HF-21: The Question of Untouchability of Witness Share from Reward Pool
HF-21 Testnet
These are very exciting times for Steem blockchain. With the release of Testnet for Hard Fork - 21, all the discussions surrounding SPS (Steem Proposal System), EIP (Economic Improvement Proposal) including curation curve, author-curator reward split, dedicated downvote pool etc. are nearing conclusion and are reaching an implementation stage.
Controlling spam and abuse
Last Hard Fork Velocity (HF-20) was successful in reducing comment spam to a large extent with introduction of RC & Mana requirements for every transaction / activity. This Hard Fork is expected to reduce the spam and abuse further, esp. the abuse of trending feed and excessive use of voting bidbots by creation of a separate downvote pool that won't cost us any Mana or voting power. Curation reward curve is also being changed to convergent linear - a mix of earlier super-linear (n^3) and currently linear (n^2) curve.
Author-Curator reward split is being proposed to change from the current 75%-25% to 50%-50%. This will also discourage the spam or low quality content creators to post unnecessary content and encourage them to put their efforts in curation instead. Obviously, there should be more content-consumers to appreciate the quality content being posted than just content-creators! Opportunity to generate passive curation income may also lure in some serious investors to Steem ecosystem.
Although all these are very experimental and will take us some time to see how it works and what other problems it brings, the best part of this Hard Fork is SPS.
SPS - Steem Proposal System (aka Steem DAO)
Yes, with SPS in place, anyone from community can suggest or propose any viable idea in the interest of Steem blockchain and if it's voted up by the community, it will be granted necessary funds for its execution. This is going to decentralize the development process and will take the blockchain in the direction what community thinks is best for it.
Let's say e.g. we all need Keychain browser extension for desktops to release a mobile compatible version. But its developers don't have sufficient resources or motivation for the same. But if adequate funds are allocated to this project through approval by SPS, it can see the light of the day soon.
Many such small and large projects need to be undertaken to expedite the development on Steem blockchain. So this HF-21 proposes to allocate 10% of the reward pool for SPS on a regular basis as a sustainable funding source towards it.
Funding of SPS:
Won't Witnesses benefit from SPS?
Well, it all sounds good. Of course, without a sustainable funding stream, SPS becomes meaningless. But the problem is that this 10% reward share isn't being taken out of the entire inflation pool but only from the 75% reward pool share that belongs to Authors and Curators. Now, I don't get the logic for it!
Current reward pool distribution created from Steem inflation is distributed as:
Authors & Curators: 75%
Witnesses: 10%
Interest: 15%
Proposed distribution is:
Authors & Curators: 65%
Steem Proposal System (SPS): 10%
Witnesses: 10%
Interest: 15%
I wonder why only Authors' & Curators' component is being sacrificed in favour of SPS!
Is any benefit derived from SPS going to affect only Authors & Curators?
Why existing Witness component has been left untouched?
I know, Witnesses have been going through a tough time due to low market price of STEEM but so are Authors & Curators too.
In fact, with the recent development from STINC, the release of MIRA has drastically brought down the cost of running a node. According to @steemitblog post:
Thanks to MIRA, we have been able to reduce the amount of RAM being used in our Steem node by 50% and nVME usage by 100%!
So why can't Witnesses part with their share of reward pool proportionately?
It reminds me of the classic case of salary hike of Members of Parliament in India. Although they are all elected representatives, whenever a bill to revise the salary and pension of MPs is presented, it is passed unanimously without any debate on it. Their entire salary and emoluments including basic salary, daily allowance, constituency allowance, office expenses, other allowances and facilities are increased as much as 3 to 4 times in one go. And this is done quite frequently. E.g. in a 5 year period from 2010 to 2015, the Salary, Allowance and Pension Act, 1954 had been amended as many as 27 times. Similarly the US Congress and German Bundestag determine their own salaries.
But this is Steem with a DPoS mechanism and not a democratic country where elections are held only once in 4 or 5 year period. Here on Steem, we can vote and unvote any of our Witness within 3 seconds.
So why is that we all are supporting zero reward pool cut from the existing share of Witnesses?
- Is there some argument in favour of them?
Do explain (or point) it to me too!
Thanks!
Good write up ...
Note that the MIRA reductions are mostly applicable in the case of full nodes. For normal witness operations there isn't much of a cost saving. Lets say in my case I run a primary and secondary and no full nodes. I am not going to see much of an impact unless I choose to run a full node as well.
