RE: Improving the Economics of Steem: A Community Proposal

ew-and-patterns 7 years ago (edited)

100% agree. Such fundamental changes should be automatically rolled back after a predefined time period, UNLESS the community votes to keep it.

I also think trafs logic is not correct. In my opinion, it only benefits the whales, everyone else loses influence, income, and incentives to post because the curators get a bigger share. 50/50 is nuts...

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6 votes

therealwolf 7 years ago

Whales can only benefit from curation if they own enough Steempower. Which is what this platform needs - more reasons for stakeholders to buy STEEM & power-it up, instead of selling since it's not really needed anyway (due to the implementation of delegations & co.)

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ew-and-patterns 7 years ago

Delegation is like 30% ROI. Good curation is 100+% ROI which is a HUGE difference.

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valued-customer 7 years ago

There is proof regarding your assertions, and it demonstrably contradicts them. Today CMC reports we are at 63, and have slid ~30 positions since I got here. Due to your exact recommendations. Your disingenuity regarding what is good for Steem is inexorable and provable, as your personal extraction of the wealth of the community has done the opposite.

I recommend to the community that whatever you propose, we do the opposite. Every tap of your keyboard is intended to increase your extraction of the wealth of the community. That is contrary to the interests of the community.

We need to create incentives that will financially encourage you to invest in Steem for dividends (since you'll never await capital gains) that increase the value of Steem and produce capital gains, or watch you extract that last bit of wealth that's worth your time, and witness the death of our community.

Please let me know when you abandon Steem, so I can turn the lights off when it dies.

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iflagtrash 7 years ago

I flag trash. You have received a flag.

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12 votes

anthonyadavisii 7 years ago (edited)

Think this may be a little harsh but I understand.

The TRW has helped somewhat in helping us fighting abuse but services like his have contributed to many a bad actor getting influence and/or cashing out our tokens at a lower and lower price

I am glad to coordinate with them to remove rewards from abuse but it is incredibly rare we get unvotes on abuse which frustrates the hell out of me.

The one thing I am looking forward to is MIRA. We can then run witnesses on consumer hardware (not sure of the impact on full rpc nodes) and hit the reset button on distribution. (We can out a fork in it.)

Too much influence is in the wrong hands to be honest. Folks, willing to sacrifice good for gain by serving the lazy and vain.

Btw what's you do to piss off ngc? Looks like you are on auto flag. That's a case against free downvotes if I ever saw it.

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valued-customer 7 years ago

I also greatly anticipate MIRA because I am a huge advocate of decentralization, and reducing the cost of plying nodes promises to advance that cause on behalf of Steem.

I've tried to advance a basic concept of investment: capital gains is the reward for increasing the value of the investment vehicle. Extracting rewards does the opposite and is contrary to basic investment principles and the vision of a social network that enables people to be rewarded rather than parasitized for their engagement. The slide in market cap is clear evidence of the consequences of not building proper incentives for investment in building value into Steem, and reveals the opposite impact of profiteering that extracts value from the vehicle instead.

This could be easily remedied were the devs able to grasp and effect necessary changes. Code is law. They're smart people, but likely to have little experience in investing. I prefer to account for the extant code as a result of that, rather than the other possible reason.

As to Bernie, I appreciate his attention. He may not realize how his autocomments will financially reward me should I adopt Snax. Our current relationship is proof that one should not approach vipers with the same innocent regard one does bunnies. What is in a person is what comes out of them, and given the history Bernie reveals across the blockchain, I should have known engaging him with any purpose other than pandering would produce venomous attacks, rather than cuddly snuggles.

I also agree that free downvotes would but spread the cancer of Bernie further and deepen it's harmful impact.

Thanks!

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1 vote

iflagtrash 7 years ago

I flag trash. You have received a flag.

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trafalgar 7 years ago

My very rough guess is that right now, around 70% of active steem power is redirecting rewards back into their own pockets through either self voting, voting selling to bid bots, spamming micro votes or some other means

This is because the current economic system pays stakers 4x as much to undermine by platform via the above means than to take part in honest curation. We've long passed the point where big stakers can keep each other in check with downvotes because we understand we understand that if any individual staker chose to use their voting power to downvote someone else, not only would it deprive themselves of the opportunity of claiming that reward for themselves, most of the rewards rescued will just be redistributed to others engaging in the exact same actions.

