RE: Why You Shouldn't Criticize Liquidity Monopolists: Liquidity Is More Important Than Spread - It Gives Steem Value!
Ignoring the problem won't make it go away. STEEM is hemorrhaging 26+ million dollars a year on a liquidity incentive system that doesn't work.
Brushing off all criticism of the liquidity incentives on the basis that the antagonists are jealous and want the incentive rewards for themselves is silly. I don't want the 1200 STEEM a hour, all I want is for the flaw to be fixed. No, they are not providing useful enough liquidity for the amount STEEM is paying ($3,756 USD per hour, $90,144 USD per day, $631,008 per week, $2,208,528 per month, or $26,502,336 per year). The spreads are huge and the "useful" liquidity amounts to very little.
You need to understand that SP/STEEM stakeholders are paying a few people 26+ million a year for these liquidity incentives in the form of debasement, and they aren't even doing a good job. Tell me... in the real world... what job exists where it is okay not to do a good job, yet you still get paid millions? There are only a few people getting a share of the 26+ million a year... for providing a crappy service. There are wide spreads and there is low market depth unless you look a large percentage away from the peg.
Liquidity providers work for us (SP/STEEM stakeholders.) They are doing a bad job, and we need to like any other business on the planet would and fire them. Liquidity incentives are and will always be game-able, no matter what parameter is tweaked or added. We need to do away with liquidity incentives all together and implement something better... autonomous liquidity with tighter spreads. Sadly, your post encouraging this madness is getting more than my solution to the madness. I can't even...
I feel like this argument isn't altogether honest. People haven't been appointed. They earn the rewards because they trade the largest sums in Steem/SD as market makers. Otherwise they'd get replaced by those who could essentially stake larger sums.
Secondly, with this autonomous fund, you risk spending more than with liquidity rebates, which is why liquidity rebates exist. In practice, in some periods that may not be the case but that's a very credible risk.
Assuming no wash trades, in one case you are paying someone 1200 each time he provides liquidity, in the other case you are paying someone (the autonomous maker) 1200 regardless.
Assuming wash trades, wash trades can't carry on all day without providing at least some liquidity, given that limit orders will be placed by agents other than the market makers, so you would still be paying less than the agent who is receiving 1200 Steem an hour regardless.
Why? Because you'd be paying for the liquidity they provide, rather than just paying to equip them with the tools to provide liquidity.
Satanic price)
hahaha
I feel like my criticism is indeed honest. It doesn't matter if they were appointed or not, either way it is a huge waste of money. Sure, there is some liquidity being provided, but it is not largely "useful" liquidity (a decent amount of liquidity close to the price feed).
As to your other point, you misunderstand how my proposal would work. Any liquidity incentive scheme you could come up with will cost stakeholders 100% more STEEM than my proposal. Read what I wrote here, that should clear it up... not all dilution is created equally:
Oops, didn't read that part.
That's a pretty good idea, and I would endorse it actually.