What Next for the Bidbot and Vote-Buying Markets?

A quick look at Steem Bot Tracker will show a languishing market, with many bidbot cycles ending with zero bids.

The Bidbots have always had to please two masters: the delegators and the bidders.

Recent developments have tilted towards the delegators, with many bots having a small window of ROI, often between -10% and +10%. Not really much fun gambling on a bidbot when one can get a guaranteed ROI from other upvote sellers that are not bid-based. This situation was true a few weeks ago but suddenly the situation has become much worse.

The delegators now need the bidders!

Two things have happened in the past couple of weeks: the SBD price has fallen sharply (as has STEEM, but the SBD price has had more of an effect on payouts; and at the same time, the SBD print rate has dropped quite sharply, now standing at 36% - this is a further drop of 3% in just the last 2 hours. You can see the SBD print rate at the bottom of the right-hand column on steemd.com.

My own calculations this week for MAP Rewarder have shown that the actual payouts of pending rewards are currently yielding just about 15% APR (calculated as STEEM per SP). This has been a sudden drop from about 20%. The APRs in the delegation markets have also fallen.

Firstly, this is just the nature of the market - it is volatile, and probably always will be - but there is also a simple solution that, at least for the bidbots, can redress the balance between delegators and bidders.

This is to include the SBD print rate in the calculations that estimate the final payouts based on the amount paid for an upvote. This is true for both bid-based and non-bid-based upvoting services.

For example, am glad to see that SmartSteem has included the SBD print rate in their calculations for their upvote service and their bidbot. Thanks to @therealwolf for letting me know that he uses a bespoke algorithm and is not dependent on the postpromoter software.

Those bidbots who use the postpromoter software, should also look at adding this to their algorithm. I have to admit that, as SBD is currently priced at almost exactly $1, the difference is small and hence I can no longer tell from looking at just the numbers on Steem Bot Tracker. However, it has made a big difference in the past two weeks, and will make a difference once SBD deviates from the $1 price. If this has been already implemented, then that's great! However, I feel that users need to be made aware of the changes so that the upvotes make sense in terms of the overall ecosystem.

This is not the place to argue for or against the use of vote-buying services; this is here to look at how the market has changed and the mathematical changes needed in certain algorithms so that the market remains balanced between bidders and delegators and the service providers.

We have seen sudden shifts before - users sometimes just need to adjust their expectations.

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@rycharde manages the AAKOM project and the MAP project.