IMPROVING Steemit's REWARDS Structure - Creation of the REWARDS POOL
Synopsis:
There are more DEAD than LIVE fishes in Steemit due to the skewed rewards and incentives structure which fosters “the rich becomes richer and the poor, poorer” mindset. The current incentive system should be enhanced to nurture Red Fish and Minnows which constitute the large majority of Steemitverse. Steemit's bright future depends on ensuring a sustainable ecosystem that promotes equality, fairness, oneness, and non-violence.
The Problem:
There are more DEAD than LIVE fishes in Steemit. If this trend continuous, the pond will be full of rotten fishes that could poison the whole ecosystem.
Source:@arcange 5.22.2017 steemit post. Couldn't get an updated chart as the site has been down for an extended period of time.
The Root Cause:
The current structure of rewards and incentives is not designed to nurture new Steemians (Red Fish and Minnows [RFM]) to grow and fend for themselves. Both the authorship and curation rewards heavily disfavor RFMs and the lion share of rewards goes to <5% of Steemians – a stark replica of the world we currently live in – the world-state that the Satoshi revolution wants to change.
- The wealthiest 1 percent of the world's population now owns more than half of the world's wealth, according to Credit Suisse report.
- The total wealth in the world grew by 6 percent over the past 12 months to $280 trillion, marking the fastest wealth creation since 2012, according to the report.
- But that wealth around the world is increasingly concentrated among those at the top. The top 1 percent now owns 50.1 percent of the world's wealth, up from 45.5 percent in 2001.
In Steemit, there are basically three ways to “monetize” your "contribution" to the ecosystem: (1) price appreciation of the Steem and SBD tokens; (2) authorship & curation rewards; and (3) incentives in the form of prizes, lottery, gifts etc.
Price appreciation is probably the biggest “profit” that one can make here in Steemit long term. Imagine how much wealth you gain by holding 100,000 Steem when its price skyrockets to $100 from $5 per coin. That’s a staggering $9.5 million! Compare that to a minnow who holds 1,000 SP.
Authorship and curation are what we get from our posts, the calculation of which I believe is outdated Is the Current REWARDS DISTRIBUTION Calculation OUTDATED?. Point aside, I think we can further improve the reward structure to support the growth of RFMs and equally important - to attract more fishes into Steemit.
The table below shows how skewed the rewards and incentives structure is:
Here on Steemit, SP and Followers mean everything while the quality of post means very little. Red fishes and Minnows who barely have Steem Power and followers get a minuscule portion of the rewards: low returns from price appreciation due to low steem power, almost zero authorship and curation rewards due to low visibility of their posts and small followers as well as very little steem or SDB to participate in bidding using bots. Incentives, on the other hand, is different. Its very nature, being "participation based", offers a less biased form of payment but the payout is extremely small.
The Recommendation (Solution)
Before diving into the proposed solutions, let's review the existing rewards landscape using the below visual:
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In the opposite sides of the above diagram are the inverse triangle representing the number of steemians in each category and a regular triangle representing the rewards each category receive. We all know that Red Fish and Minnows make up the bigger percentage of all Steemians hence the inverse triangle. In terms of rewards however, RFMs get a smaller share as discussed above.
In between these triangles are the DRIVERS. These are the factors that drive who and how much rewards a Steemian gets. SP and the number of followers are the main drivers - the more you have, the more you get. These drivers, however, do not work for RFMs because they barely have any. Hence, we need to create more drivers that would support RFMs. I call this the "battleground".
The Battleground
The battlefront is the area designated by the dotted red line in the above diagram. Currently, there isn't a lot in there. There are bots like Minnowhelper and the likes, but these are not enough. Hence, in my own personal view, there is where Steemit should focus its effort ASAP.
Solution #1: The Reward Pool.
The concept of this reward pool stems from the fact that Steemit exists and thrive because of the collective actions of each and every fish within it. Just like the ocean is comprised of quadrillion drops of water, every drop constitutes the whole, Steemit is no different.
The proposal is to take 10% of all rewards, pool it together and distribute it evenly on a weekly or monthly basis to all Steemians who were active on that week/month. What this means is that the rewards distribution percentages will be revised as follows: 70% Authorship; 20% Curation; and 10% Pool.
