The Calm Inflation Proposal & The Additional Advertisement Proposal
We are going to calm the storm and make the steemit economy balanced, functional and profitable. Here are my proposals:
The Calm Inflation Proposal
- Curation and Author-Rewards: Unchanged (6.5%)
- SteemPower Holding period to minimum 12 weeks (1/4th of a year)
- SteemPower annual interest: 5 %
- Mining-Reward: 0.125 SP/Block (Currently 1 SP/Block)
- Witness-Reward: 0.125 SP/Block (Currently 1SP/Block)
Please think (Selah) about these numbers before you comment on them quickly. We will have an open debate about inflation-rates on @steemspeak radio when @ned is back from South Africa. TBA.
The Additional Advertisement Proposal
Integrate advertisement on content-level in a 50/50 revenue-split between the content-creators/authors and the Platform (IE: SP Holders). We can start by implementing Adsense while we work on our own STEEMsense
This will become a continuous reward for bloggers based on real views and clicks forever and ever and as the platform grows in users and views will become a big money-maker for everyone and benefit everyone.
This will also create blogger-incentive to do his/her own proper advertisement to have more audience reading his/her posts and give a much greater return to SteemPower holders/investors then hyper-inflation will ever do.
"You all gonna get RICH BOYS, You all gonna get RICH!"
MY WITNESS is: @fyrst-witness and this is HOW TO VOTE FOR IT
copy this text: fyrst-witness and paste it at the bottom of this page and click vote
Thanks @fyrstikken
This link should be the bulk of the convo with @ned for those who missed it:
https://www.dropbox.com/sh/8eb095b8idut4so/AACR_Bjv3O99GKmpGy7ZLuSma?dl=0&preview=rec_20161030-050059.mp3
Interesting times...
Thank you for providing the link to the mp3 from our spontaneous talk earlier tonight @majes :)
Most welcome, thanks for the up-vote :)
The 5% is not interest, it is inflation so there is no actual financial benefit from this. Which is why I think that if we are going to reduce the inflation to such low levels then it's best to remove everything so that people's steem power balance represent the exact VESTs/share that they have and that steem is inflated the least possible. ( attractive to traders)
I very much agree with the general idea of your proposal though.
I think it is healthy and good to look into changing things like this, although we do have to be careful not to "throw the baby out with the bathwater" just because we are panicking that the price is going down.
One thing that I think a lot of people loose track of because we have been on a steady decline since the "July pump" is that the value of a vest is actually higher today than it was just before the pump. If you look at what happened as a temporary artificially/overly inflated hype, then it paints a lot different picture.
Granted there was a huge spike (which we have fallen dramatically from), but overall the value of Steem Power is still going up.
I really like the idea of using Adsense as a temporary solution until STEEMsense can be developed. It would be a great way to close the gap between supply (which there is currently a lot of) and demand (which there is not much of) for STEEM/SBD.
One thing to point out regarding Adsense though, is that in order to qualify the website (Steemit.com) has to comply with all of Google's "rules". I had a little experience of this back when I spent some time on webanswers.com, and what you were allowed to post on that site was very limited. Steemit might be able to get around it by restricting where on the site adds showed up, but if any users accidentally posted NSFW or copyrighted material on a page where adds showed up, the whole add program could get shut down for a day until Steemit removed the content. I'm not saying this as a reason not to do it - just something we need to consider.
@timcliff other blog-platforms has made it so that the blogger paste his/her own adsense key into the system and is rewarded in accordance with the split/agreement directly from google to a bank-account (I am paid google-money every month) - so adsense should only be seen as a temporary solution, not everyone has a bank-account.
Ah, ok, cool. I am definitely in support of the idea :)
Would connecting a user's ad-sense account though let the reward be split between the author and Steemit somehow?
Yes, Steemit and Google will just have to do the formalities and implement it accordingly.
Great post at @fyrstikken. I like your inflation and advertisement proposals. I think the potential of a continuous stream of advertising rewards on posts would attract a lot more bloggers and more quality content to Steemit.
thank you @nextgen622, it is a win/win situation. Ad-Revenues is what made blogging and vlogging profitable, I see no hinder in our way that would prevent us from reaching anything but glorious new heights implementing it fairly in that 50/50 split described.