Yes, i think your are correct but point raised by @xyzashu is wrong or right. I personally think that the point raised in post is very true. The witnesses has more responsibility then a normal steemians, they have to take it. Like their share will also reduce by 20% to 30%, and by SPS witness will be get benefit more because they can more technical then others (in most of the cases). So, they will get major share from SPS pool.
Thanks for your feedback! I get what you're saying. In case of witnesses like you, there may be increase in replay time with implementation of MIRA. However, I don't understand much of technicalities, I do hope, going forward, this problem too will be taken care of.
Cost reduction is an added benefit I was pointing to but imho, the inclusion of share from witness reward pool for SPS should be irrespective of any cost reduction benefit.
Yet you have no problem implying that technical improvements have reduced the costs for witnesses.
The change in rewards structures reflects a gradual shift away from content rewards as the only use case for Steem. The importance of content creation may have decreased, but the importance of witnessing securing the blockchain most certainly has not.
Do you want your community to have less security in order to spend a similar budget on community improvements? The types of things the SPS supports are already coming out of content rewards, they just have to do funding drives and raise upvotes now.
This will make it more explicit... and could potentially increase content rewards granted to normal content creators, as projects attempting to self-fund via upvotes will be met with skepticism for asking for upvote funding instead of using SPS system...
Yesss! And I've also quoted the source in my post which helps me infer that.
This is what this SPS is doing ....decreasing the importance of author & curation rewards over witness rewards. There is no doubt that securing blockchain is important but that has always been important and there is no reason to believe that its importance has increased. How do you assume that decreasing the proportionate witness reward share in favour of SPS will make blockchain less secure? Do you know how many witness servers are functional at this moment? Is there been an increase in number of witnesses or decrease with time? I don't think there will be a dearth of witnesses because of this decrease in witness reward share.
Neither has this issue of lack of witness rewards been debated when considering SPS funding sources. May be, you can reason that even after SPS, 10% witness reward isn't sufficient to secure the blockchain. Everyone will assign / expect a different value. But when there won't be sufficient witnesses to run a witness server, this issue will become more important.
Rewarding content creators and curators has been a unique proposition of Steem blockchain that differentiates it with other blockchains. So its importance can never be undermined. All other use cases are just incidental to it and not the focus of this blockchian. Core vision of Steem should not be confused with. @bobinson too has pointed out that the direction of the platform is changing a bit. We all are seeing that. But we need to protect its core value to protect the USP of this blockchian while simultaneously supporting other use cases to some extent. Is there any denying that Steem is a social media experiment? Are we done with it?
I can understand that witness servers are receiving increased traffic because of several dapps. But as per white paper, more acceptance and usage of STEEM will result in increase in its value. Thus reduction in witness reward share doesn't imply reduction in witness reward per se.
Not only increased transactions will bring more value to STEEM but successful completion of several projects from SPS too will bring value to STEEM. And everyone is going to benefit from this value addition, including witnesses.
Its going to be very difficult to optimize MIRA further.
On taking the reward share from the witnesses, I think its very difficult to gain traction. Steem as a platform is becoming home for many dApps with SMTs I feel the content generation will greatly give way to applications like drugwars, steemhunt etc. ie the rewards are not going to be only for creating unique content and also for "interacting and engagement". So my take is the direction of the platform is changing a bit and the witness servers will see further traffic from the increased operations. I feel this is the ultimate goal behind the change in reward behavior and reason for keeping the pool for witnesses untouched.
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Witnesses will preach all day about how they're struggling only making a pittance because of low steem prices etc. But the top 100, if you take into account how much they made when steem prices were high, and how much a lot of them make from behind the scenes activities (like running bidbots), have made very decent returns when taken over the life time of their witness activities.
Meanwhile, high level content creators across steem, can only get an illusion of payout on their posts by paying for them. Apart, from the lucky few circle jerkers.
What you point out in this post is spot on, wtf has happened?
They sneaked this through without opening it up to the community to decide. There was a dpoll about 3 months ago about this where it was clear that the majority wanted the proposal system to come from donations, or at the very worst from inflation across the board. The fact that it's only coming from content/curation % of inflation, means they have just gone ahead and made the decision behind closed doors in the witness discord.
Is that decentralisation? Not sure really 😉