Thoughts on the Steem Proposal System (SPS)
We have another set of protocols to consider for a possible hard fork of the Steem blockchain. For this potential hard fork, we will be considering the Steem Proposal System (SPS) and the Economic Improvement Proposal (EIP). This post will discuss the former.
Steem Proposal System (SPS)
This proposal has been written by the @blocktrades software development team with funding support from Steemit, Inc. and you can read the history of its development on the @blocktrades account here on Steem.
My general view has not changed since the development project was first announced, when I made this statement:
I’m not sure that this is needed since we already have two different reward pools where “workers” can promote their projects and seek rewards. Users have been doing it for 2.5 years. They can also solicit delegations (which has been done many times) and direct donations. If their projects are valued, people will support them...with their own stake, not socialize the costs.
Since the SPS was to be coded anyway and is now being discussed as a hard fork proposal, these are my thoughts on how it should be funded within the context of Steem protocols, followed by how I think it should ideally be funded.
Funding Via Steem Protocols
If the SPS is funded via blockchain protocols within our inflationary system, then I am in favor of the following:
1 - Eliminate “interest” paid for holding Steem Power.
This so-called “interest” that is paid to stakeholders via inflation to cover the dilution from inflation is nothing more than additional and unnecessary inflation itself. At 15% of the current inflation total, this would be more than what most people are asking for funding the SPS – which has been about 10% of annual inflation. Stakeholders would be much better served with a lower overall inflation percentage year-over-year. So eliminating the “interest” inflation that only partially compensates for inflation dilution anyway, and sending 33% of that (5% of the total) to the funding pool for the SPS would likely better serve stakeholders that seem to mostly be seeking profits via capital appreciation.
2 - Reduce witness rewards for the top-20 witnesses.
With recent changes to how databases can now store Steem blockchain data and the drastically reduced amount of RAM needed to operate nodes, operating costs should become much lower than they currently are, even as the blockchain scales. Due to these reduced costs, reducing the inflation and rewards to these witnesses should yield better outcomes if some of those rewards are redirected to useful development projects.
Our top witnesses should be involved in or supporting useful development projects anyway – or at least participating in the development and testing of new code and ensuring that the existing code remains secure – so they will still have an opportunity to see their account values grow, either directly from SPS funding or through added value to the blockchain and increasing STEEM prices, or both.
If these changes were adopted, current inflation would be changed as follows:
• 75% to authors/curators (no change)
• 15% to SP “interest” (10% interest eliminated, 5% directed to SPS)
• 10% to witnesses (top-20 rewards reduced, directed to SPS)
A total of 10% of annual inflation would be eliminated, bringing the total closer to ~8.5% in the next year.
Author and curation rewards would actually increase as a percentage of the total inflation pool. Depending on how the witness math works out, the new numbers could be closer to 80% for authors/curators, 12% for witnesses, and 8% for the SPS. The total amount of inflated tokens would be reduced, but the value of STEEM would hopefully increase, thereby offsetting any perceived losses.
Ideal SPS Funding
In my opinion, large-scale development projects (which is essentially the reason this system was proposed) should be funded by actual investors and donors. If you don’t have the technical expertise or the funding to develop your own project and nobody is willing to help you with work performed or money invested/donated, then this should be your first and biggest clue that perhaps you’re trying to build something that isn’t wanted or that will fail – or perhaps you’re just not good at pitching your ideas. In either case, the SPS won’t help you succeed and that failure should not come at the expense of investors and the rest of the community.
The SPS, as I mentioned four months ago, is a means of “socializing” the costs of development. What I mean by that is this, which I also wrote four months ago:
When grants of money can be given so easily to developers with little to no risk to any individual voter, chances are that accountability will be lacking for both the fund allocators and the developers. After all, it’s not their money that’s being spent. It’s the same problem we see with government and tax dollars. Are politicians rushing to give their own money to the state projects that they so proudly support with their rhetoric? Of course not. But they’ll certainly use that shared pool of cash that didn’t come out of their bank accounts...and they have no reason to make sure it’s well-spent either.
