RE: Revisiting Curation Reward: Hot Coffee, Cold Coffee, and Lukewarm Coffee
What will be the annual return for the "investor rewards?" What are the estimated losses from users who will likely power down if the "investor rewards" cannot compete with the rewards from good curation? Why should users favor this plan if they cannot earn more than the (presumably) relatively low amount of return on their investment?
With a model that has no revenue and instead relies on "paying" users/investors through inflation of the currency, what purpose does payment serve for those not actively performing any "work" on the platform? (Currently, those who create content and those who discover/evaluate the content and allocate the daily pool are rewarded for their work. Both actions are vital to the platform and the latter incentivizes holding SP.) What value is added when users instead do nothing and the currency is inflated to pay them for doing nothing?
And I would also like to dispel this notion that more bots are a result of chasing curation rewards. That's actually not accurate. Automation increases when the human time element becomes too costly - or in other words, when the potential profit is too low to justify the time spent on curating. As curation rewards decline, less humans spend the same amount of time curating.
So, the answer is not to eliminate curation rewards in order to increase the quality of curating. You're likely to just get less overall curation and probably a lower quality. Not to mention less investment in SP from people who believe that they can beat the fixed returns from an "investor reward." Most of those users will likely power down, which, in turn, will likely result in less demand for STEEM and a lower price for the currency.
The answer isn't to eliminate incentives. I really don't know why this is being touted as a viable option. Numerous users have already stated what they would do if curation rewards are eliminated. Yet so many people still believe the exact opposite will happen. Why is that?
@ats-david I think you are correct. How does this proposal address the problem of getting new users and retaining them? It doesn't. What I think it is a power play to reduce the influence of the whales.
My opinion is that most users don't post, therefore curation is the only way for them to try and make some money. Then run into the round-down in payout. Zero payout. If you give me some model that allows a decent chance for new users to make a little money that will go a long way to acquiring and keeping users.
It switches incentives from voting to locking SP and giving up being infliential. The APR varies by the ratio between curators and investors.
Is there no starting point for the APR? A best guess?
Rough calculation (possibly wrong): if 50% of current voters become the investor class and the curation rewards becomes investor's reward, 2.5%. If we want to keep the similar reward level, we need to double it (author : investor = 6 : 4)
So, you really expect people to not curate so that they can earn 2.5% instead of the 10-30% that can be achieved now through curation?
It would help if you stated what these different percentages represent.
Current curation reward level I used is about 3%.
9.5% * 75% * 20% (data from steemdb) * 100%/50% (24h active stake percentage)