Steem Basic Income - A Complete Overview
Don't we all want to change the world? An extended introduction post (adjusted to keep information current with how it works now):
Steem Basic Income - Complete Overview
I have been very interested in the social experiments around Universal Basic Income.
img source pixabay
As I review the literature on Universal Basic Income, there are two basic questions that always come to mind.
What will pay for it?
How will the money be distributed?
I don't know what the final answers will be for basic income to happen at a societal or universal level, but is there any reason something like Steem couldn't be part of the answer?
The purpose of this project is to provide every Steemian with a basic income.
Sounds intriguing... How do I sign up?
Send 1 STEEM to @steembasicincome. Include the name of who you want to sponsor in the comments. You and the person you sponsor will each receive shares in the program.
Okay, so I signed up. Now what?
You and the person you sponsored will be added to the pool. Each member of the program will receive their Steem Basic Income through post upvotes. The total weekly vote strength available will be divided by the number of shares to determine the vote weight each share receives. Each member's weekly upvote weight will then be distributed to each of their posts, at a rate determined by their personal posting frequency.
A Waterfall of Sustainability
Imagine a beautiful stream of water running down a mountainside. It finds a hollow and fills it up, creating a pool. When that pool is filled, the water runs over the side and continues down the mountain. Maybe the path leads to a drop-off, and water sprays over the side, pouring down as a cascade, a waterfall. At its base, the waterfall carves out another pool and fills it with water, then continues to flow downhill. Maybe there are many pools, each filled with a rush of water from the pool before it, as the stream continues down the mountain, enriching the lives of all who see it and providing for those in the valley below.
img source pixabay
Imagine @steembasicincome as a pool of SP, spraying out basic income to all the members. The size and shape of the pool limit it to 400 members, but that doesn't limit @steembasicincome to 400. The SP bubbles over and starts to fill a second pool. New members come into the second pool (and occasionally promote to the first pool as spots become available).
Each member's total voting weight is based on the shares that they own, but distributed across their weekly posts. This ensures that weekly income delivered to each share is consistent for all members, without putting pressure on members to create content every day. Since some members are quite prolific, their voting weight for each post has drops below 0.50%.
When this happens, these members as automatically moved down to a lower pool so they can still receive upvotes. When their voting weight increases, either through less frequent posting, more shares, or bonus voting weight from upvoting @steembasicincome, they will be testing for advancement into a higher pool again, so long as the higher pool has spots available.
Growing your Steem Basic Income
These seem like small upvotes. Can I increase it?
There are several ways to increase your Steem Basic Income:
Upvote @steembasicinome regularly to increase the basic income that you receive
We regularly review the upvotes that @steembasicincome receives, over a 28 day period. The members that upvote the most consistently receive an increase in their voting weight. The curve is set at 28 upvotes (one upvote per day). With 28 full upvotes, voting weight will be increased by 100% (equivalent to having 2 shares for each share you actually have). This is adjusted by your upvote weight. If your average upvote were 90% instead, your basic income would only be increased by 90%. Another member with 21 full upvotes would receive a 75% increase (21/28 = 75%), but if that member gave 90% upvotes, their voting weight would only increase 67.5% (21/28 * .9 = 67.5%).
The maximum boost provided to any member is 100%. To get the best benefit, we recommend using steemvoter or something similar to not miss any update posts.
Sponsor more members into the pool.
Every time you sponsor a member, you will each receive 1 share. By sponsoring more members you can receive more shares. You can sponsor as many people as you like, or sponsor one person multiple times.
Delegation Bonus Shares
Existing members can receive bonus shares from delegation. For every 10 SP delegated to @steembasicincome, members will receive 1 bonus share. These bonus shares will be removed if the delegation is withdrawn. Currently each share receives a weekly voting weight of roughly 5.61%.
To simplify the tracking, all members should delegate to @steembasicincome. If the delegating member is not in pool 1, their delegation to @steembasicincome will be added to the delegation sent by @steembasicincome to the pool they are actually in.
These bonus shares will be counted before the bonus shares from upvoting @steembasicincome. So if you have 1 share, received 4 bonus shares from delegation of 100 SP, and then upvoted @steembasicincome regularly, you could potentially receive upvote weight equivalent to 10 shares instead of only 1!