More legs to stand on :)
Curation and Author-Rewards: (5%)
SteemPower annual interest: 5 % + voting power
You can exit 100% out of SP after 6 weeks. Optional.
Mining-Reward: 1 SP/Block (Algo changed to SHA256)
Witness-Reward: 1 SP/Block (unchanged)
I think 6 weeks is a bit fast for security reasons. My original idea was 4 weeks but after discussing with @arhag I think 12 weeks is better. My view has always been that the lock-up period should be determined functionally (to satisfy the security requirements) and not to try to push people into an investment horizon they don't want. 12 weeks is probably the period that does former.
what security requirements do you refer to?
The most obvious is powering down, transferring the coins, and then powering up to a different account to vote on the same content multiple times. That is mitigated with a power down schedule longer than active post lifetimes.
I think that the new feature where they extended active post lifetimes to 30 days is not used by many people and is pretty useless. If you look at rewards past the first payout period there is almost always nothing or very little amount. People forget about old posts. Also I think this features would actually encourage cheaters to vote for themselves because they can do so without getting the attention from the post being trending or visible to many people.
If this is the only requirement then in my opinion it would be worth removing this feature or reducing the life time of the post to shorten the power down period. The shorter the time lock period the more likely people will lock their coins and participate in curating.
I really don't see the point of a long lock time period if the inflation is reduced to a minimum
Actually the 30 day limit is itself very unpopular with authors. Most would want it longer. Perhaps if the advertising revenue model is successful authors will see that as a fair way to be compensated longer term in place of reader rewards, but that is all hypothetical at this point.
The 30 day limit is bad. Harms the platform overall.
Please read my comment to this post regarding other 'issue' with 12 week to power down.
@joseph Don´t you think that 19 witnesses getting 500,000+ SteemPower each per year is too greedy in annually witness-rewards?
I am a witness, and I am willing to witness for a lot less reward then the current going rate. 1 SP/Block is too much on our fast blockchain, you must be willing to moderate yourself - we can´t have 4th of July every day :)
It's not a question of greed. There is some sort of myth that witness pay is a handout that serves only to enrich witnesses. Perhaps that has been the case in other coins but it is absolutely and utterly false in the case of Steem. Those funds are used to support extremely valuable and important development and community initiatives.
In my case I'm currently running a deficit of about $1200/week continuing to fund these initiatives above and beyond the entire $800/week I'm getting from witness power down (yes I am in the process of rationalizing the budget, but I also don't want to cut off good projects abruptly). My time is volunteered and nodes are paid for out of my own pocket. In other cases there are witnesses who have left their regular jobs and gone full time on Steem-related work, supported in part or whole (though the latter is getting harder by the week) by witness pay. These witnesses are developing and supporting services that you may very well use every single day.
Secondarily, hosting is only a small part of the core job of a top 19 witness in Steem. Witnesses also have very important responsibilities in evaluating updates and deciding whether they are in the best interests of the stakeholders, serving as stakeholder representation in offering feedback to developers on direction (in part since developing updates that won't be accepted is foolish), maintaining the SBD peg, planning for scaling of the infrastructure, and other management and leadership roles. Recently there has been discussion of adding more witness parameters aside from the SBD peg. If this occurs, then the responsibilities of witnesses in deciding on and maintaining these parameters will increase.
The Steem ecosystem benefits greatly from both the work of the witnesses and the witnesses' use of funding to support decentralized development and community initiatives. Top 19 witnesses have critical decision-making and leadership responsibilities and not only should be compensated accordingly but failing to do so increases security risks since the primary incentive for honesty and diligence on the part of witnesses is the threat of being voted out. If the pay is peanuts, getting voted out becomes a blessing, not a threat.
Cutting witness pay by 7/8 is extremely short-sighted and harmful, and also not at all needed to significantly reduce inflation. 90% of the inflation in Steem comes from the high payments to the vesting fund. Reducing the unnecessarily-punitive imbalance between Steem and SP would greatly reduce inflation without the need for other changes.
