Steem Power Delegation and the Mega-Whale Game
HardFork 17 will introduce a new feature, called "delegation of Steem Power". As far as I understand, it works like this: one can "delegate" a part of his or her Steem Power to somebody else and the benefits of that specific Steem Power will be shared accordingly. By "benefits" I understand mostly curation rewards. There might be also interest, but since the APR is only 9.5% (as far as I know, hope it didn't change lately) this may not be as attractive as curation rewards. Once the SP is delegated, it produces effects immediately, but the return of the delegated SP is subject to a 7 days delay. This delay is needed in order to prevent the gaming of this feature.
The Elusive (And Collusive) Mega-Whale
Suppose a few whales are deciding to delegate their SP to a few good curators in order to increase their curation rewards. A few passive investors - people who just hold Steem for profit - may do the same. A "dolphin syndicate" may have the same idea. And obviously, a minnows pack may do the same thing.
So, I think we will soon see the rise of a new type of player here, one that I like to call "the mega-whale". A special type of members, with a lot of voting power and a very short lifespan (most of the time, just 7 days).
This mega-whale will be backed by very large amounts of Steem Power. Each vote of this mega-whale will take out big chunks from the reward pool. In today's numbers, if we know a whale's vote generates a $10 increase in rewards, a mega-whale's vote could easily generate $40-$60. At a total size of the reward pool of about $3000 / day, 40 votes of such a whale could take out between $1600 and $2400 of it. That's between half and two thirds of the entire reward pool.
In theory. Because, in practice, things will - probably - take a different route.
One that we know, oh, so well, and we hate. The flagging route.
These "voting syndicates", created and reset on a very short time window (7 days) will act as regulators of the reward pool. Downvoting may soon become the norm. The times where we could predict the rewards for a post with at least 80% accuracy will be a thing of the past. Add to this the 7 days payment window and the entropy will explode.
The concentration of (Steem) power in a very fluid way and at no cost, will constantly reshape the power lines of the voting map. There are so many possible scenarios right now, but I think it won't be impossible to see guilds created every few days, counteracting each other votes and calculating the next potential guild formation interval.
Some potential effects:
- narrow specialization - mega-whale formation may require very specific skills and approaches. I see some people specializing in this as a full time job.
- higher entropy - no one will know for sure how much a post will be worth until the final hours of the payout window. It may translate in higher engagement, but it may also filter out people who are more into predictability. I don't see how this will drive growth, though. People, usually, need a bit of certainty.
- higher curation rewards for the "right" mega-whale members - if you happen to be in the "right" mega-whale, your curation rewards could be significantly higher than now.
- higher payout for authors voted by the "right" mega-whales - if you happen to be voted (and not downvoted too often) by the right mega-whale, your author rewards will be significantly higher.
All in all, another spectacular day in Steemland. Love it.
P.S. I'm neutral on this, as a witness, and I wrote this article just as an exercise of imagination. Things may take a completely different route. Last time I checked, I'm not Nostradamus.
image source - Pixabay
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
https://steemit.com/~witnesses
Steemit, Inc could empower the masses with delegated power that can be revoked if a user misbehaves. Collectively, these masses of ordinary users would outweigh any single group of whales.
I don't think that will work. "The masses" don't have skins in the game. By delegating more power to untrusted people you're denying that other stake holders have their say.
If the power among the masses is well balanced (if crab theory works), then they won't have big impact on other whales' behavior.
My thoughts exactly.
Interesting.
That could be nice but if this imply empowering some people for free then I see this as unfair.
I think this is a really cool idea. Maybe there could be some rotating queue that people could apply to in order to get a turn at exercising some delegated power. If I had such a boost for a short period of time, it would be really fun to curate and see how much good I can do for how many people. I already have an idea for targeting some forms of content that seem underappreciated currently and seeing what happens with that. Looking forward to seeing what happens with this!
That's obviously possible and it would be interesting to follow up on this one. As some of the commenters already pointed, it will raise a few questions, though, from the legitimacy of these empowerments, up to questioning the entire idea of decentralization. Coming from an ex-communist country, I have a strong reaction against the "power to the masses" slogan. It never ends well.
I totall understand that your intentions are good and I support that.
But going beyond that, in a setup where there won't be a @steemit account capable to outweigh anyone, the dynamics of the mega-whale game will be very interesting to watch.
I'm just taking a "wait and see" approach for the time being. But even after just six weeks here, I am having some hesitation about the increasing appearance that Steemit seems to be increasingly about "who plays the more clever game" than who creates valuable content, connects socially and distributes their content to an extended audience outside the platform.
I know why @krnel was making so much noise a few weeks back... the whole rewards system takes on more of a "lottery based" than a "merit based" nature; it becomes arbitrary rather than objective... that may not be awful for those already here, but it will be a very hard sell when it comes to attracting more serious content creators from other sites. And we have to think outside the timeline of "right now," if Steemit is to truly grow wings and fly...
Meanwhile, I observe.
Basically you are just quoting Steemit White Paper here )
I have to confess I haven't read it (the White Paper)... my observation was mainly based on 20-ish years of watching user-generated content sites self destruct as a result of poorly conceived curation/moderation/ranking of/sorting/rewarding content that left contributors scratching their heads wondering "What are they trying to DO with this place."
Don't have any great solutions to offer... but I've seen "The Road To Forkup" more times than I care to recount...
Well, it's an interesting read, also most of it is already outdated.
According to it, lottery effect is actually supposed to attract people.
Well, the "lottery effect" definitely does do that. But it fails to ask the question "What sort of people ARE they?" and "Are they the people who'll help assure the long term sustainability of the platform?"
If you have a gambling and gaming site? An emphatic "yes!" If you have a social content site? An emphatic "no!" My experience with the "lottery crowd" is that they tend to be a swarm of "money for nothing" locusts who care about nothing but "gaming the system" for personal profit... they can destroy something really promising in a matter of months. Never underestimate the power of human greed!
That's very true. Especially the last sentence.
My understanding is that the idea to try to attract only free-from-greed people was never considered to be feasible .
I. Hear. You. :)
I thought the curation rewards would not be shared at all. Good to read. This may motivate delegating.
Well, that's my understanding, that SP delegation will also result in rewards sharing. I hope I'm not wrong.
I in fact hope too :)
your posts are always so well thought-out and you have great writing skills, thanks for your perspective on this issue
Thanks, appreciated :)
I will stay watching. can't see how it will play out. a lottery is not the worst scenario.
A lot of people seem to be in "watching mode". I'm curious too, but given the history of the past 5 months here, I feel it will be a roller-coaster.