For three years we have seen rather large amounts of the shared and limited rewards pool going to “developers,” “projects,” and “initiatives” that have mostly produced nothing of value to anyone outside of this blockchain community – and very little value to the people in it. The rewards are carelessly thrown around because nobody has any actual ownership of them. Users and their projects are not vetted before receiving large, repeated upvotes.
In fact, it seems that the less details you have and the less you’re known around here, the bigger your rewards will be for claiming to be working on the next “killer dapp.” I would not expect this to change with further vote-based distribution from the same shared and limited rewards pool allocated by the same stakeholders in the community.
The best way to overcome this problem is to attract professional developers, businesses, and investors that can use the Steem blockchain’s advantageous features relative to most of the rest of the greater crypto community. I am not convinced at all that any funds directed to the SPS via the blockchain’s rewards pool will be allocated well enough to attract such people.
Steem has a peculiar proclivity to completely waste vast amounts of reward pool funds on a large variety of development that is neither necessary nor useful. And just as those rewards have been mostly allocated or otherwise influenced by our larger stakeholders, so too will the funds for this new SPS. Expecting this to change without also getting a change in the stakeholder landscape or the general behavior of users is like waiting for the next Sam Smith album to be great.
It’s just not going to happen.
Agree? Disagree? Indifferent? Tell me what you think!
VOTE FOR ME FOR STEEM WITNESS!
Agree.
Socialize the cost, privatize the profits. What can go wrong?
Even today a ton of substandard projects have no trouble getting all the funding they need on steem. Steemians are all too happy to throw their money on just about any project that shows up and promises some ROI.
Given the history of the projects that were funded and fled I don't see this proposal improving the situation. The problem we have here is not the lack of willing investors, the problem is the lack of good projects to invest in.
PS - If the SPS goes live, I've got a good first project for it. It involves magic and a small cube with each side having a different number of spots on it, ranging from one to six, thrown and used in gambling and other games involving chance.
Wow! That sounds like an interesting project!
Is there ROI? And will there be referral links?
Yuge ROI + referral links, fosho
Guess the number u r thinking of....
ohhhh man, you were so close, missed it by that much, try again, I am sure that you will get it in no time.
:)
😂
Posted using Partiko Android
I agree, we’re busy pushing Steem to sponsor some shit projects, which there’s no accountability at the end of the day because the working capital wasn’t their hard earned income.
I totally agree to your opinion.
Or they even abandon the steem blockchain and run with the money.
This is sad 😞
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Does the “interest inflation” mentioned even show up in block explorers? Or you just have to watch your SP and do the math and not post or vote for a while to see that inflation interest? I have seen people talk about this but I have never seen a noticeable difference in my SP when I don’t vote or post.
That "interest" is pretty negligible for most users. I would imagine that 99% of Steem users wouldn't notice this SP increase from day to day or even from week to week, and even with practically no activity.
I notice mine, but only because I occasionally watch it. Even with almost 50K SP, it isn't much "interest" for me. I'd rather cut the overall inflation rate, which is likely a much bigger deal in most people's minds.
Idk why any currency allocation would not show up in the block explorers... That in my opinion is somewhat ignorant and even dangerous (yeah it’s not a lot but) every single 0.001 of anything should be visible on-chain, not just “popping up” and we have to keep our eyes peeled and do math to see it... I agree, let’s get rid of it since it’s so small nobody even sees it.
I remember that once I saw the real-time counter but I can't remember who did it or where you can find it.
I think that on 80k I got around 4 steem a day.
That sounds accurate. In the mid-40s, I noticed several months ago that I was getting around 2 STEEM per day.
Nice to see you around. The sharp voice of steem.
Unfortunately, your opinions and suggestions are always unheard or overlooked although you're right most of the time.
