Proposed Changes & Curation Rewards
We have talked a lot about curation rewards over the past week. Our team has dug deep into the issue and concluded that we want to make relatively few changes to what exists today. The purpose of this post is to explain our reasoning for not changing much.
What is fair for Curation Rewards?
At first glance it might seem unreasonable to pay curators as much as authors. After all, the author did much more work for the money than the curator did. If you adopt this perspective it will likely leave you feeling the system is unjust. I would like to offer a new perspective that makes this all seem much more fair.
As a community we don't have any way to create money, just the ability to redistribute ownership. So let's take a moment to consider a world where the market capitalization of Steem remans constant. Let's also assume everyone contributes to Steem proportional to how much Steem they own. Under this model everyone will end up owning the same percentage of Steem. It is a zero sum game so long as everyone participates equally.
Equal Participation
One way of ensuring everyone participates equally is to have everyone curate, everyone write, and everyone provide liquidity. If you divide your efforts proportionally between these tasks then you will maintain your percentage ownership. If you neglect one of these tasks (such as writing), then you will have to make up for that by performing other work (such as curating or liquidity provision).
What matters is not the amount of money Steem pays for each of these tasks, but the ratio between them.
Steem forces everyone to be active proportional to their stake in order to maintain their stake. So it doesn't matter what the curation rewards are other than that everyone needs to be equally active. The 'whales' will earn a large percent of curation rewards, but it will be proportional to their stake. In other words whether you are 'rich' or 'poor' average participation will help your account maintain its percentage stake in the community.
Passive Users
Users who do not write, curate, or provide liquidity lose stake at 5% per year (assuming they hold Steem Power). Those who do not commit lose 50% per year. A doubling of the supply means the old stakeholders have 50% and the new stakeholders have 50%. 10% of the new stake was given to content creators, curators, and liquidity providers which amounts to 5% of the total at the end of the year.
Moral of the Story
If everyone carries their weight proportional to their Steem then this Steem Ship can move forward without any wealth redistribution. Anyone who is a 'rent seeker' looking to profit on the backs of those who are doing work will see their stake shrink in percentage terms. As we all move this thing forward the value of the 'pie' grows.
Think in terms of Rate of Return
Whether you have a lot or a little Steem Power the rate of return you earn by being an average curator is constant. Based on this there is no need to worry about how much individuals are being paid in absolute terms. If you only have a small amount of Steem, then you will earn a small amount curating. If you have a lot of Steem you earn more curating.
You can think of the curation rewards as 'interest' that you earn on your Steem Power, but you can only earn the 'interest' if you participate. If you have $3 in the bank, and the bank says they will pay you 10% interest if you work 1 hour per day then it might not make sense. On the other hand, if you have $3 million dollars in the bank then earning 10% interest for working 1 hour per day makes perfect sense.
What this means is that anyone who plans on spending a significant amount of time reading and voting will do well to buy more Steem Power to maximize your ability to earn interest.
Authors who produce content can earn income regardless of how much Steem Power they have. The curators award it to them. While an author can increase the income from their own work by self-voting, it really doesn't matter how much Steem Power an author starts with.
Small Changes
After much review we propose to make the following small changes:
- voting power will regenerate over 5 days rather than 24 hours.
- voting power will be consumed 10 times slower.
- voting power will regenerate at a constant rate rather than depending upon how low your power is.
The purpose of these changes is to smooth out the difference between a user's voting power in the morning vs the evening and make it less important for voters to consider the time and/or order in which they vote for content. It also encourages voters to vote on twice as much each week. Lastly, those who vote more often no longer have any mathematical advantage over those who vote less often. Someone who votes exactly once every 36 minutes (the time it takes to regenerate to full power after 1 vote) will maximize the rewards they allocate. If you vote less often than this then each vote will have its maximum weight, but your account will not be exercising its full potential.
If you vote more often than this then your voting power will be spread thinner over more posts. Due to the 5 day averaging there will no longer be a significant difference between voting on 4 things in a row and spacing it out. Hopefully this will mean people can "stop thinking" and just start using the platform.
What about the Bots
If someone is smart enough to setup a bot that can curate for them then that means they are paying for a server to do the job of voting and maintaining their stake. The bots will have a speed advantage, but they will also have an intelligence disadvantage. As the system grows people will have to find ways to add more value than the bots can. This likely means starting a reliable, predictable, blog that the bots can start following.