Any Steemian that is already enrolled in @steembasicincome can delegate as much as they would like, to receive bonus shares. If you are not already a member but would like to delegate, please send an enrollment transaction to @steembasicincome and we will add your bonus shares at the time we process your enrollment.
We appreciate the members that take us up on this, and will provide updates highlighting our member-provided delegation, so that you will know who to thank.
Here are some Handy Delegation links:
I didn't get my income today. What happened?
You have to post to receive your income. We are also developing functionality to reward comments, but this might not be working yet. Some content may be blocked from receiving support. Please make sure that your post or comment is somewhere work appropriate. There could also be some issue with the bot. Please message @steembasicincome or @josephsavage for assistance.
Help! My reputation is under attack! Will that affect my income? @steembasicincome periodically reviews reputation of existing members. If your reputation suffers a sudden drop, we will review the underlying reason. You could be greylisted and not receive your basic income again for a while.
What if I don't usually post every day?
We would prefer to reward quality content. Since there needs to be something for us to upvote, you need to at least post sometimes. We regularly review posting frequency, and adjust the upvote weights for members accordingly.
Help! I was removed by @josephsavage and he refused to reinstate me!
If a user disagrees with an administrative decision to impose a temporary or permanent removal, there will be an appeal process. The offending user can choose a member from the recipient list (published periodically) and @josephsavage will choose 1 member. Those members will review the elements of the case and decide whether the removal should be reversed. (Appointed members may decline appointment). If they are unable to reach a consensus decision, they may each appoint 2 more members (total of 6), and the case can be decided by majority. If they are still unable to agree, the original ruling from @josephsavage is upheld by default.
This process may be revised, but any revision must be approved by a majority of voting members. A voting post would be published with the new proposed rules and a yes or no comment. The comment with the most member votes (not highest reward) will determine the outcome.
All rules are subject to change until there are members that have paid to sponsor and join. (At launch all members were sponsored and selected by @josephsavage). At that point, changes would need approved through the voting post process. Dissenting members that have sponsored others into the program will be fully or partially refunded if the total Basic Income they have received does not exceed 200% of their initial registration cost (1 Steem per share acquired through sponsoring another member). Sponsored shares (registration fee was paid by somebody else) are not eligible for refund for any reason.
Let's talk math
With the initial investments from @josephsavage, the program started out with 189 SP in voting power, and only 18 shares. That's over 18 SP per share, but it only cost 1 STEEM to add 2 shares. From the start, we knew that adding new members would dilute the existing members. The SP per share will approach the cost per share. (Essentially each member pays in advance for the upvotes they and the person they sponsor will receive.)
Effectively, this is the opposite of a ponzi scheme, as new members are benefitted by the investment already made by existing members, instead of existing members benefitting from the addition of new members. With this math, the incentive to sponsor members is to keep adding new shares for yourself (and provide basic support to other Steemians). (Dark Blue Line in the chart below)
Initially, we offset this disequilibrium by spending the STEEM from registration fees on 90-day delegation leasing. 1 STEEM buys 9 SP of delegation. This results in a higher equilibrium... predictably around 4.5 SP per share, as 1 STEEM buys 2 shares. Curation rewards from upvoting members posts are factored into this, and don't have a material impact on per share SP in the short term. (Orange line)
Since 4.5 SP per share confers a daily vote worth roughly 0.02 SP, it would allow each new member to at least recoup their initial spend before the delegation starts to expire.
After delegation starts to expire, there would still be a disequilibrium as delegation expires and SP/share would start to drop again. We called this growth dilution, and it's a very tricky problem. Creating a series of pools, where SP waterfalls from the first pool into each successive gives us a long-term solution to that problem.
The Waterfall Math
SP will start in @steembasicincome. As shares are assigned to the second pool (@sbi2), @steembasicincome will delegate to a target rate of 2 SP per share. In addition 25% of @steembasicincome's permanent (non-delegated) SP will be delegated to the second pool. As the SP grows for @steembasicincome, the SP will grow for @sbi2.
