Steem Works: A Funding Mechanism for a Worker Proposal System
So, I have to say it... Jerry is onto something with the Worker Proposal system. I think it's proven to be pretty effective in a number of cases and coins to decentralize the work necessary to grow various blockchains and their networks. I think Steem could benefit from having one.
If you're unfamiliar with a worker proposal system it's essentially a fund that is segregated by the block. People can submit projects to the fund and be paid for working on behalf of the Steemit community.
I'm not an expert on worker proposal systems themselves so I don't want to dive into exactly how the worker proposal side of things should work, but @timcliff and I have been poking around in the block this week and we think we have a way to pay for this. Personally, I want to simultaneously unwind one of my least favorite aspects of the Steem blockchain as it stands today, distribution, while enabling a block empowering worker system that should lift up the whole platform.
As we say in New England "a rising tide lifts all ships." We're at $2, and if we did nothing except for hang in in for the ride that btc is on we'd be at $6. This platform is amazing and undervalued, and I think we have to do a little more to get investor attention. I think this could be it.
Distribution now
93% of the Steem sits in less than 1% of the accounts. That's not good for us. In fact I think it hurts us and our credibility as a network substantially. Three things contributed to this more than anything else. Initial distribution of Steem. Mining of Steem. Stake weighted inflation of Steem.
Not only did some accounts get early access to large amounts of steem, followed by some of the earliest accounts having access to mining which has added up to at least 10 Million Steem to a handful of accounts, but then arguably worse than all of that we had Stake Weighted Inflation set at a ridiculous percent. So, all that early access Steem grew at least 2X and possibly larger simply because we had an absurd inflation on the platform. Instead of it being dolled out in post rewards to active users it went to the people who ALREADY had the most Steem on the platform. Essentially the Steem holders grew their stake by a massive margin and it drove the price down to seven cents.
We can do better
We have an incredible network. We often have the most transactions out of any block. We hold the record for most transactions. We are the fastest block going. We have free transactions. We have 30k active daily users and growing. We have a ton going for us, but we're undervalued relative to other chains and their block activity by about 100X maybe even 1000X (check out http://blocktivity.info/ for where I'm pulling that number out of). I think we're still crawling our way out of stake weighted inflation shoving the price down to seven cents.
Stake weighted inflation was toned way down, but it still exists. It's hard coded into the block that 15% of the newly minted Steem that hits the platform from inflation goes to stake holders. As of yesterday you can see that the effective stake weighted inflation rate is at 7% of all the steem rewards that come through platform inflation. This number changes due to a number of factors, but it fights to get to 15%.
How much is that?
For ease of Math the platform has 260M tokens outstanding. It has a 10% inflation. 26M tokens will be produced in the next 12 months. Of those tokens 7-15% of them will go to the less than 1% of all accounts that have the most stake already. This is roughly 1.8M Steem on the low end 4.5M Steem on the high end. This is worth $4-9M USD over the next 12 months (without any additional changes to the price of Steem).
Which sounds more likely to skyrocket Steem?
Whales have roughly 6M more Steem.
Steem as a community has a strong worker proposal system funded with 6M +/- 3M USD enabling thousands of projects to get off the ground.
Yes, whales will get slightly less Steem, but I think the value of every individual Steem they already have will be worth loads more.
I'm pro-investor
Please don't take this the wrong way. I'm not anti-whale. I think our investors should be rewarded heavily. I want investors to be rewarded on the platform. I'm glad they earn a healthy amount by posting, curating, delegating, and bidboting without the extra lovekick through stake weighted inflation to merit an investment here.
I also think if there's a vibrant community working specifically on the Steem blockchain and all its possible needs we'll rise up much faster than what we're currently doing. In short I think this will provide a better investment opportunity to investors who are looking to maximize Steem value.
tl:dr
Rather than grant steem on stake weighted inflation lets send it into a worker proposal system.