75% of author rewards might sound like a lot, but in reality stakers are claiming both the author and curation rewards of their own votes leaving pitifully little for actual content creators, irrespective of how good their content is. The paper value of the split doesn't matter if none of it goes in the right direction: that is gradually from the stakeholders to the talented content creators via inflation like it is intended. This isn't happening at the moment because our economic system isn't sufficiently incentivizing the stakers to vote honestly, thus the plead for EIP.

I actually want the maximum amount of rewards going from stakers to authors in an honest way at a steady rate. Because the part that goes back into the stakers pockets is redundant; making a inflationary coin just for everyone to reclaim is silly unless it serves a purpose: if it sufficient motivates stakers enough to actually find and reward good content.

Raising curation from 25% to 50% will mean authors will suffer a 33% on paper decrease in rewards. But 50% of an system where votes are mostly honest is vastly more than 75% of next to noting because the money just gets shoved back into stakers own pocket. So in practice, the idea is to get much more money into the hands of authors.

Economic system is not about the naive direct effects of a change, it's about the result at equilibrium. We can make author rewards 100% but if all the large voters just get that money back for themselves, authors see none of it and the system fails. The entire idea behind EIP is to make it more profitable for voting honestly (higher curation) and less profitable to do otherwise (threats of some free downvotes)

Of course if curation was 90%, most of us stakers would vote pretty honestly, but they'll be too little rewards motivating good authors to create content. So you see, it's an optimization problem of finding the right amount to mostly maximize author rewards in practice.

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ew-and-patterns 7 years ago

I understand that it is an optimization problem, but I don't understand why you are so fixated on 50/50.

Usually, when you are trying to optimize something you slowly turn it up until you reach a point where you see the change going into the wrong direction again. Then you start testing the range of the breaking point.
Lets say you find the breaking point is 45% curation. Then you try to find the best split in the 38-44% range.

I understand that testing would take months or years, but nobody seems to even consider testing this. Stinc could run a live copy of the steem chain an see how it would affect the distribution if you change the numbers.
But just picking a random number like 50/50 and hoping that it's the best split possible for reaching your proclaimed goals is delusional in my opinion. It might be better than it is now, but is likely not the best split possible.

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justinw 7 years ago

Wha tis the threshold, Is there an example of how this would work? It's pretty vague.

@vandeberg's deep dive on the topic should help explain this better: https://steemit.com/steem/@vandeberg/reward-curve-deep-dive

The idea is to gain the benefit of having a curve without moving far away from linear that we currently have. It's being described as convergent linear because you quickly converge into mostly linear, it could also be described as minimally superlinear. This is drastically different than the n^3 or n^2 that we had prior to linear.

No solution will ever be exactly perfect, but we may be able to attain something much better than we have and promote the type of behavior that most user's would like to see (by making it more economically advantageous to do so).

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6 votes

valued-customer 7 years ago

"No solution will ever be exactly perfect..."

No solution that only tweaks how corrupting curation can be profitably undertaken will. In that you are correct. However, code is infinitely mutable, and I have proposed mechanisms in reply to the OP here that do eliminate such corruption of curation as financial incentive, and replace that incentive with one to fund development via the SPS and @steemalliance.

Please take the time to set me straight on that proposal.

Thanks!

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iflagtrash 7 years ago

I flag trash. You have received a flag.

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12 votes

clumsysilverdad 7 years ago

ty, I've heard a hundred of these discussions, but there is never anything approaching consensus... kind of grinds on the community

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3 votes

smooth 7 years ago

SPS will be a big improvement since we can have stakeholders directly vote on proposals and see where people stand relative to consensus in an objective way.

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therealwolf 7 years ago

I've heard a hundred of these discussions, but there is never anything approaching consensus...

Everyone can voice their opinion, but listening to everyone is a fools-plan. Sometimes, it's better to listen to experts and just do it; and if it didn't work out, revert it back. (not saying that decisions should be rushed)

But this is simply a learning experience in a decentralised community such as Steem. Coming to decisions takes simply much longer than it would take in a centralised company.

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valued-customer 7 years ago

"...experts..."

LOL

There are no experts of consequence regarding these matters. Blockchain is highly mutable and there are no established standards. Regarding investment, there are thousands of years of history of investment to consider, and myriad examples that reveal a distinct difference between investment that creates capital gains, and profiteering that extracts profit from destruction of a vehicle.