When your steem is all delegated out (for the most part) does the interest go into those delegations? I always notice that, for example, when I delegate 100 SP somewhere, in a week it is like 100.123 SP delegated, etc
The interest will go into those delegations at the same percentage of your non-delegated stake. So, if you have 4000 SP and you delegate 1000 SP to a friend, you'll get 80% of the interest applied to your non-delegated stake and 20% applied to what you have delegated.
You still own all of it, regardless. It doesn't go to the delegatee's account.
Ok cool, thanks so much, it all makes so much more sense now!!
The economics of STEEM are way above my pay-grade. Then again; I do try to stay abreast of the direction in which the blockchain is going.
Thank you for sharing your insights. @sgt-dan has never considered himself a sheeple and is forever learning. This post has helped me to learn just a bit more of where STEEM is going.
So how about them D-Live and DrugWars? Woohoo!
I like it, as you point out it will never happen. But a very interesting perspective. I do agree the stakeholders and witnesses are getting away being ridiculous.
Your solution for the worker system is sensible and fair but it doesn't look like we're headed in that direction at all.
Asl far as economic improvements one of the goals is stated to discourage delegating and bid bots. As I check the accounts of many witnesses their SP is delegated.
I fear that my business model will be destroyed by the EIP. I reward good comments with an upvote in an attempt to increase engagement, I upvote my own post but give way more back in prizes on my contests and I don't use bid bots.
I'm very concerned about my future here as I have bought paid over $20,000 for SP based on a different economic system.
I honestly don't think that current earnings will be all that much different for people with our SP levels. What we may lose in post rewards we can make up in curation. There will be a period of time where things will seem to be in limbo and rewards will appear to be heading down, but I think they'll balance out.
This has been an issue since the beginning. I even made many remarks about this back in 2016. Changing economic protocols isn't good for recruiting investment. That's why we need very good rationale for doing so and we need to make sure that we get it right in as few changes as possible.
But right now, things are definitely broken. It would have been great if people had listened to sane voices before all of the protocols were changed in HFs 17-19. We could have avoided the last two years of absolute destruction of the economics and the social atmosphere here. A lot of these problems were predicted and the previous rationale for the previous code pointed out that, without the protocols originally chosen, we'd likely see exactly what we've seen. When some of us questioned the changes and asked for explanations, we were ignored or, worse yet, vilified and/or shunned.
It's extremely important that we get things right this time around and going forward from here. I'm not confident that HF21, as currently proposed, is the right move.
I'd prefer to not have the SPS right now. I don't think it's necessary. I don't believe that, if only we had a worker proposal system, Steem would be much better off than it is today. A lack of such a system isn't why things have gone downhill.
Pulling funding from content rewards as a whole while trying to improve incentives for stakeholding and curating is counter-intuitive. I don't know how these devs and witnesses can propose and seemingly be on board with this. It's just sheer ignorance/stupidity, in my opinion.
Meanwhile, we have too much STEEM on the market, an inflation rate that will continue growing the amount beyond any foreseeable demand, and now a new system is proposed that is meant to be used to pay for devleopment/marketing...which means those tokens will likely need to be sold at market prices.
I would much prefer to put off the SPS, eliminate SP "interest," reduce consensus witness rewards, and then go forward with the EIP. I think we'd see much more upward pressure on prices and a better overall experience on the platform for users (assuming anyone can get a user interface right around here).
I think most of the complaining about the EIP right now is a little absurd, given the state that Steem has been in for two years...when those protocols were changed for the worse. We need to get back to a place where we have more sound economic incentives and reward allocation. We need more baked in accountability and abuse mitigation, like we had previously. The EIP doesn't even resolve everything. It's just a first step. I'd prefer to see the delegation protocols deleted from the code, a change in the daily vote target (to 20 votes per day), and a few other rollbacks/improvements.
But I know none of that is going to happen. Maybe in another two years when I'll be vindicated again. If anyone is still around by then.
I absolutely agree.
this makes more sense than any of the other solutions I've seen and with impact on far fewer when the current level of interest received individually for most is barely noticeable.
A good deliberation of this concept, thanks alot for further explanation.