The one change I would make is to eliminate the exponential escalator that is scheduled to go into effect once rewards reach a minimum. Without the horrendous inflation, the constant rewards won't be inflated to a meaningless level quickly, and there is no need for exponential growth. Instead constant rewards like Dogecoin mining or slowly declining rewards like Bitcoin mining can be used. Either will further limit inflation going forward and prevent exponential long-term growth of the money supply while still providing economically-meaningful rewards for decades if not indefinitely.
I have not considered carefully the appropriate structure for SP in this model (5% per year is exponential and probably not compatible with subexponential rewards), but it may be that voting rights and curation rewards (perhaps enhanced) would be sufficient incentive given the short vesting period. Again, we don't need to be pushing people into an investment horizon they don't want. Eliminating incentives that serve only to try to push people to power up and be locked into a holding period without any functional reason for it would further reduce inflation. Just buying STEEM and holding it without powering it up if you don't want to should be a viable option (unlike now).
I agree with smooth that taking rewards away from witnesses is not the solution.
We need instead a way for outside money to come in, so that inflation is not the only way we pay for things.
I have issues a proposal to use bounties to do this. The ad-model is another way to do this.
Indeed @smooth, if we are going to reduce SP Interest from 100% to 5% then we must also cut the witness-rewards and mining-rewards to better reflect the new reality - Steem will go sky high, so your Dollar-amount will go up because of it. Alternatively we can keep the rewards as they are, but widen the circle of witnesses to 190 instead to make the major rewards.
These are all delicate numbers that we must carefully experiment with, and we can always adjust as we move forward.
We don´t want to become "Steembabwe" because of hyper-inflation, and we also don´t want to lose witnesses that are of top quality that benefit all of us, and I think a total reward of $1.4 Million or $75K per witness should be a sufficient annual reward for the top 19 witnesses, and I should definitely be one of them.
SP doesn't give you any interest. You actually lose money every year when powered up.
The inflation right now is much higher than 100% it's somewhere between 100% and 300%.
Yes @snowflake and it is accumulative inflation, so ... The Snowball-effect. "Steembabwe" hyperinflation.
Steem may go sky high. Most blockchain projects stumble and stagnate if not fail at some point.
Great! The current design calls for 0.75% of market cap to go to total witness and miner rewards. Your proposed budget implies a market cap of $186 million with no parameter change. That is a very reasonable, if ambitious target, from the current $25 million.
absolutely @smooth, and our current market-cap is a joke. The steemit.com website combined with the Steemit Inc. Technologies is worth a lot more. We are in an investor-accumulation period now, and we are building a bottom.
All good skyscrapers and space-ships starts from the bottom, but we must do it the right way so we don´t kill the goose that lays the golden egg.
Budget accordingly, and stay calm and keep focus on what you need to focus on, and support @fyrst-witness (dedicated sales-force). We´ll be at the moon again once we all agree that we need each other on various parts of the same team :)
I am here to serve.
Nobody wants to be Steembabwe.
This said, I'm going to advocate an approach somewhat in between what @fyrstikken (on one extreme) and @smooth / "status quo + tweaks" (on the other-- also I recognize there are some changes you want to make @smooth).
@fyrstikken, I think that your proposal is a little too fast.
@smooth, I think that larger changes are needed.
I've always, always been in favor of changing payments to reflect actual traffic. It's simply an excellent idea top to bottom. Adwords? Why not! They're everywhere else, and people could stop asking where the money comes from.
@fyrstikken, you've validated all of your plans with investors? (eg: if we made those changes, they'd want in? Are any of them willing to talk with us when you have your community meeting?)
What do you think a meatspace market value of a witness's labour/capital/skill would be? I ask because such a realistic value might give an indication of a realistic price of STEEM. So if you say $50,000 dollars a year, then the price of STEEM would tend to 10 cents. At the current rate of witness reward. Why should this be so? I am assuming that the return to witnesses is a significant part of both the STEEM economy, and of the "soul" of the Steemit platform.
@richardjuckes It cost about $48 a month to run a witness. And only the top 19 witnesses make any significant amount of SteemPower (about 500,000 a year, worth about 92.5 BTC or $64,750 at current price).
According to: PayScale
"A Software Developer earns an average salary of $68,082 per year."
