnesses already discussed.
So you think that instead of shifting 10% from the content pool, if we instead shifted 9% from the content pool and 1% from witnesses, this dire outcome would be averted? We're discussing here, an increase in the resulting content pool from 65% to 66% of total inflation. That is literally a 1.5% increase in each payout, all else (Steem price, etc.) being equal. You think that will save the (Steem) world? Consider me quite skeptical about this.
On top of all the other points I mentioned, the bottom line is that nearly all of the budget is now going to the main content pool. Shifting of any percentage from the content pool has the smallest relative effect, and has a much bigger effect elsewhere. The 1% we are quibbling over is about a 1.5% change in the content pool, and would be a 10% reduction to witness rewards. You do the math on where that makes the most difference and carries the most risk. I have already stated my view.
I understand where you are coming from emotionally and philosophically in terms of "fair" and "sharing the pain" and all that, but ultimately the substance of the argument doesn't hold up.
Cheers old dog!! As is yours too!
Can you please bring back the charting updates towards reaching the goals of implementing communities and SMTs?
Why has communication slowed down a lot again?
When do you plan to pursue STEEM listing on exchanges?
@socky that the real question brother
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@socky thats the real question brother
Posted using Partiko Android
Regarding SPS why take away 10% of the reward pool in order to pay for things that are being built anyway? This building is being done organically and the builders are actually creating business models with outside income sources. This will take away incentive! In my worst English "if it ain't broke don't fix it!"
Let's look now at the reward curve and why I hate the proposal. As a disclaimer I must first write that I have purchased about 25,000 SP at between $1 and $3!
Why I Don't Like It:
1.) If Steemit.com wants another reward model for bloggers they can use SMT's to do it. Don't mess with your unpaid builders!
The Steem blockchain is NOT a blogging blockchain so they shouldn't base everything on that! That is NOT visionary!
2.) Those of us that have built using the current reward system are going to get penalized. I reward all commenters on my posts with an upvote of at least 3% if I can't do that my community has less incentive. What about big investors that are trying to build a communtiy and reward them. Will they still invest? Probably not.
Exactly. When did we even have a debate or when was a case even made where agreement has been reached on the need for SPS? What is SPS supposed to do for the ecosystem to make it worth 10% indefinite spending rate?
How do we stop or reverse course if we find SPS is not somehow profitable or growing the ecosystem? If Steem were a company or a government how would we justify this to shareholders or to voters?
@blocktrades is certainly the subject matter expert on this, and I believe he's published a number of posts explaining the careful design of the system. The discussion was had amongst the Witnesses who are the ultimate arbiters of these decisions. Those are the people stakeholders voted for.
What the SPS is supposed to do is fund projects that create sufficient value to justify the expenditure, and that's the analysis people should perform when determining whether to vote on a proposal. If there are no good proposals, then people shouldn't vote on any proposals, and that money will go unspent. That's how you roll back the SPS, if it doesn't generate any value, don't use it or downvote proposals you don't like.
The question is how will we track and measure how much value a funded project is provided? The question of "is it worth the amount of funding it is receiving?" is a question the community is likely to ask. If a project somehow drives some sort of revenue so that the value/price of Steem starts to go up then of course we can all agree this is good.
But I am concerned we could end up with a lot of low value "projects" which developers and insiders like but which does not measurably drive according to any traced metrics. So if we are talking about increasing active users, or increasing investor interest in holding powering up, or something measurable like this then great.
Are there any current ideas that @blocktrades has in mind to be on the initial proposal list?
There are blockchain history elements generated for all payouts, just as there are for content payouts today. UIs like the many we have for existing Steem functions will process this history show the data. We know who are the largest earners on author payouts, curation, who is powering up and powering down, etc. because of the many UIs and reports that have been created by the community to show this kind of data.
The initial version includes a pretty limited web UI that shows proposals and allows for voting on them but I have no doubt that over time many additional UIs will be created to show the data in more and different ways (some may even have their funding provided by SPS, some may not)
What I meant to express but did not word very well is will the UI allow for us to track the metrics of projects so we can determine the success or failure based on how much a certain project is contributing to success measures?
If it's retention stats, or if it's the Steem price, or if it is something else, I think every project which is asking for funding should have a business plan with a profit motive. The project can be a great idea but then how does it increase the price of Steem or bring in more users or make current users more active?
Example, a game in the style of DrugWars for example could bring in new users and increase the value of Steem too if it were designed the right way. The project could be funded via SPS and then every month report their success metrics such as how many users they are gaining each month, how much retention they have, this and we can look at if the price of Steem is going up or if people are powering up more etc.
So yes, we can find a way to measure "profit". We just have to agree on which measures should represent profit.
Of course there will be funding for low value projects with the usual source of beneficiaries at the top who say we need to alter rewards to stop the vote bots that many of them profit from. Right now its campaign time promising the moon, then once in place what will be will be.
