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RE: Improving the Economics of Steem: A Community Proposal

in #steem6 years ago

Give me an example of a business that is both good for the ecosystem and whose success depends on Steem itself to not function as a proof of brain content discovery and rewards token. Or give me an example of a project which would bring value to Steem whose prospects are hindered by Steem's ability to function as a content discovery token. I can't really think of any but I'm open to the possibility

The reverse is much more likely to be true: a working content discovery and rewards platform with a functioning front page will greatly attract real users and investors. This user base can then in turn be leveraged by businesses built using SMTs and Communities which will in turn bring more value to the system as a whole.

With the Steem economy how it is currently, voting rewards are predictably used as staking returns or payment, which is precisely how they should not be used. Profit minded businesses using voting rewards in lieu of transfer are far more likely to extract value from the system than contribute any real value themselves. And it's not their fault - we simply have the wrong economic incentives in place.

If we wait for SMTs and Communities on a broken system, when our front page is in disarray due to spam, bid bots and self votes and our alexa and cmc rankings are dropping steadily, how realistic is it to expect businesses built over this rotting core be able to garner the legitimacy and confidence required to only thrive itself but completely turn this place around? You're far more likely to get a few just extracting the dwindling value of this place and then moving on to greener pastures.

The underlying economy of Steem must be fixed. They're a higher priority than anything else and require far less investment, but they're the only change that can turn this place around and infuse value to every other endeavor we pursue (SMTs, communities, marketing etc.)

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"Give me an example of a business that is both good for the ecosystem and whose success depends on Steem itself to not function as a proof of brain content discovery and rewards token. Or give me an example of a project which would bring value to Steem whose prospects are hindered by Steem's ability to function as a content discovery token. I can't really think of any but I'm open to the possibility."

The reason this is true is because the incentives are misaligned. Any curation rewards are simply additive to corrupting curation for maximizing financial extraction, a la @therealwolf. Only providing a mechanism that financially encourages development and improvement of Steem better than rewards pool rape will change his behaviour. Tweaking rates will not do that, without adding another more profitable mechanism.

We need to focus investment on capital gains, not extracting gains from working capital intended to market Steem. Capital gains have worked to grow industry for literally thousands of years. Let's use that to our advantage.

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Hi, thanks for your responds @trafalgar.

Give me an example of a business that is both good for the ecosystem and whose success depends on Steem itself to not function as a proof of brain content discovery and rewards token. Or give me an example of a project which would bring value to Steem whose prospects are hindered by Steem's ability to function as a content discovery token. I can't really think of any but I'm open to the possibility

I can't give you proof of an actual business that decided not to come here, or said that they are hindered by Steem's ability to function. How should I know that? I don't run a business and I have no insight in other businesses books.
But it's clear, that the current Reward System has some fundamental problems that are effecting everyone alike e.g. Users, Investor, Businesses, the perception of Steem in general etc...
I think you gave to yourself the best answer on this point...here is your quote.
"If we wait for SMTs and Communities on a broken system, when our front page is in disarray due to spam, bid bots and self votes and our alexa and cmc rankings are dropping steadily, how realistic is it to expect businesses built over this rotting core be able to garner the legitimacy and confidence required to only thrive itself but completely turn this place around? You're far more likely to get a few just extracting the dwindling value of this place and then moving on to greener pastures."

The reverse is much more likely to be true: a working content discovery and rewards platform with a functioning front page will greatly attract real users and investors. This user base can then in turn be leveraged by businesses built using SMTs and Communities which will in turn bring more value to the system as a whole.

I agree, but in order to achieve that we need Admins for communities who set in rules and fight Bid Bots, abuses etc... All the good stuff about POB should happen within the communities, where there is some sort of guidance for the users, or even if some communities wish no guidance. The point here is that we need competition thru out the Frontends on a plain level field where all communities have the same access to the Steem Ressources aka. Steempower and Reward Pool. Thats why I would like to see Steem as an almost "pure" infrastructure Token (Voting for Witnesses, Voting on Worker Proposals and Voting on Dapps or Communities and SMTs or SteemEngine as the POB layer where Users create and curate for content.

With the Steem economy how it is currently, voting rewards are predictably used as staking returns or payment, which is precisely how they should not be used. Profit minded businesses using voting rewards in lieu of transfer are far more likely to extract value from the system than contribute any real value themselves. And it's not their fault - we simply have the wrong economic incentives in place.

I totally agree.

The underlying economy of Steem must be fixed. They're a higher priority than anything else and require far less investment, but they're the only change that can turn this place around and infuse value to every other endeavor we pursue (SMTs, communities, marketing etc.)

My suggestion has only that in mind to make Steem on a fundamental level more easy to understand and to handle so that the complexity of the POB mechanism can thrive within the different Dapps and Communities.

I see, maybe I misinterpreted your views, I'm sorry, I was going through a lot of responses

I merely like these economic changes implemented sooner rather than later as they're imperative for a functional content discovery and rewards platform. I don't believe SMTs and Communities could sufficiently mitigate all the ill effects of our currently economic failure want wouldn't not want to rely on them exclusive to get us out of this mess.

It's not really a choice between SMTs or a working economy, the latter should take very little implementation time if we can work out the details and converge on the right numbers. So either way, it won't be much of a setback or delay for SMTs and Communities :)

"...voting rewards are predictably used as staking returns or payment, which is precisely how they should not be used. Profit minded businesses using voting rewards in lieu of transfer are far more likely to extract value from the system than contribute any real value themselves. And it's not their fault - we simply have the wrong economic incentives in place."

This is exactly the problem, and tweaking rates and splits won't end it.

We need to end it, and we can.

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I really appreciate your efforts in order to change the mathematics behind the Reward curve in order to bring more quality and value into content creation and curation.
I think your solution of how to reward content creators and curators should happen on the level where the Action is...in Communities and SMT projects.
If we still try to fix the reward curve on the Steem Blockchain level we will still miss the problem that the Steem Ecosystem is not mainly about content creation and curation!
The fact that we have real business minded projects like Steemmonsters, who bring in value thru an awesome gaming platform, are still in competition to its underlying base Blockchain structure, which is Steem tangled up with Steemit.com (Aka Blogging) + Reward Pool distribution.
Its genuine counter productive to have the Reward Pool tied up to one aspect of the Blockchain - Blogging / Steemit.
The Baselayer Steem needs to be just an infrastructure Token which is good to serve RC ressources, Voting rights for Witnesses / Proposals and maybe approved Dapps and Communities (selected by the Steem Foundation).
I hope that you understand that I like your ideas and they will find their way in the POB mechanism, but they need to be implemented at the right level on the Blockchain, which is IMO the SMT projects and Communities.

"...the Steem Ecosystem is not mainly about content creation and curation!"

Exactly, in terms of financial incentives and how they have demonstrably been used.

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