When I first joined and read the white paper, I hoped whales would be strategic enough to act as a collusive group and avoid dumping recklessly and crush the price of steem. Now I understand that the whales, as a class not necessarily as individuals, are incredibly short sighted, opportunistic, and all too willing to kill the golden goose. I can't see how catering to them to prevent them from dumping without regard for the consequences is good for the platform long term. That basically turns this into a hostage situation.
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Some of us wouldn't mind buying more at cheaper prices.
"cheap" is a highly subjective term, particularly if the platform offers more value and long term potential.
What is good for the platform long term is to redistribute stake and be inclusive to new investors so it isn't so absurdly concentrated (with 1% owning 95%, and that is excluding the 'steemit' account). We'll have to agree to disagree on this.
I agree with you there, absolutely. I just think that there is a better way of going about it than dumping it indiscriminately.
Powering down and holding some STEEM without dumping it all is something that whales could be doing to redistribute stake while preserving the value of all stakes. I don't know what it would mean to be inclusive to new investors in an atmosphere of declining prices due to overselling.
But yeah, I agree with you in principle.
@smooth I think that's an oversimplification. Investors have to see that there is an upside and not only a downside. The price can't be low enough for an asset that will only decrease in value. The has been no history of a stable price since prior to July 4th. And there has been no history of prices increasing outside of a speculative bubble shortly after July 4th, and a bounce from Poloniex...
The platform will never attract a meaningful quantity of new investors by demonstrating that it is incapable of protecting the investments of existing investors.
Lower prices are much better for new investors. If I'm looking to invest 10000 USD I would prefer to receive a larger amount of stake for that investment than a smaller. I would also prefer more available upside relative to my fixed (10000 USD) downside. At the earlier 400 million USD market cap the upside was much more limited than it is now (though 100 million USD is still no bargain basement price). That naturally invites more demand from investors who don't want to buy in at an inflated valuation.
@bacchist
I agree with you there. The way to do that is to make the platform better and more appealing, not by propping it up so investors enter higher and get dumped on later.
I do not agree that a low price means that it can only decline, nor that at 100 million cap, it is anywhere near that. Plenty of assets decline to a value that is a more attractive entry point then gain more investor interest, particularly if the actual value delivered by the asset is increased.
@smooth
But the problem is that the pressure is continually downward due to the power-down timeline. Powering down is a two-year schedule. If the largest stakeholders are powering down and selling their stake and this can be expected to continue for at least two years - while they continue to sell more SP from internal accumulation - does this not become a problem with consistent, large downward pressures?
If whales are indeed redistributing their stake, I would expect to see them no longer accumulating through their curating habits and to see newer users buying the SP on the market. But I don't believe that has been happening, according to the figures that are presented every week. There is selling by whales, but there doesn't appear to be the off-setting investment back into the platform by non-whales. The buying of SP is much lower and whales continue to accumulate more through curating based on their large influence.
Am I missing something? Is there an aspect to this that is just lost on me? I don't see the redistribution of influence occurring because the Steem is being dumped in large amounts on the market and being bought by investors. I see some of it being redistributed internally from curating. The actual external investing is lacking. So, I don't know how dumping on the external markets actually redistributes. So far, the only effect that it has had is driving down prices.
@ats-david.
What you are missing is the increase in the money supply (aka dilution). As long as whales aren't buying back their own sales in a sham trade, it means new investors (or at least smaller investors) are accumulating it and the stake is being distributed. Curation rewards are only a tiny portion of the reward pool (currently well under 25%); it is mathematically impossible for curation rewards to offset dilution from content rewards PLUS selling. Not even close.
Currently there is an accumulation of liquid STEEM on exchanges being held either by speculators or perhaps by whales themselves, who are powering down but in fact not selling (we can't know for sure). That is unsustainable and before long that trend will stop. It is the natural evolution of a process where at one time there was 0% of the supply on exchanges (because there weren't any) and now there in approximately 2-3%.
I agree with @smooth here. I remember first finding out about bitcoin when it was around $30 and saw it shoot to $45 by the time I could get accounts set up to buy. I had strong FOMO. It was a bit disheartening to see the price eventually fall to $2, but I'm glad I still saw potential in it and had the opportunity to increase my stake at lower prices with a lot higher potential upside.
I've only recently found out about Steem and see its potential. I still think it has a lot of improvement before it gains traction and see the current phase as a reality check on the initial exuberance, just like the long fall of bitcoin to $2 before eventually gaining traction.