It seems only you have ever heard of kickbacks. Sadly, they are how government is run, and taxes create governments.
SPS sounds like a perfect mechanism to tax from the smallest stakeholders a flow of funds to a group of cronies with enough stake to ram through their proposals. We will see what happens when we allow a group of 35 rapine profiteers that have already managed to extract ~90% of the inflation from the rewards pool to vote themselves another 10% of the rewards.
I think we both know what we'll see.
You guys really need to work on your process and outreach.
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Thanks for the feedback!
Those with substantial stakes are inveterate profiteers, and were convincing in their assurances that they wouldn't fund development with that stake. Since the vast majority of stake is in the wallets of 35 whales, and they won't part with any of it, the only funding source left was a tax on creators, whose current share of rewards is less than ~10%.
~90% of the stake in Steem therefore will not be funding SPS, and those costs have been foisted on creators as a regressive tax - a tax on those least able to bear it. Retention last I checked was ~7.5% YOY. The median payout was .01 SBD. This tax is going to fall hardest on folks making about $.01 for their content now, and not staying here very long to be taxed already. Bye bye market for Steem. Without users the value of Steem will plummet.
The current proposal for SPS delivers 10% of inflation - the rewards pool - to fund SPS. It is completely delusional to claim that 10% of stake on Steem will ever vote to exercise control of such a mechanism rationally. There is no example of such coherent voting in Steem's history, and just because it's theoretically possible for such a thing to happen is no reason to expect it to. After all, we could all just quit arguing and fighting and world peace would break out today. It won't, and only fools will expect it to.
I have repeatedly called for prudent preparations to be made to reverse HF21 in the event my dire predictions are fulfilled. Please exercise that prudence by enabling a rapid reversal of the HF should price plummet, users hemmorhage, and market cap decline. Failing to prepare is preparing to fail.
Don't let profiteers suck the last bit of value from Steem before abandoning it's empty husk.
Just to be clear things are being paid for by steemit. We can't expect them to make every fork and pay for them. This new system would allow us to lower our dependence on any one organization.
This is a backup plan for steem, if steemit goes bankrupt we need a way to fund development not saying they will but we need to have a plan for any eventuality. This will also allow us to come up with better features for these content creators. Development doesn't fund itself, we as a community should take the hit to guarantee the longevity of the chain.
We as a community can voluntarily decide to vote for and fund proposals as we see fit. SPS being funded as a tax on the ~10% of rewards shared by content creators whose median payout is .01 SBD is undeniably regressive.
I cannot imagine a set of proposals better designed to reduce Steem's dismal retention rate of ~7.5% YOY further. Every aspect of EIP and the SPS funding proposal is going to increase the flow of the economic activity on Steem into the wallets of the most substantial stakeholders before it can raise the price of Steem, and decrease the distribution of Steem to that demographic creating all the value of Steem by creating content.
If you want to cause the price of Steem to plummet, market cap to decline further, and to reduce the number of people creating content, I can't think of better ways to do that.
And for the 'normies' like me: https://steemit.com/normietalk/@justineh/normie-talk-hf21-explained-sps-eip-what-it-is-and-what-happens-next
Very good post, much better than this one here. I think you explained the potential value of SPS. My concern remains though how do you distinguish between an idea which is likely to be profitable for the ecosystem and an idea which merely receives a lot of votes but which is a "bridge to no where".
How are the votes going to be calculated first of all? Do whale accounts get to rig the vote? Can whale accounts somehow be excluded? Do verified accounts get to vote exclusively or do accounts of a certain age get higher weight in the vote? If it's stake weighted alone then I think you can see what can happen here.
It's going to take a lot of discipline, planning, discussion, on how to rank/rate ideas. My suggestion is we need a way to try and determine how much value or profit an idea can generate for the ecosystem. Such as does it have potential to increase the value of the Steem token?
If two ideas accomplish the same thing equally but one of them burns Steem tokens and another does not then do we prefer the one which burns tokens?
If two ideas accomplish the same goal but one of them does so in a way which can bring in lots of revenue or investors then should we favor that one?
What metrics do we track to determine the success or failure?
Well this is @justineh's work, I can't take any credit but thought it was worth linking as they appeared at almost the same time.
Personally, I believe we are already on that bridge to nowhere and so almost anything should be an improvement.
There are a lot of 'ifs' though. If bot-boosted shit content is downvoted, perhaps stake will come out of the bots to curate as there will be less profit there, and a greater % of inflation heads towards curators.
Umm, same as before?
Potentially?
Not in this proposal, and likely never.
Nope.
I see some of these changes as much larger/more radical than what is being proposed - something for palnet-type efforts/SMT's to test?
