Decentralized cats and stake locked investment into development

One of the benefits of being a small startup company is the lack or bureaucracy and hierarchy that allows for ideas to be introduced, considered and implemented much faster than its larger, traditional counterparts. Speed of decision is a competitive advantage if used well with quality of decision often tempered by a common plan. The problem in what is essentially an opt-in, voluntary community that is decentralized is that there is no general goal and therefore, with people being people in a largely anonymous environment with maximization goals, common agreement is near impossible.

Rather than having the ability to outperform the centralized organizations by having individual responsibility, a lack of common agreement on even rudimentary decisions take near an eternity to make, if made at all. The problem in such a large and diverse group of people who all have some kind of decision power and have no requirement to provide value input directly is that the opportunity for extraction far outweighs input. People talk about being able to get rid of governments and self-funding but, it isn't so easy, as we can witness on Steem.

I had the pleasure at SteemFest of having a couple hours talking in the back of a bus with a very bright guy, @cryptoctopus, and we had the opportunity to discuss many things, both Steem and life orientated. While we spoke and he held his gorgeous little daughter, he reminded me why I am so positive about Steem, people like him, family, vision and hopes for the future that he is actively working toward. check out @tokenbb for one of his projects.

As things tend to get sometimes, the conversation wandered through the practical and philosophical fields and considering our activity for the day, a visit to Auschwitz, life and the organisation of society came into it heavily. We were talking about group narratives and he said, in the US there is the common thread of freedom and independence that holds the group together, an accepted value. He asked, so what is it in Europe, how can such a diverse group of cultures, languages and identities choose to work together?

This was on the return trip to Krakow and my answer was that it lay behind us. The common thread that holds Europe together is a story of horror on scales never before seen and caused by fragmentation and economic inequalities. Auschwitz itself was a place of narrow optimization and maximization of resources of the most terrible kind. The narrative that underlies the EU is one of, never again. Of course, those who forget the past are destined to repeat it.

Steem is far from comparable to a holocaust, world war, 70 million dead but, it is facing adversity of various kinds, as well as economic hardship. An unfriendly market, a wide range of individual and group desires that conflict against even themselves, coupled with an unwillingness to give real input, be charitable listeners, understanding of errors and reduce the pettiness and blame to get to work on what can be done. Instead, people look for easy scapegoats, anyone but them.

The challenge in a community of communities such as this is finding the binding agent that brings enough active and invested people together to work in earnest at developing solution to the problems at hand, that all here have their fate in to some degree. While most of the platform can just walk away without significant loss, there is very little reason for them to come together. For most users of this platform, Steem life is cheap. But not for all.

There are people who have their lives here, that are truly invested. @gtg, the top witness has never powered down, a show of faith or, actual belief that Steem is worth investing into? I spoke with him too, he is another smart person, dedicated and patiently continuing this work for a community plagued with issues. He isn't blind from a long shot to the challenges faced.

There are people here who have given so much of themselves and continue to do so, day in and day out, through highest highs and lowest lows. We aren't at 6 cents yet and most here now won't be either, they will leave well before that point. Not all will leave though.

It is funny, people want to live in freedom on Steem while expecting others to take care of their needs and unwilling to put anything into the development of the ecosystem at all. Yes, I know that your content has value but if you aren't leveraging some of that value to support the development of infrastructure willingly during development stages, would you rather a tax? Tax is a dirty word around here isn't it?

Remember that this is a volunteer community but still has infrastructure costs yet, if people don't 'make enough' or are asked to 'provide value', they run off to the next platform, the next get rich scheme. Anything to avoid the responsibility and costs of a community.

Again, I am going to mention creating a passive investor class but this time with some more variables to consider.

Basic plan is:

Lock stake for a 100% return on the investment every day. That means the locked investment would be paid 10x the vote value on a 2.4 hour schedule to maximize.

However, these people are investors aren't they? They have to invest into the project, not just the coin. This means that an investor needs to be able to add value that can be drawn upon for development purposes, especially in times of need but more importantly, so times of need are largely avoided.

Potential options

• 90-95% return instead of 100 with the difference going into a tracked stake slush fund to be drawn upon for development purposes. Potentially at some point, the balance can be redistributed to contributors when no longer required.

• 100% return but on locked stake there is no interest payments. Currently 19% of the pool is paid in interest, ~5 million Steem. At current prices, that is about 1.7 million dollars paid in interest per year. If 50% of the stake is locked, that will give about 825,000 dollars in a year.

• Potentially have a minimum cap for stake lock down to a certain level. For example, minimum SP needed is 1000 SP so a 1500 SP account can lock 500. This can encourage buy in, powering up and smaller investors whilst discouraging small maximizers. Just as an example number, it could be higher or lower.

Having a community stake backed fund means it could be immediately drawn upon to cover projects like @blocktrades' proposal for RocksBB to get started. Witnesses and a group of independent developers could agree on project development and scopes as well as value with a high degree of transparency minus the trade secret operations.

We often talk about investors and self-funding but due to maximization of stake practices, it is difficult to get all of the cats into the one room, agree and then also ask the community to buy in and finance it. Previously Steemit Inc has been covering a lot of these costs but that is unsustainable as well as contrary to a decentralized community.

Adding an investment layer that provides immediate return but is also funding the development makes the entire project both more stable and viable from a cost and resource allocation standpoint. Normal investors into startups have zero chance of immediate return and would have to wait years while their investment faces risk. This way they are able to get immediate return plus can be part of direct development at various levels of the process. Many will actually be the developers and application owners themselves who are using their own stake to fund their projects anyway.

This means that we can secure blockchain development firstly and then use the same model to community empower the applications upon it to grow sustainably under a host of other options possible later. For essentially a low barrier, investors into the blockchain will lower their ROI slightly but benefit massively on potential project success in the future by actively participating in the investment / development cycles.

The problem with this would still be that people would have to agree that development and viability of the blockchain is more important than immediate maximization of coin ROI, and while there will be many users who will opt out of stake locking so they can continue to use the blockchain as they choose, there will also be many investors who will buy, lock stake and still take a higher return than a bidbot can offer them. The difference is that the profits would go to development instead of narrow but deep pockets.

If what we need is a common narrative to pull a community of maximizers together, lets do it at an investment layer first that provides the capabilities to stabilize and finance viability and growth. Set up an attractive investment model that pushes for buy-in into the community, not just the coin in the hope demand will increase organically. For the demand Steem needs, investment into the infrastructure development is necessary but most in the community are unwilling to directly do so because of instability and risk. It is a catch-22 situation.

Turn the Steem story from profits to sustainability, maximization to community. Adversity is the perfect time to be ripped apart or come together but with nothing tying people here, why would they stay? People keep saying "stake is your voice" and tying this to investment and development makes it true. With a voice of influence, comes responsibility of action.

Just some thoughts and options for further discussion.

Taraz
[ a Steem original ]