Are Investors Looking At What Happens On STEEM?
Early last month I wrote a post wondering whether or not what we did on the social media side of STEEM—good, bad or indifferent—really had any influence over the typical investor looking for ROI, or if there were other factors that would drive their decisions.
I've decided it would be a good idea to open it up to those of you in the community who would care to weigh in on this subject, because I think it's important to see what everyone is truly thinking.
I say that, because over the last two years it has been posited in one form or another that things like bid bots (now more of a moot point than before), reward pool abuse, circle voting, flag wars or just even "downvoting for no particular reason," plus whatever other inanity that one might take exception to—all keep investors away.
To do this, I guess I'm thinking of the investor that has some resource large enough that they could power up at least a couple hundred thousand STEEM if they so desired. But they're not necessarily looking to use the platform or invest a lot of time in into, too.
So, not so much a typical user trying to earn rewards through blogging, etc., but one who's looking to get some decent ROI, however they might do that.
Currently, as far as I know, if you're not going after author rewards, the main choices to earn are curation, delegation leasing, and the 'interest' that all stake accrues thanks to the percentage coming from inflation.
So, that's the type of individual I'm thinking of when the term investor is used. They might have an account, and technically that makes them a STEEM user, but in reality, they're not here to post, comment, or even manually curate, become part of the community, etc. They want somewhere to park some funds where they will get decent to awesome return.
To me, that's different than the typical user, where I would say many absolutely do care about what goes on here, the direction the platform and the community are taking, and how we ultimately interact with one another. And while an investor might have an eye on how many are using the platform and how they feel about it, I wonder if that's what they are really looking at first, second, third, fourth, etc.
So, what do you think? You can select as many options as you like. If you feel inclined to provide a little more along with your choices, please do so. Especially if you choose other.
I know there are at least a few who have problems with dpoll for some reason (technical or otherwise), so don't feel like you need to go there to participate. Through dpoll or however you accessed this post is fine. I'd rather have the input and the participation if y'all are reading this post and are inclined to speak your mind.
Image source—Pixabay
In my opinion, investors are most certainly looking at and care about:
- Vote buying/selling
- Reward pool abuse
- Circle voting
- Flag wars
- Downvoting 'just because'
- Governance
- Inflation
- Decentralization
- How we treat one another generally
- What Steemit Inc. does
- How the dApps are performing
- The number of users
- How much and ease of ROI
- Whether there's marketing and how good it is
- The direction the platform is headed, if in any
- What the platform is, does, or how it's defined
- Other (please specify)
Answer the question at dpoll.xyz.
That's actually pretty thought provoking. I'd never thought of looking at this purely from an investment point of view and you could be right, it doesn't really matter what people are bickering about on the platform, so much as what kind of ROI there is. I guess if I didn't want to interact on here, then my approaches would be leasing or setting up an autovoter for authors who'd give a good curation return. Other than that, I'd want to know if it's a viable coin with enough longevity and demand. The fact that you can earn from your investment should be plus. Can you earn like that from many other coins?
Hey, @minismallholding.
I think the majority of us come in with the intent of using the platform, and essentially building our stake through sweat equity—time and effort versus buying STEEM and powering it up.
For us, the daily active users, we definitely care about all of those things. We want some semblance of fair play, civility, etc., while, hopefully, not expecting equality of results (since that never happens).
However, the person who has resources amounting to a couple hundred thousand STEEM or more, who could essentially invest it anywhere, to me, wouldn't care about what we pay attention to so much as long as they can get their passive ROI. Delegations would seem to be the way to go along with 'interest' earnings. Or even setting up the auto upvotes with a curation trail or proxy they trust.
And they would definitely want to know as much as they could about governance, direction, longevity, deliverability, etc., because those things make the difference between a long term investment and a fly by night, pump and dump kind of situation.
STEEM, at present, is fairly unique in the ways you can earn, though there are copy cats, and would be challengers hanging out there. So far, none of them, especially in the crypto bear market, is paying out in rewards what STEEM does. So, the answer is no, there really aren't any other coins at present that you can earn like you can with STEEM, with some asterisks attached.
Most coins depend on some form of the scarcity model, while STEEM is much more into utility. It probably could and should pay more attention to the scarcity aspect by doing something to limit the actual amount of inflation (it's about five points above what it's actually supposed to be right now), and getting SBD to the $1 USD peg again (or doing away with it entirely, take your pick).