SMTs could fix this I think if we can distinguish using SMT holding how verified an account is by percentage or points or something like that.
The concern I have is what would stop whales from simply rigging the votes and then voting for their pet projects without regard for the revenue it generates for the ecosystem?
If you look for example at corruption in certain industries historically such as construction for example? We know how a construction project can end up costing way more than it should and take way longer than it needs to take etc. When people start voting directly on how to spend money it also is historically known to create infighting, even civil wars happen over these sorts of disputes.
I wish more thought could go into the on-chain governance aspect so that we can really know it's what the community wants and that all factions of the ecosystem are equally represented. Example, content producers are a faction, witnesses are a faction, developers are a faction, and different politics are emerging right now favoring one or another faction.
Sounds like a job for Oracles
https://steemit.com/ned/@steemitblog/ned-scott-and-theoretical-of-steemit-explore-oracles-on-steem
Ah OK, your previous comments and this one I think relate more to SteemDAO - I didn't catch this initially.
I think the voting here is planned to be stake-weighted, but I could be wrong. I live in hope that those with the largest stakes would wish to grow the value of their holding by voting for the projects they think have the best chance of taking Steem forward in the medium/long term.
See palnet.io for a first glimpse of this. The whales there have been made so on the premise that they wont self-vote and cannot powerdown for a year. And a high stake account 'nopal4u' sits at the top of the rich-list ready to govern.
Pal is interesting. I assume Pal is an SMT right? Doing this with an SMT makes sense but I think the people proposing Steem DAO would have had better success in promoting their plan if they actually showed that there are some good ideas waiting to be funded, some whitepapers, business plans, etc.
You also have hoped that those with substantial stakes would actually curate, instead of extracting ~90% of rewards into their own wallets via manipulating rewards with those stakes. How'd that work out?
Hope springs eternal, and a sucker is born every minute. Human traits are predictable, and every part of EIP is designed to increase the profitability of profiteering, and that is also a feature of this funding mechanism for the SPS.
It isn't particularly hard to design mechanisms that prevent profiteering, and instead enable investors to rely on capital gains for ROI. Capital gains have encouraged investment for thousands of years. Profits have also been possible from hostile takeovers that extract the value of businesses while eliminating capital gains. Selling the means of production of a company whose stock is cheap enough can create profits. It destroys the value of the company stock though, as well as the company.
The means of production of Steem is creators, who cannot be sold. Their product can be profited from by the various mechanisms enabling stake to extract the rewards creators make possible, though, and we see that ~90% of rewards are extracted that way today. Now taxing that last ~10% of rewards can increase the extraction of rewards before they can create capital gains.
Guess what's going to happen? Well, you don't have to guess. You can simply predict that the same people are going to do the same thing for the same reasons that they have been doing, only they're now going to be able to get more rewards for doing it.
There's no point in hoping some words will change human nature. Reasonably preventing extraction of the economic value of content creation before it can increase the value of Steem is easily doable, and investors - not profiteers - have been provably investing for capital gains since prehistory.
HF21 is not going to change human nature, but is intended to enable the profiteers to extract even more profit. There are no experienced investors on Steem today, because capital gains are prevented. All substantial stakeholders have been, are now, and will continue to act as they always have, and parasitically extract every satoshi of value from the rewards pool before their competitors can. They have the voting power to effect what they want to see, and this is what they want.
I won't have hope until they've sucked every bit of value they profitably can out of Steem, and leave to parasitize their next target. Then maybe we can implement rational mechanisms to create capital gains and attract investors.
Nothing. This is the kickback generator every corrupt bureaucrat dreams of.
You must be young. I'm pretty old, and experience has taught me that things can always get worse. Indeed, without extreme measures, things going badly are very hard to keep from going worse. EIP and the SPS funding mechanism aren't radical changes to stake weighting manipulations. All they do is increase the profitability of manipulating rewards mechanism via substantial stake to extract rewards before that value can raise the price of Steem and create capital gains.
And if the security and stability fail what will happen then? Will the SBD be reconverted to Steem, or just thrown away?
And if the Security and stability do not pan out will this be immediately HardForked out or will the funds be diverted to something else?
Steemit agreed, as has been pointed out over and over and over again when ever Steem and Steemit are bought up it is that they are different and not the same entity. Did Busy.org, partiko, eSteem, and the others agree to fund blocktrades? The witnesses protect the Blockchain Steem,that means all users of the blockchain, and all organizations on the blockchain come under their umbrella of protection. That includes busy.org, partiko, eSteem, and other forms and methods of accessing steem blockchain, not just steemit.
This is a lot in one post, so since it is an explanation post can you elaborate on what will happen to SPS if blocktrades is unable to provide the needed security and stability?
It will be rolled back, anytime anything doesn't work it can be rolled back, forked out or a fix will be made as soon as the issue is discovered.