If you're a whale please ask yourself which is going to earn you more money. Even more Steem sitting in the largest accounts or a worker system designed to improve projects in a decentralized way, to spread the gospel of the blockchain, make product improvements, help bring in investors, build applications, and a ton of small projects that people do with $3-7.5M meant to grow this platform.
Should be fun and I hope many of the whales on the platform vocally support a plan like this.
What do you think?
This post was authored on mspsteem.com. It's a clone of steemit.com, but it is managed by @netuoso and has a 5% beneficiary to @minnowsupport to help the newest members of this community get off to a good start.
I would avoid changing monetary policy...if an investor was told he would get a certain % a year ...you can't then just turn around and tell him "sorry we changed our mind you won't get anything". it's basically fraud and theft. then good luck finding another fool to invest in Steem again.
Holding Steem Power only pays around 1% a year....it's very reasonable considering there's a 10% inflation (most of which goes to Authors! 69%!!).
if you have a problem with the initial distribution of Steem, then you should ask those who ninja mined Steem (mostly Steemit Inc) to pay for the work proposal system, voluntarily. Instead you are basically proposing to rob every Steem Power holder of their 1% yearly interest, even those who actually paid for their Steem Power.
What he fails to mention about the 93% statistic is that it’s mostly owned by STINC (but we can’t be sure about this number because it’s not mentioned how he got it).
Mostly, what we see from his complaints/proposals is that he has some kind of problem with large invested users. Lost in his ire for them is the fact that some of them in the “top 1%” have actually bought their stake. They and others who mined STEEM in the beginning and did not dump all of their holdings on the market are the ones largely responsible for the fact that authors and devs are able to earn a lot of money by toying around on/with an immature/clunky/unappealing social media website and a blockchain that hasn’t really been welcomed by the larger crypto community.
Anyway - you’re right. Continually screwing investors (and particularly, appealing to the “redistributionist” mentality) is a great way to lose investor interest, which is already relatively low.
Please don't put words in my mouth ats. Sometimes I find you very difficult to interact with. If you could try to be less abrasive in the future that would be swell.
The 93% statistic was hosted on steemwhales.com, which hasn't been updated all that recently. So, the number is approximately 1-2 months old. The 93% was actually excluding Steemit's share, and makes the distribution worse. Similarly the distribution is made worse because many whales have alt accounts and some with a lot of steem and that wouldn't be captured by the distribution number I mentioned. So, best case scenario is 25ish people own 93% stake, but it's likely worse than that and by quite a large margain.
The proposal is to stop putting a stupid amount of inflation back into Steemit INC or any other mega whale. I don't think it's helping to grow the platform. We need new investors and new users more than I need Steemit INC to centrally hold another 5M steem. So, we can either reduce inflation, keep inflation the same and reroute to the other distribution paths, or reroute it a worker proposal system.
After some thoughtful discussion @timcliff and I thought it would be best in a worker fund because centralized funding for decentralized projects to help the ecosystem will help Steem take off and get out of our $1-2 rut. This empowers lots of people to do small tasks that help the ecosystem and that's what we need.
I'm also not saying we should redistribute their steem. You're the one calling for them to burn however much of it. I'm simply stating it's time to stop giving them more for a passive stake. This isn't a communist revolution post where we kill the Steemit Devs and take their Steem. It's a post to say "Hey, I think we can do better than giving up to 15% of our inflation back to the largest accounts." Let's give it to smaller accounts who do work on behalf of the network.
What I actually think hurts Steem as a community is high profile people running around calling Steemit Inc Stinc, and generally tarnishing an already hurt brand. I think it's better to tweak the economics of this place to favor sustainable growth and try to get to work building it with a funding source that wouldn't cost the platform money so much as reroute from steemit inc to the rest of the platform to use. I also think it needs some cheerleading to say "Hey, other than the distribution this place is pretty amazing." So, I've been doing that too.