I’ve honestly never understood the desire to cater to investors, it seems a “cart before the horse” kind of approach. Actual users should be the main focus as the value of any network grows in relation to its audience and userbase.
So that being said, I think dApp performance and number of users would be the core metrics any serious investor would be most interested in. By serious I guess I mean a venture capitalist with a multi year horizon who is looking for appreciation in the token value. The opposite is the more “vulture capitalist” types who seek to acquire tokens via methods that inherently devalue them.
I know, right. The prevailing sentiment has been just that and it's ass backwards.
Should be pushing for users first and then that's what will draw in investors or folks that want to benefit from our future sprawling platform (wishful thinking?)
But I also think the nature of the investor is important. It's obviously not great for Mr. Moneybags to join and create a vote farming network to exploit our vulnerable reward pool. Need good faith investors not just anybody with money to throw around.
In other words, less Bitconnect esque ppl and more crypto revolutionaries that believe in what this technology is capable of and uses their resources to help build the vision.
That's how I see it at least. Good answer!
Hey, @bryan-imhoff.
I think the question about pursuing investors plays to the identity of just what STEEM is. Some of us think we're a social media platform, others an investing platform, and there's probably another half dozen legitimate answers. You're looking at STEEM as a utility blockchain that can be built upon, and how that potential diversity of application can bring in more users than one single use case could.
So, I like what you're saying. I wish it were more venture than vulture, too, but we don't seem to be out of that cycle yet.
Yeah, I hate the mindset of “investors” who see ROI as token acquisition vs. raising the value of the token. Enough of that type of thinking actually creates a de facto Ponzi type structure... which is a good reason to discourage the wrong type of investors.
Here is how investor could expect as passive return:
Curating - the expected return here is around 6%-8%
Lending - return variable, but I see it floating between 8%-13% yearly
The catch: inflation. Today there is a inflation rate of 8.59%.
This means the real passive ROI would be between -2.59%-4.41, Wich it isn't really attractive, because you can easily find low-risk investment 8% yearly return investments inside and outside cripto space.
Interesting here is that curation functions as a way to fight inflation.
The other way of having a positive ROI is the the token price appreciation, Wich can only happen if there is demand increase, but as we can see in some statistics, this isn't happening (no increase in new users/blockchain activities)
So, yeah. Steem is a bad investment. High risk, low return.
But it's fun tho 😛
Hey, @phgnomo.
Thank you for the analysis. It's pretty sobering when you trot out numbers like that. :)
But, I'm even more convinced that the typical investor is looking at things like you've mentioned much more than they are at what the daily active users are doing or caring about.
When you think as an investor side, the basic way of thinking is "how to, how much and how long".
The only way to "invest" on the blockchain is buying Steem Tokens.
Then the investor question is "what value can i get from what i bought".
Since the passive ways don't give a good return (if you consider that the STEEM price will be the same), the only way to have a higher return than other options is by price increase.
And the only way for the price to increase, is an increase in demand.
So, unless there is a good upward trend of new users/activity on the blockchain (wich in theory could increase the STEEM demand), there expected return on Steem as an investmend will continue to be bad.
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What the platform is, does, or how it's defined. This is pretty much the catch 22 but to be more specific:
There are many other aspects we could evaluate Steem such as the community, the people, but I just wanted to point out a few important ones I would consider on a technical level and a bit on a social level.
Thanks for the thought provoking poll!
Hey, @anthonyadavisii.
Thank you for the great analysis.
I like the breakdown, and I particularly like the way you couched 4 and 5, since the way you've put them make more sense to me as something an investor might be concerned with rather than a general term of reward pool abuse or flag wars.
The first three would seem to be primary among things investors would look at in any type of online system. It has to have a purpose, it has to do it well, and it has to be able to withstand everything bots/hackers/whoever might want to throw at it.
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Hey, @bluerobo.
I'm with you on the last three, especially if the investor is cryptocurrency based and gets the decentralization part.
I just wonder how much one with a couple hundreds STEEM or more locked up in an account is spending time on social media side of the blockchain. At least in the day to day.
Congratulations @glenalbrethsen!
Your post was mentioned in the Steem Hit Parade in the following category:
Hey, @arcange.
