Should We Charge a 3% Premium for Powering Up?
I suspect that 99% of you (myself included) immediately thought 'no' the moment you read the title of this post. This may be a really bad idea, but for reasons I outline below - it might be worth considering. It might not be as bad of an idea as it sounds!
Powering up STEEM to Steem Power already has a premium. You must tie up your STEEM for 3 months. In a crypto market, liquidity is highly valuable. This is already a big deterrent from people powering up.
There is benefit to the network when users power up too, because liquidity removed from the market means reduced supply - which increases the price of STEEM. (We want more users to power up.)
Why then would we want to add an additional cost to powering up?
Because SP gives people power!
- Power to decide who gets rewarded.
- Power to downvote.
- Power to decide on witnesses.
SP also has financial value:
- Interest on powered up STEEM.
- Curation Rewards.
Why Charge a Premium?
- If the amount of STEEM that was powered up was significantly less than what it was today, then users who did have SP would have a lot more influence than what they have today.
- The interest payments and curation rewards for users who did have SP would be higher too.
- Users would need to look at whether a 3% premium (plus locking up their STEEM) is 'worth it' to have an effect on the network. Arguably these people are going to care more about the power they receive, since if they did not - they would not pay the premium.
- Users who wanted to power down an account in order to power up a new one - would now have a cost for doing so.
- Users who are powering down to see if the sell conditions are good to sell (and powering back up if they are not) would also now have a cost for doing so.
- Burning STEEM for the premium would reduce the supply, which increases the value for existing STEEM/SP holders.
- Often something that comes at a cost is actually valued more than something that is given away 'for free'. The fact that SP actually costs something, might actually increase its demand. This may seem counter-intuitive, but it has been known to happen.
The long-term effect of this would likely be a much smaller percentage of STEEM being locked into Steem Power, but the users who did power up would have a lot more power than they do today.
Is this a horrible idea, or something to think about?
What are your thoughts?
My dear Timcliff i love you but .....
I think this is a horrible idea.
Since the fork, SP has lost a lot of its appeal.
As you said, locking up SP already comes at great risk. We do want people to power up however, because decentralization is what will drive this platform. As such it is important that new users, when they get steem, want to power up and not cash out. We also want new investors to come in and buy steem and power it up.
That is the priority. Because this is what brings the platform forward and increases it's value. What you are proposing goes against this.
It is not about burning steem or finding ways to artificially reduce the supply. Instead we need to find reasons for people to join and stay engaged. Punishing them is not a good way to go about it.
But I love how you are seeking for new ideas and solutions, i just think this one is not your best idea so far.
What @kircky said.
Fair enough :) Appreciate your input!
Actually, the biggest thing I was going for when I started down this line of thought was to try and find a way to introduce a cost for people "switching accounts". There are a lot of reasons people do this (good and bad) but many of them are bad - such as getting out of an account that has a tarnished reputation.
@knircky I wrote an article about a growth hack for steemit and it is not pickig up steem as I had hoped. Maybe you can support it? That would mean a lot to me because I think it can really help Steemit.
https://steemit.com/steemit/@homosapiens/growth-hacking-for-steemit-how-we-can-reach-millions-with-simple-trick
i agree with this, we don't need additional hurdles for people powering up and vesting with the system.
even more so, we've just gone through a hard fork with big changes and so it's important for the rules of the game to stay fairly consistent for some time; fundamental parameter volatility can kill a system, but so can stagnation...ultimately, we want a balance between the flexibility to try new ideas and continuity of parameters so that the rules aren't fundamentally changing too frequently.
I think this in an interesting idea. While I understand the general consensus is to try to make SP more attractive and that this is against that, but what if this could be implemented as a replacement for one of the other difficult selling points of SP.
Right now the vesting period needs to be longer than the payout period to prevent voting abuse(voting with an account, powering down and repowering up and voting with another account on the same post). Implementing a fee to power up would combat this same type of abuse as repeated offenders would bleed through their SP faster than they could earn it back through the voting rewards. With the inflation protection of SP there would be some break even holding time, so the net effect would be similiar to the fixed power down schedule. The main difference with replacing the lock in period(3 months) with a fee would be that holders could powerdown instantly at any time without penalty, removing a large negative attribute of steem power and potentially allowing the markets to more efficiently find the price of steem.
Yes, exactly!
A solution to the 'switching accounts voting abuse' problem was one of the main things I was going for.