The “pool” should be distributed by simply dividing the “pooled amount” by the total number of Steemians who made a post and/or commented on a post for that week/month. It is important to note that Steem Power, number of followers, the number of posts or comments one made should NOT INFLUENCE the pool distribution. It a reward pool created by all Steemians who contributed to Steemit regardless of who they are.
There are several advantages of having this pool. First, it helps unite the whole community and make them feel like one big family who cares for each other. Second, it’s the epitome of the "equality" concept. It also serves as a constant reminder that we are all the same – minnows, red fish, whale, - all are fishes who need the ocean to survive. Third, this will provide new and would be RFMs a steady source of SP and serves as a stimulus to keep swimming!
The bottom line is, Steemit will become the leading social platform (and consequently the price of Steem will skyrocket) not because of the number of whales in the platform but because all the fishes within the ecosystem are healthy and are working harmoniously towards a common goal.
For this reason, I personally think that the reward pool should increase over time and becomes the major source of income for all fishes...but let's table this topic for now.
Solution #2: More Incentives
What I foresee to be a healthy, blooming and flourishing platform is one whose rewards structure is powered by three (not two) factors:
SP + FOLLOWERS + QUALITY = BALANCED REWARDS
The Quality part isn't there where it supposed to be. This is where this second proposal comes into play - we need more incentive types rewards.
Steemit should introduce more incentives like the Pulitzer Prize, Most Influential Steemian of the month, Intellectual awards etc. to recognize and award high-quality posts.
Let me conclude this post with the following quote from Isaac Singer:
source: izquotes.com
May the force be with us all.
I just made a comment today that if Zuckerburg were to look at the Steemit platform he'd see it's number one vulnerability as the inability to recognize that all contributions should have value, and for someone who built his empire on that that will be what he will use if he decides he feels threatened by the Steemit platform, he would build a platform based on everyone's contribution has value regardless of intellect thereby crushing Steemit into the abyss. That's a huge vulnerability to have.
HI I 100% agree with the article and if they can make steemit reward more fair for everyone that would be great.. and your reply to the article is spot on.. thanks for sharing
couldn't explain it better than you did @sunlit7.
Great idea for the seperate reward pool!
I also agree with you on the quality of posts being rewarded unequally. One suggestion i would like to make it to arrange the trending page by some other order than highest payouts. Maybe comments or page views? Something that is more engaging than a simple high paying upvote.
We used to have an ACTIVE tab which listed in order of comments.
Any idea what happened to it or why it was taken down?
Nope. Just gone one day.
We're still in beta. It might come back :)
I agree with you. It would be good to pay for the articles for the level of quality. Each time, the user himself determines how much to give a certain article. That is, to exclude the possibility of poor-quality articles in the trend to give a big payment. Then it will be more fair and creative original posts will start to read more people and give worthy payment. While this is utopia for Steemit. Rich fish will command a parade, and small fish and creative swim, as they can, without support.
I am seeing so much talent going to waste when there is so much untalented posts raking it in. It's baffling. This is why I've heard the good ones drop off keeping all the lower quality content in control. This happened to eBay. All the top sellers with amazing original products to sell got wiped out with all the cheap Chinese knockoffs. We need to encourage and support quality, rather than mass quantity. Time will tell if the platform is worth our personal times.
Unfortunately, it is difficult to change this situation. To write an original article or make a quality product, you need to spend a lot of time for this. Hence, people who want to make money from it quickly will not earn it quickly. Chinese counterfeits for these people are very convenient - you can quickly make a lot of low-quality goods and quickly make money on it. This situation is also in Steemit. Quickly wrote a low-quality article, showed photos, invested money, raised the article in a trend - and got a financial profit. I do not think that something will change in Steemit for small fish and creative people.
Unfortunately, today, what I saw in Steemit, users of Steemit with a small voice power is very difficult to climb up. You can write a quality post, but this post is difficult to notice in Steemitt. They vote mainly for the post that is in the trend because of the invested money. It is not profitable for rich users to notice the post of small fish.
Yes, however luckily this problem can be solved...
There are plenty of options , as long as the community stays involved the problems can be resolved...