The organic process appears to be working so let's not make major changes at this point in time.
well you failed to find the main problem - "Steem whales are not the best curators"... so Good Luck
I DID try to offer reasonable solution here
https://steemit.com/steem/@james-show/steem-the-solution-to-curation-rewards
, but it takes time... probably another platform even.
who decide who are the best curator? I will be earning all my steempower through content creation. That doesn't guarantee that I am going to be a good curator.
That's just what his suggestion tries to solve, give curation power depending on previous curation success. Too big of a change to "just do" though, this'd change the whole thing.
I like the changes that @dantheman propose, they are on the right direction.
The only problem that remains now is that the average users have to little power to make any difference with their votes .... so...
THE PROBLEM IS NOT THE POWER OF WHALES
THE PROBLEM IS THAT THE MAJORITY OF USERS/CURATORS ARE POWERLESS
we should give de-facto more power to proven active unique users/individuals!
We should give more power to the Voter as a person like in Democracy. If we let it like this, it means we assume that the best curators are only the rich user's in our platform.
WARNING!
I don't say the users stake (risk) should not play a major role! I just say we must take a little more into account the VOTE itself...
Reddit takes it 100% into account... I don't say we should do the same, but we could take it 50% into account and the other 50% keeps Steem Power into account (like before but half)...
Please see my reply to tinfoilfedora above.
Users being powerless really isn't the problem. Power through numbers!
Whales can be a problem right now when they don't act reasonable, but all I can see is they're doing a great job. Over time, their power will go down relative to the rest. This won't mean that the others' votes are worth more then! Only that there'll be a lot more others.
Please post the math on your "Power through numbers!" assumption. How many users will it take to give 1 cent.
This is not really true and will be less true once rewards pay out. Even most non-star users will start getting some rewards from comments and posts. That will boost their Steem power. Even now, the power of entry-level users is not as small as it appears. You can't by yourself take a new post from 0 to 0.01 (and in a sense this is good for brand new free account because those are exactly the sock-puppet type accounts you want to have minimal influence) but if there are already votes then adding your vote does matter.
but if they only vote (curate) and don't post and comment?
In that case there will still be some small payoffs, but only when you vote on very popular posts along with other people (especially when you are early), not just voting for a post yourself. In other words, good wisdom-of-the-crowd curation. Leave lone-wolfing to the whales (and even for them it isn't a good approach). There is also the opportunity to see those with more SP earning more for doing the same thing you are and consider buying some.
If this system gets big enough whales will probably hire teams of the best curators (in reality this probably includes a combination of humans an bots working together). So indeed whales will in fact be the best curators.
If you are a whale and don't curate well you will have a sub-par ROI and lose value. So you will likely either improve your curation, sell your stake and invest in something that doesn't require you to do something you aren't good at, or, eventually, lose it all.
On the other side, some will curate well and by virtue of getting an above-par ROI, become whales. Someone will be the Warren Buffet of Steem curation.
I didn't see major curation mishaps so far, did you?
I hate what you guys curate. JK. The more you have to lose the more you should have the potential to gain and the more you have to lose the more you'll want to engage and devote time to make things right. This should be proportional as is.
Does it mean the content award allocation proposal is not going to be implemented after all?
For me it's quite disappointing that no matter if you operate a bot or do it manually, currently the best strategy is to upvote any post made by a whale without reading it. As a result the above post by Dan got $2k after a couple of minutes, whereas an alternative post by james-show on the same subject got $0.12. For me this is clearly not a sign that "the organic process is working", quite the opposite.
Yes. It appears all of that attempted fairness was thrown out.
That proposal made $2600, and was completely scrapped in favor of not protecting the users from bots at all.
Seems like curation works perfectly ;-)
I didn't vote for james' post because the change he proposed is only doable with major changes to steem. That's not something to be done in a couple of days, and the problem doesn't show to be so big to dedicate a huge amount of time for it. There's more important things to work on.
Dan's post lines out that they actually thought about what the problem really is, and what can be done to improve the distribution between posts. A set of small changes, which will smooth out some of the current edges.
So the whales keep all the curating power, the bots will not be dealt with because they are profitable, and the users are allowed to vote more (with a little increase in effect).
I think the new users will abandon ship once they learn how dependent as Tuck_Fheman put it "on pandering to whales" this really is. As I recently figured out, unless you have 16000 Steam Power, your vote doesn't even reward 1 cent to content creators. (and there are less than 100 of those users) This removes the incentive for regular people uninterested in programming or crypto to post or invest here . (especially a minimum of 16 grand)
Unless there is a reward for the uninvested typical reddit user they will migrate off to larger, friendlier, and easier to use social sites. There are similar sites to this one appearing, it might be wise to pay a little extra now to hook a larger userbase.