Well, what do you know. Cool. :)
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!trdo
Hey, @vimukthi.
You and I seem to align quite a bit on things, so I'm interested in knowing where we differ and why.
So, I'm wondering about flag wars, downvoting and how we treat each other. The rest I'm in total agreement that an investor is going to look at those things.
Would they get into the details of the activity on the social side, or have it persuade them not to invest, if the rest of your list is looking good? I suppose it would compound things if the rest weren't doing well.
I don't think the flag wars will be the first thin an investor would be thinking of. It will act as a secondary reason keeping them from investing more or simply demotivate those who were on the fence regarding investing into STEEM.
Some investors may post once in a while (at least comment) or maybe they will have friends or people who they are fan of becoming casualties of toxic behavior. If they see good authors leave or post less due to these downvoting related toxicity, the investors will hold STEEM at a lower valuation.
I do believe that SMTs and reducing free downvotes can help the situation massively.
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!trdo
Hey, @d-zero.
That's quite the list you got there. :)
So, regarding the on STEEM actions—flag wars, downvoting just because, and how we treat each other, I'm wondering if you know of any investors who have been concerned with those things. Or maybe someone has posted to that effect? It would be good to know once and for all if that's actually factoring into why investors are staying away from STEEM.
I remember many users who were producing great content left because of flag wars and and not so great behaviour in the community. Here's a huge casualty: https://steemit.com/steem/@tcpolymath/it-s-time-for-the-voting-system-to-end
There's many similar situations I've seen over the 2 years I've spent on STEEM. They are not exactly "investors". But they were all valuable and I'm sure investors wouldn't want to take part in a community that turns out to be more like a 4chan or angry reddit group. I think STEEM should aim to be more like LinkdIn in terms of community behaviour.
I definitely agree that we should aspire, and then do better, as far as how we treat each other. It's kind of mind blowing that there are people here who don't see it like that. It makes me wonder what goes on in their lives that makes it somehow okay to be uncivil. But then I'm not privy to everyone's back and forth here or on Discord or anywhere else and so I largely stay out of the way.
I've never been much of a fan of Reddit, angry or not, so I'm in agreement there, too.
I know of tcpolymath and always found his comments I would come across to be insightful and educational, since it was usually about something I didn't try to think about, or didn't know I should. :)
STEEM as a community has a lot to do, and as tcpolymath and others commenting say on his post, as a social media site, STEEM isn't as fun as it's been in the past. I've been thinking of all the folks I could converse with. Now, most of those folks are either completely gone, mostly gone, or off doing other STEEM things, mostly games.
So, no disagreement with any of that. The question for me is, while ultimately the number of users in a project will draw the attention of an investor, I'm not sure the social side of STEEM is necessarily where they would want to put their resources, anyway, with or without toxicity. STEEM will have to build out much more than it has, and attract someone who actually has the desire and the capability to create cutting edge social media dApps for that to happen.
Otherwise, all the mainstream social media sites do what their STEEM clones do better, and still draw the people despite the privacy and online property concerns, the control and manipulation, and the inability for most to earn much of anything, if that's even something the site does.
Right now, it seems like the innovation, and thus the fun, are more in things like Splinterlands, and I would imagine that at some point, it's other types of businesses and services being built here that will carry the day for STEEM. The social side was supposed to be a Trojan Horse to get the people here. Unfortunately, I don't think the social part ever got far enough off the ground before the content police clamped down.
Money changes things, even if cryptocurrency is meant for bigger and better things, and the exact opposite of what some people still try to make it—their own circles of power and control.
This is the saddest part of it all. The place where I'm having the most fun is actually Splinterlands (+ some NextColony) I really hope SMTs would help to bring more serious writers in and make sort of a decentralized Medium.com That would be really awesome. At the end DAPPs will be the lifeblood of STEEM in the future. It's having all those projects that has kept STEEM going ahead while competition falls behind.
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Internet personalities (Influencers) who use steem or steem based dapps on a weekly basis.
Hey, @felix.herrmann.
Yeah. I'm in agreement with your choices.
The personalities/influencers part is an interesting thought, but I wonder about it, since so far, the few I'm aware of who have tried to get traction here haven't, for one reason or another. Some of it has been the community actually turning a deaf ear or blind eye, but a lot of it has to do with the failure of said personalities/influencers to convert their audiences into STEEM users.