And when has any HF that produced horrible unexpected consequences been rolled back? Not in the two years I've been here, IIRC. Without intentional preparation to do exactly that if things turn out poorly, I don't expect such a rollback to occur.
Steemit and other substantial stakeholders mined Steem prior to Steemit being public. They remain the holders of the vast majority of Steem today. Busy, Partiko, eSteem, and other front ends did not participate in the ninjamine, and therefore do not have that 'free' stake to invest, as does Steemit.
Will rewards drop to 0 again immediately after the hard fork? If so, how long is it expected to take to get back to equilibrium? Any other sorts of quirks expected during the transition period?
I hope the top witnesses remember the lessons about code audits, testing, and contingency plans from HF20. We are counting on them to maintain stability for this blockchain.
This will be a good time for the rest of us to compare our witness votes against results.
That should not happen, but I will triple check that and reply back here if I'm wrong.
@steemitblog,
Yeah I think this graphical description of upcoming changes probably work well!
But I still doubt how that Downvote mana thing works, coz this can leads to more issues and people might rage quit by whales who misuse this power!
So I call drama for that content!
!dramatoken
Cheers~
Your chart is very broken. About a third of rewards go to bidbots. A lot of circle jerks and self votes are being cast too. An honest chart would represent those rewards flows. About ~10% of rewards goes to creators.
We should be able to downvote content anonymously, is it technically possible to hide/mask these transactions on blockchain?
That creates chaos friend. What if you are targeted by a whale and you never knew who downvoting you !? At least now you can raise a issue if some one constantly downvoting as we get to know who doing this.
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I don't agree with this robbing Peter to pay Paul method of "long term funding". It puts one faction of the community against another similar to what we see in typical bureaucracies. In essence for the blogger it's going to be perceived as an immoral tax.
A better way to fund something like this would be to provide a real useful promotion mechanism where bloggers can pay for visibility and use that to fund SteemDAO. In essence instead of BidBots why not use on-chain marketing to fund something like this?
This way actual activity and usage correlates with long term funding. Otherwise you're not likely to get anything which increases activity if the SteemDAO is funded no matter what by default. Also just like with political regimes once you start paying people in this way it's going to become increasingly more and more difficult to remove (lower the tax) in the future.
Once the SPS is in production you can propose whatever changes you like to the Steem stakeholders who can then fund the development of those features. Until then, we have to use our judgement, and the communications we have with the Witnesses, to guide the code we develop. If you don't feel we are making the right decisions, then that's a perfectly good reason to support the SPS. Until there is a decentralized mechanism for funding Steem blockchain development, you're stuck with us :)
That’s a good point even though we have to move forward. We come to the decision where we need to fund this blockchain through SPS. It is a start.
Keep on postin
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~90% of rewards going to 35 whales out of tens of thousands of accounts is not decentralized.
Well put and I agree!
I just want better alignment of incentives. Who came up with the incentive mechanics/mechanism design here? What are we trying to accomplish with the rewards (and punishments)?
Of course we need more code, but code should be generated to make a profit for everyone combined. What exactly will SPS produce which is so important that it needs 10% of the reward pool indefinitely? Is it going to produce a lot of profit and raise the price of Steem for everyone so that it's measurably beneficial or is it just moving numbers and percentages around to benefit a few who want development contracts?
It was copied from Bitshares where I'm told there is a track record of it working reasonably well.
The issue is no one knows what it will produce. The community will be able to submit these proposals. So its the communities projects we would be funding which people will need to see what value they feel it will bring to the chain.
You're ignoring his point. The funding for the SPS proposals is coming only from content creators, who currently share ~10% of rewards now. ~90% of the benefits of any SPS proposals are then delivered to non-creators - who didn't pay anything to fund them under this proposal.
That's his point. The funding is extracted from content creators whose median payout is .01 SBD now, and a 10% tax on creators is going to reduce that, leaving even less incentive to create content.
Oops. I think the SP of the majority of stake doesn't agree with you on this. Those 35 whales seem to prefer code that profits them instead of everyone. That's why this is the code being proposed by their chosen witnesses. When you look at things from the perspective of the history of Steem, that's clearly been the impetus behind extant code. Looking forward, it's reasonable to predict that's what this code is intended to do.
Less rewards for creators, and more rewards for whales. It's that simple.
I can think of one reason to implement a regressive tax on the ~10% of rewards not currently extracted by substantial stakeholders. Only one, and it isn't to fairly distribute the expense of funding development to those that will benefit from it. Whales currently extract ~90% of rewards, despite creating almost none of the content those rewards are supposed to encourage creating. This tax will be extracting yet more rewards from creators and enabling whales to vote to fund SPS proposals that will provide kickbacks, just like governments do today across the world.
That's the only reason for this particular funding mechanism I can grasp.