Remind you that software-developers work 9-5 + overtime and their income is taxable.
according to the same site:
"The average pay for a Broker, Futures / Options is $58,524 per year."
and let´s look at:
"The average salary for a Sr. Software Engineer / Developer / Programmer is $94,083 per year."
and why not:
"The nationwide average salary for Marketing Directors is $81K annually"
and let´s add:
"Salaries for Non-Profit CEOs in the United States are generous, with average pay above six figures ($103K) per year."
and also:
"Average pay for Chief Executive Officers in the United States is more than reasonable, with annual salaries pushing past the six-figure mark ($160K). "
So even with STEEM at 13c it's still a pretty good gig. At $1 it was outrageous. If STEEM should happen to fall to 3 or 4 cents, then perhaps the current reward is reasonable, but 3 or 4 cents would hardly attract swarms of advertisers. I think your proposal -- .125SP/Block -- is still too generous. Aren't we only 3000 active users?
@richardjuckes When there is only 19 people in the entire world that gets to produce coins... Yeah - not only is it super profitable - it is - but we print more coins then anyone needs, so we better kick that habit and re-evaluate what is and what is not valuable to the Steemit platform (1) and the Steem Economy (2)
Vote for @fyrst-witness as witness and Power Up! :)
Replying to previous message here
steembabwe is the perfect term to describe the current situation.
glad to see that some people gets it.
tbh a related posts/advertising between the end of the post and the comments would give a reason for promotion and make it easier for people to find good content. If enough steem is burned this way we might not even need outside ads
I generally like your proposal. Actually like it quite a bit.
My question comment is more about the current 10% level (of market cap) before SD start getting less than 1 usd worth of Steem in conversions.
The argument is that 10% is effectively doubling the liquid steem so this level is reasonable in order to prevent black swan events. The proposed 12 week conversion will potentially add up to 1/12 or (8.33% per week, 16.66% per 2 weeks etc) of the total market cap to the liquid steem . Far more than the 'up to 10%' we currently consider black swan threat by the SD .
Other changes would (or at least should) likely increase the equilibrium level of liquid STEEM in the system. The current low level is due to the extreme preference for SP as a function of punitive STEEM inflation. If these changes are made hopefully adjusting that balance (and removing the extreme punitive preference) is part of the equation.
That would not only make 12 weeks more viable but would likely make the system more stable overall with respect to the sorts of 'black swan' events you describe. Still, crypto markets are highly volatile and don't necessarily have high consistent liquidity even when they are overall more liquid than Steem is today, so it will always be an issue to an extent.
BTW, thank you for bringing my attention to your comment as I found it interesting and relevant.
Hope the girls will get rich too. Just saying.
"Steemit is like Bitcoin but with girls" :)
STEEMsense - I'd cut out the middle man and let the top posters dictate which ads they wish to place on their posts. The advertisers could choose from the whales list who they want to back?? Great new term @fyrstikken! "ONWARDS STEEMSENSE!"
Once again, adding an advertising revenue stream is a great idea and would dramatically change the direction Steem is headed. Why would anyone power down or cash out if it starts paying to hold SP. Once we can get Steem moving up again, user numbers will start climbing again. All this powering down and cashing out is killing us.
Well, I have only powered up and invested. I think it will pay off great in the future - but we need to balance our economy, we need a visible roadmap and we need @fyrst-witness among the top 19 witnesses.
I don't think that's what the proposal says. The 5% would be the inflation created by the system so it wouldn't be a financial incentive per say.
It is amazing how hard it is for people to wrap their heads around this concept independent of what the rate happens to be, isn't it?
That's because some people have been pushing the narrative that you earn interest when powered up . It is a deceptive behaviour and blatant lie and people have been perpetuated it.
If the inflation was reduced to the lowest possible people 's balance would remain the same but they would have a more honest interpretation of the share they own and they would probably understand the system much better. One of the reason that investors dont like steem is that they dont understand it and i can tell you that 80% of the people here are very confused about how the system works, Ive read some pretty hillarious shit.
Makes sense. Resteemed, upvoted, tweeted, and witness voted. :)
I want to add that as for Google Adsense, however, I don't think that's a good idea. Some of the content on Steemit Google would never approve of. Ads would be shut down by Google, sooner or later.
STEEMsense makes more sense. It could be run similar to the way BuySellAds does it.