Lastly, I'm not anti-investor, but I am anti-dumb investment. That inflation is basically imperceptible to everyone except Steemit, and I think we'd be better off putting our money in a decentralized place to grow. At the very least we should stop funneling more money back to Steemit.
Just when and if you respond please try to be respectful of me personally, this ecosystem, and the people working their ass off at Steemit.
I agree with you and I'm a whale. You got to be really shortsighted to not see the value in using some of the inflation to fund developement.
The claim that re-allocating this money will hurt investors is again very narrow minded.
Funding is key, it's what make or break a project. A funding mechanism would add incredible value to the steem blockchain. Besides, most crypto don't pay 'dividends' at all so steem would still rewards its investors far greater than other cryptos via curation rewards.
Your idea was discussed way back then already https://steemit.com/steemit/@trafalgar/a-problem-in-the-economics-of-steemit
@peaceandlove Are you an early investor in Steemit? I am really interested in increasing my Steem Power, but I find that solely by posting content alone, it is really hard to do so. Would you suggest us investing our own cash by purchasing STEEM to increase our SP?
This already exists. Anyone can propose any project and receive funding from the voting consensus of every other invested user. This has been done since the blockchain began. Why do we need to create it again?
If we don’t like the inflation for holding SP or its results, then get rid of it. There’s no need to add more complexity to the system by creating another separate allocation/consensus mechanism. Steem is already complex and complicated enough as it is.
Because a solid project usually needs a lot more than a couple hundred bucks.
Are there any “solid projects” that exist on Steem today?
I agree with you regards friend if you can visit my blog and vote I would appreciate it
Big Thumbs Up to that.
Money is the least important when it comes to making a good project, you need more head than money.
I have to agree with you @peaceandlove ... No one is going to give away or burn their own money - but you have to spend money to make money. Investors and Steemit alike must now leverage their liquidity to benefit the overall Steem economy and this is critical. If you could spend 10-20% of your steem and impact the steem price by 100%+ you definitely should do that!
20-30 extremely wealthy busy people probably are not the right people to be distributing this liquidity so I think increasing Worker proposal funding warrants a good examination.
Right now I think @steemit INC and all of the whales and investors of this platform are in mortal peril! The threat I perceive is this : If someone was to clone the Steem blockchain and sharedrop to every Steem user their regular holdings, except morph the Steemit/whale accounts into worker proposal accounts Steemit could lose alot of its DEV/Content/Author community. Then the Community fund could continue to grow and spend only its interest on worker proposals.
Its important to note that our chain has the least buying pressure from mining cartels and this might be a significant factor in our exposure. Of course if giant mining cartels cant get in they're going to resort to FUD.
@ats-david Im not sure if you're trolling or what - The possibility that the overall steem economy could get a boost or a ROI from steem inflation is real.
We already have inflation. The worker proposal system is completely unnecessary, however. How would it work? People submit proposals, then a group of people vote based on how they want the pool allocated, then at the end of the voting period, the money is distributed?
We already have this system. It's called "blogging."
This kind of proposal system is needed on blockchains like Dash or SmartCash because they're proof-of-work blockchains without the kind of stake-weighted voting that we have here on Steem/Steemit to allocate/distribute rewards. It serves no real function here on Steem that doesn't already exist. If you want to fund worker proposals, all you need to do is create a group/community where you can share your ideas and vote on them.
In fact, this has already been happening since the Steem blockchain was launched. Worthwhile projects are already being funded via blog post rewards from announcements and updates, and even donations from various users. The only thing a worker proposal system would accomplish is reserving dedicated funds for projects...which would just add another rewards pool to the ones that already exist. It just adds complexity and complications to an already complex and complicated system - and would likely just lead to another avenue of abuse and waste, like funneling money into worthless Facebook advertisements to bought/fake followers of certain "influencers" around here.
As I said in another comment - if there is a serious concern about inflation going to whale accounts, then propose reducing or eliminating the inflation. That would have a bigger impact than creating a redundant pool and system for allocating/distributing funds.