Therein lies the problem. STEEM is a different beast in that you need to do more than what you typically have to do be a user elsewhere. Inevitably, thanks to RCs, you either need to earn STEEM/SP, or you need to buy STEEM and power up in order to curate those personalities/influencers. And the way things are right now, that's not a simple ask or task. For the masses to follow the influencer, it needs to be drop dead simple.
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Hey, @c0ff33a.
Yeah, I tend to agree with all of that. I'm waiting on some others who answered to see if they can give me either some evidence of or some kind of argument for the on platform shenanigans making a difference, but until then, I think these are the things that the typical passive investor is looking at.
I'm no expert, those were the points that stood out to me as the important aspects people will look at. If I am honest the Steem Blockchain has so many massive benefits - but I don't think even half of them are promoted. One big issue I see is promoting "Your voice has value" which I am sure is why so many people join and then leave very quickly - because unless they are super lucky nobody is going to join and then get any sort of post reward on their first 10 plus posts. They are given the expectation of rewards but the reality is different. Instead the focus should be on the fact they can create a blog for free that is backed by a decentralised Blockchain and therefore whatever work they put in will always be there - how many people spent days creating content on free blogs where the server shut down and everything they had worked on went with it. The Steem Blockchain has 150 Witnesses with copies of the Blocklog - that data will be around forever. I have two Witness nodes - all I need is a Master Node and I could run the blockchain on my own if needed.
Hey, @c0ffeea.
Agreeing again with both main points—the idea of getting paid to post is pretty central to what STEEM offers, but it needs to be tempered so that expectations aren't so high. We need a way to educate folks in a decentralized fashion (however that works), but I don't think we're completely there yet.
I like the idea of their always being a copy of our stuff available as long as there are witnesses.
I'm of the mind as we get into Communities and maybe SMTs that each individual group will need to start tailoring the marketing message to those who would be interested in that niche, something that appeals to those folks, because STEEM can probably deliver it easier than a one-sized fits all "get rich quick!" type of message, that has already proven to bring people in, but as equally proven to be lousy at retention for the very reasons you cite.
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Hey, @abbak7.
I tend to agree with the list you have there, plus a few others. Investors tend to look at growth potential, and if no one knows about STEEM (ie, marketing), or someone else controls the narrative (Ie, bad press), then I would imagine that STEEM falls down the priority list to check out and do due diligence on.
And, although were looking for decentralization of governance, Steemit Inc. is still by far the main (if not the only) developer of the blockchain itself, and so for better or worse, the outside public is going to look at them (especially since Steemit and STEEM are still confused way too much).
And whether or not the platform as a whole is headed in a good direction, however that's defined, draws attention to it, too.
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Hey, @jeffjagoe.
Yeah, I tend to agree with those choices over our antics here on the social media side of the blockchain. While numbers of users play into that, I think they're looking at what other blockchains offer versus what would be provided in ROI here and how you would get it.
agreed, I think most investors don't even get to the point where they see the antics... but hopefully that can change in the coming year. Things are looking real cool around here... but maybe that's just me... I've been thinking it all along
Compared to 2018, where it took all year to get to HF20, only to have Steemit Inc. let go most of its workforce, 2019, with all of its under-the-hood improvements, new Steemit management, improved communication, getting back to SMTs and Communities after two more HFs, and the EIP, which essentially did away with bidbots and increased the amount of curation trails (if not curation and auto curation as a whole), I think you're right. Things are looking better. I don't know if that holds true for everyone, but I feel it does for me, and I've not done anything other than post, comment and manually curate what I can.
So, hopefully that does get noticed.
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Are there any investors left?
The number of the daily active users is decreasing (dropping/falling) since months.
Hey, @xplosive.
Good question.
According to the definition of investor I was going for, the answer to your question could be independent of daily active users, since the investor wouldn't be looking to 'use' the platform as such, but rather figure out the best way to passively earn their ROI. So not posting or curating.
However, to whatever degree each of us do it, we are investors, too, if we stake STEEM. I get that. I was just thinking of big money who can do anything with it and might choose STEEM, rather than most of us who come here to do some degree of blogging/social media, curating, commenting, etc.