'Barbarians at the Gate' is an excellent example of the latter, as are your own efforts. Warren Buffet is as good an example of the former - actual investment - as can be found today. I don't think that you'll be around for long, as you've started sliding down the backside of the curve regarding profitability of extractive corruption of curation, and I see but little sign functional incentives will eventuate to keep you around by providing a new curve you can surf into the foreseeable future that actually improves the value of Steem and creates capital gains.

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iflagtrash 7 years ago

I flag trash. You have received a flag.

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12 votes

oldtimer 7 years ago (edited)

The only important consensus is between steemit. inc and witnesses.
Luckily.

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1 vote

trafalgar 7 years ago

Larger accounts having a bigger say in the way rewards are distributed is an unavoidable consequence of stake based consensus. As much of a disadvantage as this may seem, it's one of the few sybil resistant ways that things can work in a decentralized fashion.

The idea is to get stake based voting to approximate general consensus over content appeal. This can only happen if stakers are motivated to vote in a way that consistent with their honest estimation of the general appeal of content.

Currently stakers are not motivated to do this because curation rewards are too low so they just end up selling votes or voting themselves causing the broad system failure. We have to change the economics including curation to entice them.

The phenomenon of having established popular authors gaining higher rewards is something every social media platform sees. To some degree, it's not a bad thing as people building a good reputation based on skill and talent will see increasing rewards over time. Higher curation itself doesn't solidify established authors, as there's a zero sum game between curators to vote early (but not too early) to take more curation rewards from later voters, but not to over vote due to the threat of downvotes.

Downvotes suck yes, but they're necessary to turn this place around. I'm not advocating for a separate pool the same size as the upvote pool, but just a fraction of that size so that we all have a stick to keep the other stakers honest that doesn't cost us money to swat them with.

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3 votes

valued-customer 7 years ago

"Larger accounts having a bigger say in the way rewards are distributed is an unavoidable consequence of stake based consensus."

This is false. It is entirely dependent on incentives as to how that distribution is effected. Currently, and under your proposal, financial incentive will promote extraction of rewards for ROI.

"Currently stakers are not motivated to do this because curation rewards are too low so they just end up selling votes or voting themselves causing the broad system failure. We have to change the economics including curation to entice them."

Substituting gaming curation rewards over selling votes does not fix corrupting curation at all. It just changes how that corruption can be gamed. The change of economics necessary to fix the problem is to eliminate incentive to game curation altogether. Nothing else will prevent @therealwolf from maximizing his financial returns from corrupting curation.

A critical part of that equation is financially encouraging development of Steem via SPS dividends to promote capital gains by improving the investment vehicle, and together both mechanisms I propose do that.

"Downvotes suck yes, but they're necessary to turn this place around. I'm not advocating for a separate pool the same size as the upvote pool, but just a fraction of that size so that we all have a stick to keep the other stakers honest that doesn't cost us money to swat them with."

Downvotes are broken presently, and adding financial incentive to Bernie's efforts to censor will not fix the problems. Look at my last 100 comments for necessary background requisite to consider how to fix downvotes. I'm fine with how they are now, if the only alternative is making it actually profitable for Bernie to flag.

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5 votes

iflagtrash 7 years ago

I flag trash. You have received a flag.

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14 votes

anthonyadavisii 7 years ago (edited)

Didn't Ned speak in favor of vote selling in the past?

Indeed. IIRC he called it an interesting business model or something to to that effect.

That, my friend, was a catastrophic fail of both leadership and ethics imo. He could have readily nipped that problem in the bud long ago.

Tbh it is one of the single greatest reservations in investing in the platform. @ned giving vote selling a nod and now their kind are basically running the ship.

I don't know what kind of cognitive dissonance some of these stakeholder must be experiencing. They have been selling votes for their financial interest instead of fostering an economy that encourages meaningful contribution. Now they suddenly think 50/50 is going to change the dynamic?

No. The incentives will still favor vote predictors / curation snipers over people actually evaluating content.

And free downvotes? Don't get me started. The most vocal advocate for this is one that self votes his alts all the time. Now they want free downvotes? Why? So they can downvote competitors bid bot posts and not lose the opportunity those precious proxy self vote opportunities? Or maybe they just want to downvote actually trash to virtue signal while proxy their trash.

Bunch of damn hypocrites if you ask me.

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7 votes