And no...this isn't "trolling." I don't think that word means what you think it means.
Steemit Inc's burning 50% of their Steem Power would really be the solution. Or at least they could place that amount in the "Project fund" .
The problem is not genuine investors who bought Steem getting 1% interest, but Steemit Inc getting the lion share of that 1% as they own most of the Steem Power.
To be fair genuine Steem Power investors/holders should be getting an even higher % than just 1%. Total inflation is 10% (with 7% going to Authors) that means that Holding Investors are actually losing 9% in stake currently (unless curating,blogging etc)....and by removing that 1% they 'd be losing -10%.
Infact the idea of Bonds by @stephenkendal for rewarding long term holders with even higher interest rates would be fantastic to attract investment. but it will always be frowned upon till the vast majority of the Steem Power is in the hands of the few people who ninjamined Steem (so again burning half of that would be important).
Bottomline: real big investors are not interested nor have time to buy Steem to become curators (and curation rewards are crap anyway), but would invest if holding was profitable.
And for holding to be profitable I think they need to be offered a rate that somehow mitigates the 10% inflation.
Btw I also got the impression from your other thread about SBD that you are "anti-investor"...as you oppose a stable peg for the SBD which would actually bring a lot of value to Steem. Also in this thread you go straight for the 1% interest of Steem Holders....without even considering lowering that 69% for authors...which then goes straight to exchanges putting selling pressure on Steem.
Provocation: maybe we should take 10% from all the top trending post to fund those Projects. or do you think this post is really worth 500+$? ;P
We really need to be mindful that without investors this place won't last long, so just an author centric approach won't work.
So far investors have only been wasting their bitcoins for some mild entertainment.
Maybe there needs to be a Steem roundtable to focus on the economic model, I don't think it was well thought through and it doesn't seem to be working. Steem is an experiment....so the community and investors may accept yet another change...but after 2 years it is really time to have formalized and finalized an economic model that works for everyone : investors (aka holders), authors, curators and developers. The balance between all 4 is vital.
There's a lot of talk about "investors", but who are these people and why do they invest? Do they just hope they'll make a profit from cryptos going up in general?
I think the goal should be to draw advertisers, who might pay to promote their posts to the trending page, or buy the requisite SP. That way we get fiat money invested in steemit. But advertisers won't do that if most of the money is held by very few people. Internet ads, or posts, aren't made for a couple individuals.
So the best way to draw "investors", I think, is to draw people who, for one reason or another, want to spend their fiat money to get steem. And that's more likely to happen if wealth here is more equally distributed.
I think advertising is what steemit is trying to avoid in the first place. We start allowing advertisers to push their posts up the rank and the platform goes to shit like the rest of the social media world.
What's the reason for the "promote" button then?
Good question. I would assume for new users to get their articles they worked so hard on seen by a larger audience. I’m sure it wasn’t intended for spammy marketing or giant corporations to push their products into this space. I may be wrong.
@aggroed all for one is a great concept individualism. Isn't all that bad but better if we can distribute wealth to many
yeah I noticed that when I saw the other post he wrote "a defense of a high SBD." .
With a stable SBD we could have a vibrant market place which could bring a lot of value to Steem, but no....seems like some big voices in the community are only aiming for pumps and dumps, that's why they are so focused on gimmicky marketing and not substance.
The few investors that do get involved are then treated as cash cows to feed self entitled wannabe bloggers who just cash out. Some leeching SJWs even go around telling Investors that they can't upload their own posts. Madness.
Investor patience must be really wearing thin. Steemit is an experiment so some chaos was to be expected, and I'm still optimistic but it's time to clarify to the Investors what's in it for them.
Btw I've seen your suggestion in the other thread about burning 50% of the Steemit Inc ninja-mine...now that would seriously help the price!!! Several other blockchain companies did it.
