A Modest Proposal: My Thoughts on Budget ProposalssteemCreated with Sketch.

in #steem5 years ago

I think most Steemians have read @jerrybanfield's Steem Budget Proposal by now. Major kudos to Jerry and to @lexiconical for the editing. If you haven't read it, GO read it now!! Really, I'll wait.


Okay... now that you're back, that was a lot to take in, wasn't it? I'm going to provide a high-level summary and then share my thoughts on the overall impact and some potential improvements to cover for accountability and controls.


The big idea is to stop paying interest on Steem Power, cut the rewards to the Top 20 witnesses (only the top 20- lower ranked witnesses will still receive their normal rewards), and take the proceeds to do monthly budget proposals.

The seed for the idea came from Dash, which did something similar and saw massive increase in adoption and market value over the last year. (Most legit cryptocurrencies did well over that same time period, so it would be more useful to show an indexed comparison between Dash and bitcoin, or between Dash and a starting basket of Top 10 cryptos by market cap.)

Potential Impact

@jerrybanfield explores the likely outcomes extensively (the good, the bad, and the excessively optimistic). He also mentions that some portion of the budgets each month would go to projects that aren't that good.

On the whole, I agree with Jerry's analysis of the potential impact, although I am a little less optimistic about what portion of the budget will go to projects that don't really add value to the Steem ecosystem. I do think it a little less likely that companies will be able to build sustainable business plans around budget proposals. If a Steem-oriented business has a long-term vision for monetization, they can already do an SMT (or an Ethereum-based ICO) and raise funds for their project.

So most proposals will be shorter-term, will be secondary sources of capital raise that have fewer strings attached, or will be just plain lousy. So I do have some suggestions to remedy that.


Instead of proposals being all or nothing (and having to come back for more) there should be an option for to present budget requirements over an extended period. Quarterly budgeting is practical for small businesses and aligns with the 13 week power-down schedule. Budget proposals can optionally include their own vesting schedule (which could range from straight-line to double-declining balance, with anything more aggressive automatically dialed back).

Steempower assigned to vote on budget proposals can be assigned either to full funding or to the budget schedule. The majority of the Steempower voted to a budget proposal determines which outcome it would receive if it is funded. If a budget proposal is granted a scheduled release instead of full release upfront and has not submitted a schedule, it automatically receives a straight-line schedule (which would look exactly like powering down Steempower).

In my initial comments, I suggested that the existing power down mechanism could be used. Actually, a new mechanism would be needed:
Once a budget proposal has been approved, the granted Steem is locked into a smart contract that follows the vesting schedule. Over the life of the project, there would be some expectation that the Steemian receiving it would provide some updates (they can use the budget proposal to establish expectations). The users that voted on the proposal can rescind their votes. If the total vests supporting the project drop below 50% of the original support, the rest of the budget release is cancelled and returns to the budget pool for the next cycle. New support could be raised to replace support that is withdrawn, but the total vests supporting the proposal cannot drop below 50% of the original support level.

I also suggested in my comments that the budget cycle be weekly releases of 50k steem instead of 28-day releases of 200k steem. I believe the logic for that (consistent budget grants for long-term projects, subject to ongoing results) is better served by the proposal given here.


I fully support @jerrybanfield's proposal, with or without this suggested improvement. I welcome any feedback and comments on whether this is an improvement to the proposal. I'm also new to Steem, so I have no idea how consensus is built around hard forks. If somebody can point to quality resources on that topic, I would be most grateful.


@josephsavage -

I had read @jerrybanfield 's budget proposal post for projects on Steemit a few days ago and my initial reaction to the actual proposal and the verbiage used actually turned me off greatly with my initial gut reaction... I had been a follower of Jerry for a few months prior to joining STEEMIT and was convinced that he sincerely wanted to make it a better platform because he believed in it - but also because as with Dash he was heavily invested in it and would naturally put marketing and promotional efforts into it for self-gain...

That being said.. I think Jerry's proposal is very aggressive and cutting the daily rewards for the top 20 witnesses by 50% seemed a little excessive... Also Im not sure if there is a little bit of resentment in deriving that percentage decrease, especially since he had been bumped out of the top 20 right about the time he claimed he began writing the article..