As new members come into pool 2, the enrollment fees will still be paid to @steembasicincome, but it will delegate new SP to pool 2, targeting 2 SP voting power per member, plus 25% of the permanent SP in pool 1. This keeps the growth dilution in pool 2 from bringing effective SP per share below 2 SP. That results in a slower investment recovery period, but provides the benefit of stable sustainability.
Effective SP per share will also be continually tested in pool 1 (@steembasicincome), to ensure that the delegation to @sbi2 does not lead to excessive growth dilution in @steembasicincome. @steembasicincome will continue to lease enough delegation to prevent effective SP from dropping below the new target levels - at least 0.50 effective SP more than @sbi2.
Any excess STEEM not needed for leasing delegation will be used for fixed-rate vote buying to maximize the permanent SP growth of the pools. (We have a great agreement with @earthnation-bot to receive a 5x return on fixed-rate vote buying, and they receive 1 bonus share for every 3 uses. We also use services that return 2-3x amount spent. We do not use bidding bots.)
These lower target levels allow the effective SP to settle to a more sustainable level that will keep growing from member upvotes and delegation, instead of relying on a continual cycle of leased delegation renewal. When pool 2 is starts to fill, it will spill over into pool 3, which will receive delegation from pool 1, targeting 2 SP voting power per share in pool 3, plus delegation from pool 2 representing 25% of its permanent SP. And so on . . . until every Steemian is swimming in Steem Basic Income!
We have known since before launch that there would be potential issues after the 90-day mark. We are clear about the income being small, and identified four ways of overcoming that:
- Upvote comments and posts from @steembasicincome to power up the votes.
- Sponsor more members into the pool. Every time you sponsor a member, you will each receive 1 share. By sponsoring more members you can receive more shares.
- Delegate SP to @steembasicincome. This increases the income for everyone. Thank you!
- Buy Steem. As Steem goes up, the value of your basic income increases.
The new Waterfall of Sustainability, with incentives for upvoting and providing delegation, has created a new dynamic that allows the permanent SP grow enough that we remove our dependence on leased delegation.
Since the limit of members can't actually reach infinity, the disequilibrium point only needs postponed until the rate of new enrollment drops below the growth from author and curation rewards. At that point, there will be a steady rise in the basic income that each member receives. The incentives provided to encourage member support through upvoting and delegation are currently allowing us to keep our effective SP per share above the target levels without new delegation leases. The longer we can go without having to lease new delegation, the more confident we can be that we have reached a sustainable equilibrium!
So basically this is a vote buying club? You pay upfront and agree to upvote posts which generates revenue for everyone in the club that will be shared by receiving upvotes on your posts?
This is an actual question I received. And here is my actual response:
You're essentially correct, but there are some differentiating features.
First, in order to get shares for yourself, you have to sponsor shares for somebody else. This creates a more diverse membership and encourages supporting people that might not have the liquid funds to join voting clubs.
Second, upvoting the posts made by the @steembasicincome account is not required, whereas for most voting clubs there is some requirement in that regard.
Finally, the upvotes are individually weighted for each member, based on typical weekly posting behavior, so it doesn't pressure members to publish when they wouldn't otherwise, just for their daily upvote.
If your philosophy is that individual posts should be rewarded, rather than individual members, than you are free to disagree and not participate.
Math often causes ventures to fall short of reality. We would love to provide a steadily rising basic income for everyone, but the money has to come from somewhere (just like with a universal basic income). In this case, the money has to come from people choosing to support it by sponsoring fellow Steemians and by upvoting it to grant it a greater share of the reward pool.
What if I hate this?
If you completely disagree with what we are doing, please feel free to move on. If you were sponsored by somebody else, and want nothing to do with it... please let us know, and your share will be deleted. Since you paid nothing, you won't get a refund, but we will grey-list you and allow future potential sponsors to choose somebody else instead.
This is the math-filled extended introduction, and we hope that you have stayed with us! If you read this whole article and are happy you joined (or were sponsored)... welcome to the party!! This complete overview is !originalworks from @steembasicincome, written by @josephsavage, but utilizing sections from previous updates.
As always, please let us know if you have any questions!