Ripple did it then shoot up the price from .20 to 80+
I agree with @ats-david distribution of stake to the projects or marketing to help create awareness of steem blockchain outside of steemit.
As I always shout on top of my lungs, we need more investors to hold their steem, media to promote how fast steem process block transactions (3 seconds) and best of all it's FREE.
We are growing, very slowly but growing. Though in cryptocurrency, it seems we don't exist despite we're in the Top40.
Hold your steem!
Cheers,
@yehey
@ats-david and @lavater I'm very grateful for explaining what may be the cost of fighting Steemit's "inequality" by some kind of communist "nationalization" of steem power. A lot of small Steemians needed this explanation, myself included.
But @aggroed has stated that he is actually "pro-investors", and said: "whales will get slightly less Steem, but I think the value of every individual Steem they already have will be worth loads more". Can you possibly comment on that line of reasoning? Maybe instead of stealing whales property, Steemit community can develop some kind of serious business ideas for them? Is it impossible or wrong for some reasons?
Sure. It’s not exactly “pro-investor” to continually advocate protocol changes that would negatively impact investors or to continually blame “the 1%” for “minnows not making enough money.”
This is a proof-of-stake blockchain that allocates rewards based on stake-weighted voting. If you’re not happy with your individual results, there’s a way to improve them. Disincentivizing investment and appealing to non-investors isn’t how you get more investment and it doesn’t make you “pro-investor.”
I agree with you 100%, especially as a minnow trying to have my content rewarded.
who is STINC
People were saying exactly the same thing before HF16. Thank god that argument didn't convince anyone else we would still have 100% yearly inflation.
fair point. but we'll have to finalize the economic model at some point.
I can't see big investments getting involved into a platform that keeps changing its reward rules as it goes along.
White Paper was scrapped. Now we have the Blue Paper...and that will be scrapped too. Next will be Toilette Paper as it might last even less. At some point the basic rules need to be set in Stone.
People need to know what they are investing in...and at the moment it is a giant mess.
amazing
I believe in steem too
I think it could be revolutionary.
Hell yes and this should also use @mughat idea for Proof of Profits and rewarding profitable accounts
https://steemit.com/cryptocurrency/@mughat/proof-of-profits-based-bandwith-allocation
amazing @ackza
Good find. I've had similar ideas. My primary concern is that we should not limit the use of STEEM as a currency, but post spam could be greatly limited this way.
Very interesting proposal. This will be helpful to many new investors.
It's simple physics.....top-heavy structures will always topple.
Your post is really well written and I think you're right about this proposal being a better method for increasing the STEEM price than the current interest system. I personally would like to see it implemented but I would be worried that it might upset some people who perhaps invested on the basis of the interest payments.
It's great to encourage whales to invest in this. What about dolphins, or even minnows?
you are 100% right, whales love those projects, Jerry is already famous in Steemit and a well known hard working person, so this is a project that will be realized very soon.
hi nice comment I like that.
Yes, NIce information about steemit blockchain. Steemit is growing social meadia platform. this information is useful for all semian.
Dare I say "SMTs"? Not to derail the entire idea, but it might be implementable at some point.
Thank you @aggroed I do love your proposal and would also like to assist with this in any way posible. Pleas let me know what I can do to assist? I am a dev and would spent time to work on this proposal for free since I do belief it will inprove the overall system.
I'll keep that in mind for this initiative.
If you're a whale please ask yourself which is going to earn you more money. Even more Steem sitting in the largest accounts or a worker system designed to improve projects in a decentralized way, to spread the gospel of the blockchain, make product improvements, help bring in investors, build applications, and a ton of small projects that people do with $3-7.5M meant to grow this platform.
Nicely said :)
Yup. This has been working very nicely for projects such as smartcash, who use the community voted hives/projects to do interesting things on a social level such as distributing food in Venezuela. I think it would be a fantastic system on Steem. People could fund their projects and then write them up in the form of a report.
This was a very good post. Informative and insightful.