I really think that if the consensus is for a budget proposal to fund projects - which I've yet to hear any examples of which would constitute a ballpark funding for - I would still support it.. I can just see an influx of spammy, scammy proposals flooding in inhibiting the presence of quality - platform longevity building projects... Who knows though - only time will tell..

I agree with your amendment suggestion of having the weekly 50k budget grants instead of the proposed 28 day 200k grants - at least to start out - ensuring the budget proposal is adding value to Steemit relative to the payment for the project..

I also like how you touched on the more micro managing, or keeping tabs of the projects to make sure that results are actually occurring and deadlines are on track with little deviation..

After the multi-million dollar ICO flops of 2017 of the over 1 Billion dollar capital that had been raised... There is just too large of a percentage of projects failing or projects being nothing more than all talk and delay, delay, delay, disappear...

What safeguards are being put into place to protect the granted funds for projects?? I know Jerry admitted there would surely be a few monthly dud grants for sure.. but of those few what percent of his 200k allotment would that account for?

Lastly - Not to knock Jerry or accuse him of any predetermined mal-intent.... I'm very curious how many project proposals for this possible system are already ready to be submitted by Jerry or one of his affiliates...

The one thing that scares me is that I hope the past of Jerry's relationship and investment/promotion strategy of Dash is not a planned repeat ploy for Steemit..

DISCLAIMER - I am not a Jerry hater, nor am I accusing him of anything against the best interest of Steemit - but I think all Steemit users have a duty to look a little deeper into this budget proposal not just from a financial and economic standpoint for expanding and strengthening the business side of Steemit but also look at any and all possible corruptions that may result from a change to Steemit such as this..

What had worked for Dash doesn't necessarily mean it will work for Steemit... They are inherently two very different cryptocurrencies, platforms, and communities

I have learned a little more about the way hard forks and consensus work in Steem, and the more I learn, the less convinced I am that @jerrybanfield's approach will bring the results that we are looking for.
If there is strong super for budget proisals, it would work better to build an SMT that coordinates it. People in support of proposals can buy the SMT to gain voting power on proposals and the initial round can be funded using the Steem raised in the ICO. It could have a fixed post-ico creation rate to generate subsequent budget. Then if all goes well we could get whales and top 20 witnesses to commit supporting that market to keep allocating Steem to budget proposals.
All the voting mechanisms, accounting schedules, and monitoring controls needed can be built into the SMT protocol without a hard fork in the blockchain.

@josephsavage - WHAT HE JUST SAID!! (You)

That makes a lot of sense even though I don't understand all of the terminology as it would be applied but I do believe I get the just of it..

I dunno - it's not that I do like the guy (Jerry) especially since he's the reason I found Steemit - but - something just smelt fishy from his post like it wasn't genuine and more of a salesman post -

If it makes sense for STEEMIT - nobody should have to "sell" an idea - there are too many great minds on Steemit that know if something will ultimately be fit the platform

Thanks for explaining to me more about the SMT'S


Thanks for your supportive comments. This post actually gained quite some support. I haven't seen much discussion of the @jerrybanfield proposal in my feed, though. Maybe I'm following the wrong people?

I think I need to do a follow-up post this weekend if I can make time for it and explain the SMT idea in more depth. Maybe I will figure out @utopian.io finally to give the proposal a little more traction.

Anytime - I haven't seen anything about @jerrybanfield 's proposal either in my feed - knowing him he probably had promoted the post on FB, YouTube, Google Ads etc - Lol

And YES - if you have the time definitely try to explain the SMT idea further - I will certainly do my best to help promote it

Utopian seems really promising and now is certainly the time to get it on there with it's massive initial popularity :)

@krytonika - I don't know enough about Dash, but even if the two were very similar it still doesn't mean that the changes will have the same impact either. Many attempts to change the people by changing the system results in adaptation of the people to the system. I think by changing the people you will get a reflection of that change in the resulting system. This is why governments with short term visions of changing systems have never created any lasting impact. I hope we don't make the same mistakes here.

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Good proposal.

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