I am also a huge fan of the Universal Basic Income implementation for Steem based rewards system.
Completely, unfortunately, the problem does not solve. Not everyone will want to search and read original articles - they will not be able to make money quickly. When an article is in a trend, the quality is often low - many users vote, because there is a large $. To change something, you need to change Steemit work system. That for all the laws were the same. But it is still impossible.
Steemit is still an infant,so it will probably change a lot in the near future.This is definitely one of the biggest vulnerabilities of the platform.We break up with Facebook,because of the censorship,just to find out the same exist here in the form of powerful whales.We gave up our Youtube account,because the company either demonetize our videos ( and keep the profit),or takes a huge chunk of it.Then we find out the same exist on Steemit as well,just as this post described.That means the original purpose of this platform is already lost and a lot of people won't see any difference of being here.Great post,thank you for taking your time doing the research!
I hadn't realized the wide gap between a red fish and the other elite fishes. Yes, minnows are considered elite from a red fish perspective because it will take some time to get to even that status.
I concur that the current structure of rewards and incentives are not designed to support the newcomers to Steemit. There are talented writers and artists that simply go unnoticed because they don't have the right "connections". Some break out and are fortunate to have their talent discovered, but many of these individuals are the ones that are most active on here. They are able to dedicate more than a few hours on Steemit. Building relationships and connections is a wonderful thing to do on here, but some people are just not extroverts. They love to write or draw or express their talents, but may not have the "social" skills to make the necessary connections to succeed. Or they could be working professionals that don't have time to steemit 24/7, but would like to share their knowledge and interest when they do come online.
There has to be a reward structure in place that rewards active users for them to continue writing and putting out their best works and interests. We need to entice intellectual individuals on this platform. Or else, would they bother to spend hours writing a post when they would only get rewarded $0.05?
Make sense and thanks for the feedback @beeyou. I've seen many high quality posts that did not get even a dollar payout. I can't pull the posts statistics but my guess is, there are more high quality posts that weren't paid fairly than quality posts that received a decent pay out. Hence the 10% reward pool to me would make sense.
The other thing that still strikes me as probably outdated is self-upvoting. I'm sure there were good reasons when steemit was still in its early phase, but now more and more people enter and participate it's at minimum a bit strange that whales can divert quite a bit of payout to their own work. It's a bit like as if people fear that if they cannot upvote themselves it's not really worth the trouble. I would think it's quite the opposite: most whales seem to know eachother and ending self upvoting will probably lead to higher rewards if you post good work. Anyway, my one cent, because that's what my opinion is worth today on steemit ;)... Upvoted and resteemed!
appreciate your one cent, upvote and resteem #ronnie60. there are pros and cons on the self voting and I guess overall this is good for the community since majority of steemians need it. I am more concerned about the downvote than the self vote though as it does not promote harmony and unity. There's wisdom behind why facebook does not allow "dislike" but it's just my own opinion.
Only through bringing up thoughts we can have (a bit of) influence. I understand your doubts about downvotes. It's complicated I guess. But I don't agree that self upvoting is important to whales. Seriously how much more do you need when you're already in the top :-) ... Still thanks for your article though because only through thought and imagination can things be made better!
I know I can write some good stuff, but only when inspiration hits. That's not often enough to rise on steemit. So steemit basically tells me to engage bots and post crappy atricles. That's not encouraging for me. I like your focus on participation and quality. These are things that work.
Earning money is not easy. Most people come here because they think that and give up quickly. That explains the dead fish. That's why I don't mind.
Of course, there are a lot of users with lots of Steempower, raping the rewardpool with their senseless upvotes and shitty posts, but the world isn't quite fair.
You have three choices: Be good, get good or give up. But without hard work, big effort and persistence, success on SteemIt will not come.
I agree.
What about ordering a statestician, scientist, economist or similiar to create a system that they can prove is going to distribute the rewards fairly. They probably have a lot of relevant experience.
Fairly is a subjective term. It's easier to see value in what I create than what someone else creates. Human nature I believe.
I didn't say fairness is an objective term.
but you mentioned scientist. Scientist is normally hard-evidence and about objective truth. Then you mention distributing the reward fairly. Kinda infers that.
great post