I didn't explicitly mention removing the 3 month power down period as part of the proposal, but it definitely becomes more of a possibility with a premium in place.
Appreciate the thoughts/feedback :)
I have to admit on first hearing I am not a fan of this idea but I will need to think about it more. Always good to have the discussion though and think outside the box.
It's good to have a discussion and kick around ideas almost any time, so it was a good read for me just for that alone.
Some things on here seem kinda..... out of whack overall. I am just not sure how to address them. I want this to work.
Thanks, I totally agree. I knew it would be an 'unpopular' idea, but after I mulled it around in my head for a while, I decided it would at least be worth discussing / considering.
Same! I know a lot of people do :) That is the main reason I think it will. We are still in the very early stages. I'm sure the Steemit of 2018 will be very different than what we see today, and I suspect it will be a lot better!
Oddly enough, when I saw your title name, in the post hence the main idea here, I did not immediately think it was bad. I must be learning something LOL.
:)
I think if it were being introduced from the beginning is one thing, but applied to an existing system it makes it harder for new members to gain influence.
That is true. If it were implemented, it would probably need to be applied to all the existing SP holders as well with a three month waiting period to allow anyone who was not ok with it to power down.
I thank you for your thoughts on this. Steem needs a lot more discussion about the balancing of its aspects. Steem is already way out of balance, where, now you have to grow from a plankton to a minnow before you can actually see results from voting. If we continue along this trajectory, newbies may be associated with molecules. (that need to grow to become plankton)
I do not feel a % premium is a good solution. It distorts things, and can become onerous if someone doesn't know what they are doing. I prefer the locking in mechanism.
We will see how it works out.
I have been working on the web for more than a year since I did not have money to invest, I have fallen on numerous pages with promises of payments and it will be surprising how many companies did not pay my work, worked more than 14 hours a day and visited about 100 companies a day All but 4 the rest has defamed me.
Hayer wanted to change Paypay dollars and buy bitcoin the fee was 10%.
Others a little less peron with a higher risk.
Today we work with 5 companies including Steemit, Clixsense, Neobux and two other bitcoin companies.
Steemit and the people who work for me are helping in a huge way economically, I am very grateful for that.
I'm in favor of the platform, if I have to support with a canon I totally agree, I do not care what the% of the canon was.
The money does not spare me, on the contrary, I lack, but I do not want to kill the golden egg hen.
I speak for myself and my reality of what I lived this last year.
Thank you very much Mr. @timcliff for asking
Appreciate your input @jlufer! :)
I would suggest the opposite... Get bonus SP as more as you power up.
Perhaps a less radical idea would be to recognize that
and take away the financial subsidy (vesting rewards) for powering up. People will power up anyway if they want the power.
This also has the advantage of being aligned with the power in terms of timescale. A one time fee favors people who power up for long periods of time, but from the network perspective Alice powering up for a year and Alice powering up for six months followed by Alice powering down and Bob powering up for the next six months are equivalent.
Agreed. I'm not opposed, although I suspect it would get a lot of opposition. (So would charging a premium.)
The one thing that I really like about the premium though is that it would start costing people to switch accounts. Most of the reasons that I can think of for people to do this seem like things that are not in the network's best interest.
True, but was Bob going to power up anyway?
Let's say hypothetically Alice and Bob are independent actors (and this is independent of the Alice in the first case; I should have used a different name). With a 3% fee, both Alice and Bob in the second example may decide that powering up is too expensive/risky (since it costs them twice as much for the power they get) and take their capital elsewhere. Imposing a fee is similar in a lot of ways to imposing a longer power down period. The logic of the recent HF16 is that causes more harm than it is worth (of course nobody really knows for sure). This applies equally to your other comment about moving stake.
They could just keep it as liquid SP too.
Agreed.
True, and this would go in the opposite direction.
The idea that all liquid STEEM is STEEM that is about to be sold is definitely not true anymore. I am not 100% convinced that encouraging users to power up just for the sake of removing liquid STEEM from the market is as valuble as it used to be.
With the reduced inflation, holding STEEM as liquid STEEM is no longer as much of a "hot potato". It is reasonable for people to actually buy and hold liquid STEEM as an investment asset.
This change would basically move the network/economy to a state where users who are powered up are powered up because of the value that it offers, and less because it is "the way" to invest in STEEM.
This post has been ranked within the top 10 most undervalued posts in the second half of Dec 28. We estimate that this post is undervalued by $25.15 as compared to a scenario in which every voter had an equal say.
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