Users obviously care about what goes on here, and that certainly effects the number of users, but churn is expected regardless. STEEM has been suffering in part by the fact that even if we had people coming to it in droves, they haven't been able to get accounts very quickly, even though HF20 was supposedly for ramping up onboarding. I'm really surprised that's never been a big issue. It kind of got lost because RCs kind of stole the show, but Velocity has never really happened.
If I was an outside investor, I would be looking very hard at the apparent internal collusion/good ole by networking going on at Steem.inc, and the lack of concern that has been shown toward upholding and enforcing their own White Paper. An investor needs to feel there is trust in the company and in it's standards, I don't think Steem.inc or steemit.inc have shown themselves to be very trustworthy.
But that is just my view, my perception of Steem and steemit. I am not an investor, and am not sure what they would look at trust wise from a company.
Hey, @bashadow.
Oh, I think they would look long and hard at whether a company is capable of providing a product people want, and following through on deliverables, along with their long term goals. Things can look promising to start, then bottom out.
If you'd asked me what was going on at Steemit Inc. in 2018, I would have been hard pressed to give a positive answer. Too much trying to be accomplished at once with no clear direction or reason for doing so, really.
However, 2019 saw a lot of house clearing, getting what I call lean and mean, and focusing on core values and necessities, and I think that's made things quite a bit better.
I'm not at all sure I understand how decisions get made, how much they actually care about what the normal users wants versus the main stake holders and or the witnesses, but it does feel different now we're in 2020 then it did for all of 2018 and the beginning of last year.
Steemit Inc. has been rathe quiet of late with their updates, too, which may just be a byproduct of the holidays, or there not being much to report on because SMTs are in the testing phase and Communities in open beta.
So, anyway, personally I'm feeling a little better about Steemit Inc than I was, but it probably wouldn't take much for me to be right back where I was previously, wondering what the heck they're doing or not doing.
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Hey, @fernandosoder.
I agree completely with your choices 4-11. The first three, I'd need more convincing, I guess, since I see the typical big investor as someone who doesn't really have time or desire to get on the social side of things and see what people are saying or doing.
That's not to say they shouldn't, or that your 1-3 aren't something to be concerned about—I just know that people have their own definitions about what constitutes those things, and to what degree, and none of it is really prohibited or policed, other than what some users might attempt to impose on others.
I also wonder to what degree any of that truly affects STEEM. Especially now, with the EIP in place.
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Hey, @wakeupkitty.
I know it's a pretty big concern among us users, and one of the reasons why I don't favor downvoting as it is currently constituted—essentially without rules, and now with a few free each day.
I'd like to think that investors who are just looking for ROI would be interested in such things, but I've seen too many accounts just sitting on STEEM and not actively participating other than through some form of delegations or proxy voting for it likely to be that they're even on STEEM on a regular basis and have even an inkling of an idea of what's going on in the community or on the platform at large.
@glenalbrethsen The platform, new steel, is for investors and they do not have time to be here or do not like to be here and invest. That is a huge problem. Let's hope the bigger group will use its voice and make it the platform we like it to be. ❤️
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Hey, @erica005.
Yeah, I tend to agree with those options and a few more. Steemit Inc is still pretty much entangled with STEEM and will be as long as they're the gatekeepers of the STEEM blockchain or what happens under the hood.
What the ROI and how easy it is to get it will also be a top priority for any investor, even if they are in it for more than just that. If you have to spend time, effort, etc., to get what you could earn elsewhere just by parking the money, well, it seems like a no-brainer to park the money elsewhere.
And with marketing, we've already seen some pretty flimsy token projects get a lot of attention because they yelled loud and long enough. :)
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Hey, @akdx.
So, a typical investor, of all the options available, is primarily interested in reward pool abuse? :)
I guess if it were large enough to somehow minimize their ROI, I would agree.
I wonder if it's ever reached that level, and whether it's actually happening to such great a degree now, with the EIP in place, and the major abusers stopping their posting or being downvoted. I wonder how we could even determine to what level the abuse is actually reaching, since every attempt I've ever seen posted was not so conclusive.
I missed the option about RoI.
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I use the same criteria for other projects and compare them.
Hey, @scorer.
I like how you seamlessly added your own bullet point (price :). I actually should have included it, so thanks for making it look like I did. :)
I have to agree with all of those, and it gives me comfort that you are here after applying that criteria to STEEM. :)
I'm tiny micro investor and from my little experience, price is what is important. It is the only way to measure success of failure of your investment. 😉