I think we should use this 15% of new Steem elsewhere.
I have seen this argument made several times before about eliminating the "interest" on SP. I think calling it "interest" is a bit of a misnomer. At best, these distributions are a way to help mitigate dilution. Eliminating the distributions effectively makes holding SP more "expensive" for users and will likely result in fewer people willing to hold SP. There is already little incentive to hold SP. What would you propose as a way to mitigate dilution if you eliminate distributions to SP holders from the equation? Or should SP holders simply accept the greater dilution?
I propose that most of this amount gets added to the reward pool while some of it will go into a fund, perhaps controlled by Steemit Inc, to further support certain projects.
A couple of things here...
First - Steemit, Inc. should not be given more stake/control/money than they already have. In fact, they ought to be reducing their current holdings...by a significant amount. We continue to hear them speak out of both sides of their mouth when it comes to "decentralization" and what they're willing to do to promote their own website. The last thing that most people likely want to see is further concentration of stake/control/money into the hands of a few people, especially if actual decentralization is the goal. This has been one of the most prominent vectors for attacking Steem/Steemit since last year.
And quite frankly, Steemit, Inc. has stated on several occasions that they don't have much interest in improving their site and marketing this project themselves. With the money that they already have, they should be fine with continuing the relatively slow pace of development that we have already witnessed. Giving more money to them won't change much, in my opinion.
Secondly - I don't think the reward pool needs a larger percentage of rewards. If anything, as was stated by @pfunk already, there needs to be better rewards for those who are willing to buy/hold stake in the platform. That means providing better incentive/benefits for those users who actually want the influence and actively use it. Currently (at least the last time I saw it calculated), authors are earning 88% of the rewards on average, compared to 12% for curators. The ratio is coded as a 75/25 split, but due to the reverse auction, stakeholders using their influence receive about half of what is allocated by the code.
It has been stated many times by users (myself included) that the ratio should be returned to 50/50. This would give a much larger incentive for users to power up their STEEM and possibly even drive demand for STEEM much higher than it is. At the very least, it would likely reduce the number of accounts that are powering down. Of course, the split wouldn't even be 50/50 due to the reverse auction, but it would bring the ratio much closer to even than it is now. With the number of readers/voters greatly outweighing the number of authors, it makes sense to have a larger pool for them, especially if onboarding and large-scale adoption is desired.
This is an economic-based platform. If you want more of something, incentivize it. If you want more people purchasing STEEM and powering it up, make being a stakeholder more lucrative.
On the same note - if you want less of something, make it more economically painful to do it or simply reduce/eliminate benefits. Killing the "interest" for stakeholders and giving more money to those who have no need to invest/power up is a sure-fire way to reduce demand for STEEM and will likely just encourage more and perpetual dumping.
Let's find better ways to improve demand for STEEM rather than proposing essentially the same ideas time and time again for killing off any desire to be a long-term investor. After all, short-term speculation was what they (allegedly) wanted to avoid with this project...because it's what all other cryptos have done. We need more long-term thinkers around these parts. Too many people are only interested in right now and many of the complaints and solutions that we've seen over the past several months reflect that. This needs to change.
Thanks for your robust reply, upvoted.
I take your point about the author/curator split, admittedly I'm not sure how that works, and there may be reasons why the effective split deviates from an economic optimum. However, just from the hearing 'reverse auction', it sounds like market forces are dictating the rate to be what it is, which at least at a cursory glance would seem fair. But there may be more to this, thanks for alerting me to this issue.
The interest (I don't think just because it doesn't beat inflation doesn't disqualifies it from the term, but that's semantics) may serve merely to mitigate some of the effects of inflation. If we're completely unable to agree on how the 15% should be spent, a common denominator would be to deduct 15% from the inflation rate and remove this part entirely. This would effectively have almost no change but makes the numbers on the books a lot clearer by removing an extra layer of market analysis and thereby improving efficiency in arriving to a more accurate overall price equilibrium.
It may be true that some believe there is insufficient incentive to hold voting power and removing this 1.5%pa will, however little, reduce that incentive even more. I am not disputing that, but I wish to point out that the 'however little' part is very important. The question is: is the marginal extra incentive of holding SP gained by this interest payment sufficient to cover its cost of 15% of the new steem created? How many people are right at the razor's edge between holding and selling where a yearly interest payment of about 1/4 of the daily volatility of the underlying asset is likely going to shift their view one way or the other? I honestly don't believe that number will justify a cost of, as of now, $900,000 a year or so. Having 1 person with a million dollars, or 100 people with $10,000, or 100 million people are all examples of of a distribution of a million dollars, but they represent vastly different utility values. The form of distribution in the interest payment in question, I feel, represents a sub optimal utility value to say the least. To surmise it as 'there is insufficient incentive to hold SP as it is, reducing it further would just make it worse' is not quite getting the point.
I happen to agree that there exists insufficient reasons to hold SP right now. My personal belief is that this is an incentive that has to arise organically from the desire and willingness to partake in a robust platform or ecosystem of platforms. The bigger and better Steemit, Squeak, Steepshot, Busy, etc are, the more people will naturally be incentivized to take part and have a voice by building up voting power. The wealth redistribution in our ecosystem should center around only directly rewarding the production and discovery of the best content, as well as the maintenance and development of the platform/s. Any other incentives such as directly attempting to bribe people into holding voting power via any means without otherwise contributing is introducing an element of inefficiency into the ecosystem that is economically guaranteed to be a deleterious impact. Even if I am wrong about this paragraph, or if you disagree with me here, it doesn't invalidate the previous paragraph.