You have to earn your way up through writing and commenting. Curation rewards are like mod-powers, you only get them after posting on a forum for a while.
It's too bad you can't or won't see it from the uninvested new user point of view anymore.
I highly doubt it will be possible to earn 16,000 steem power, or that investing it in a platform that changes on a whim in less than a week like this would be a smart thing to do. Even upon achieving 10x that amount of rewards, the grand ability to donate a dollar for content I like is not worth the months of effort that would require. Watching you disregard all the discussion and suggestions about protecting users from bots only reinforces that idea.
People are going to be pissed off after they realize the ad campaign only applies if you invest thousands of dollars, or have a bot, or know someone. My estimate is 2-3 payouts before new user activity drops off and they go try the alternatives.
You shouldn't expect to give away hundreds of dollars to others over the course of a month here. That's where SD will come into play, you can donate out of your own pocket anytime using these.
When you want a new user to give 1c for a first vote, that's 6$ a month - twice of what the account is worth right now. If that were possible, I'd create a lot of small accounts and let them post spam & vote for each other all the time.
Voting rewards don't count a lot when it's only a couple of votes, but the more upvotes the post receives, the more each single vote counts (also those cast before). The busier it gets here, the more eyes a post will need. Whales are limited in amount and voting power, they'll always stay an anomaly, but their domination will go down more and more over time.
@pharesim
The context behind that partial quote was not tipping, "The grand ability to donate a dollar" (by voting) would take a massive investment and months of work. Only big investments like yours for instance, at 60,000 steam power can even give over a quarter...
All everyone has been trying to point out is that when a hundred new users all upvoting the same post notice they don't have any effect at all, it will piss them off and chase them away.
Whales want to diversify their risks.
Thank you for the information Dan and everyone involved. I agree with the conclusions.
That is not the math that I have witnessed. Please explain in detail how many users it would take.
The only vote have seen that gave a post 1cent was from a user with 8,000 steam power. This means that it would take 16,000 steam power for that user to get 1/2 the rewards, or 1 cent. It would take the votes of hundreds of normal users to give that user anything. I have yet to see even 1 cent come from users without thousands of dollars invested.
This is still completely ignoring the fact that bots will be allowed to steal most of the curation rewards, because it was just decided that nothing will be done to protect people from them (by the person who wanted to scrap the whole reward system because of them last week).
Common! You already know that tipping don't work! Give me an example it worked well somewhere!
This is what we want to change after all... If tipping was successful we are not needed in the first place.
@liondani: he mentioned tipping.
Could at least the earnings/rewards be better and easier at the beginning ... like with new casino players that get so many rewards (lunch for 2 for free,bonuses,tickets, free entrance etc...) until they get hooked... and then the rewards get less after one month or two... ;)
or just give to new users a first deposit bonus and give them 100% more Steem Power
when they buy Steem Power with their bitcoins from steemit
Promotions like this are good but what is the mechanism for paying for them?
@liondani I honestly don't know whether they have more than enough or not. Every new account will need to be funded with 10 SP which means they currently have enough for 3 million users accounts and that's all (yes changes can be made to the minimum balance but I'm just pointing out that the resources are not limitless here). On top of that, much of Steemit's stake is supposed to be slowly sold off to pay for development. I don't know if that is still their plan but it was earlier. So giving away more of it to pay for this sort of promotion would have to be balanced against those other competing uses.
steemit pays for them (even manually) until the planned redistribution of wealth is done!
they have more then enough... https://steemit.com/@steemit/transfers
https://steemit.com/beyondbitcoin/@officialfuzzy/if-steem-reaches-even-25-of-reddits-market-valuation-#@smooth/re-fuzzyvest-re-liondani-re-officialfuzzy-if-steem-reaches-even-25-of-reddits-market-valuation--20160608t100521600z
Sadly, anything making things easier for smaller guys can be gamed.
The bonus is something steemit should consider for sure though, nice idea. Maybe a bit sleazy ;-)
Sounds good. When is this effective from?
The change to the voting power mechanics will require an deploying an update. It hasn't been released yet. Based on recent experience I'd expect an update available within a few days with an effective date a few days after that. That is just a guess, though, I don't know their actual schedule.
Yeep!
17 upvotes in 30 secs... that is for sure quality content, no doubt... clamping profoundly as well.
I fail to understand why this self fulfilling prophesy is failing to make 10,000 SD in rewards after a whole hour?!!!
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Downvoted this not because it isn't a quality post or because I don't agree with it but because I don't believe the interests of Steem are served by every platform update or discussion post from the developers receiving 100s or 1000s in rewards that would otherwise go to other users.