Finally, if you read my piece and are not convinced that Steemit Inc should receive more funding I can understand. They certainly didn't ask for it and I'm not affiliated in any way. Out of a decentralized currency, decentralized distribution, and decentralized development, I think the first 2 are good but the last part is not very competitive compared to established businesses. It is overall a difficult balancing act to get right.
Thank you again, for your reply, especially about educating me on how the authorship/curation split works (which I shall look into). That's a separate issue, and I may well agree with you there after researching it.
I'm not at all married to the concept of paying people with inflated currency in order to mitigate the effects of inflating the currency. So on that, we can reach agreement.
What I find, however, is that most of the ideas that are suggested or proposed never address the purpose of the incentives or how to balance the rewards structure for both authors and voters/investors. Many of the solutions focus on how more rewards can be given away to those who have no desire or need to be invested in the system. The original ratio was 50/50 for authors/curators. It was changed to 75/25, with an added reverse auction to mitigate automated voting, which ended up creating the 88/12 average.
So to me, the first step for increasing demand for STEEM and more participation in the platform for a larger number of users would be to increase the rewards/incentives for those who are not and have no desire to be bloggers. If we want to eliminate the SP "interest," then that should be the next logical step. Increase rewards for those who actually take a long-term approach and want to be influential and involved in the day-to-day activities on the platform.
And as far as centralized development is concerned - as I already stated, Steemit, Inc. hasn't exactly demonstrated that increasing/improving development is their goal. They have stated explicitly that their flagship site likely won't be improved beyond "just good enough." If they want more money than the many millions of dollars they already have, then they should demonstrate that this money will actually be used for development, marketing, etc.
I can live with eliminating the 15% inflation/distribution altogether...if curation rewards for SP holders were brought back to 1:1 with author rewards. We need less money flowing out and more incentive for more users. Votes will always outnumber posts. Voters will always outnumber bloggers. The focus should probably be more on the average reader/voter and not the average content creator. That's where the real growth lies. Well, that...and having an attractive UI that people actually want to use.
Yes, I'm glad we align in our view that using a bit of the inflation to pay an amount to mitigate inflation is pretty inefficient.
I think we both recognize that rewards on this platform has to revolve around creating, discovering, curating, maintaining good content and the platform/s necessary for such actions. Other forms of arbitrary rewards like a direct pro rate inflation of currency, or a random lottery that are not directly promoting those above effects are probably sub optimal.
You make a strong argument that the balance between authorship and curation is too skewed to the author at an effective rate of 88%. I am inclined to agree here. My initial instinct is that 50/50 would be a little too heavy on the curators side and perhaps insufficient motivation for authors to create quality content, and maybe something close to a 75/25 effective split would be closer to the mark.
Having discussed it in chat however, it appears I'm in the minority here and that most ppl would rather see a stronger balance towards curation more in line with what you've suggested. Perhaps my lack of experience and authorship bias is compromising my judgement here, as it is sort of an initial gut instinct. Either way I do agree it needs to go down from 88%
As for steemit,inc I feel that they do work hard and Steem's success is heavily dependent on them for the foreseeable future. I've already put forward my case as strongly as possible, but it is quite reasonable to remain unpersuaded.
Ultimately real growth lies from a well functioning streamlined platform/s with easily accessible top quality content. This requires talent that's willing to create that content, people willing to discover and make that content more accessible, and developers to make and improve the platform. The incentive balance we eventually get probably won't satisfy everyone perfectly, but hopefully satisfies most people sufficiently, and on point enough to lead a bright future for Steem
Thanks for sharing your thoughts @ats-david, I enjoy your posts
Why go to Steemit Inc when it can go to a type of smart contract that distribute when a project is approved by the community?
It can, I'm pretty much for anything other than where it is now
But to answer your question, I believe a centralized development team with a decentralized monetary system is the key to a successful platform. I outlined why I think it's important for Steemit Inc to have ongoing funds in my article.
I do think though, that it is reasonable to disagree on where the funds go, but staying where they are is very wasteful
Agreed
This is my big asking whether someone can put LIAIKE my cats, blogs and even better would be a donation would advance saaks. Thanks famous cats who made donations. BIG THANKS IN ADVANCE @urmokas
Excellent reply; you gave voice to what was rattling around in my head. It certainly is disturbing to me that Steemit doesn't want to improve the site without offering some alternative. Perhaps the site could eventually be moved into an open community where all the users essentially play a role. Some would do the actual coding, others would "vote" for features by putting STEEM into escrow to pay the coders. Likewise marketing, project management, etc. Unfortunately, such a system is likely to suffer from huge amounts of inefficiency, so it may well be bad idea.
Ultimately, if Steemit is going to grow and attract users, some group needs to be constantly improving it. I would argue that right now Medium is a much nicer site to use. If that doesn't change I fear Steemit will end up sitting on history's rubbish heap.