It would be good if the 'burn to promote' strategy finally gained traction and it was recognized by all the front ends.
I've been against instant power downs across the board, fee or not, but if it's opt-in people can choose to do so at their own risk. My main concern would be if 5% would be enough to discourage manipulation of stake-based voting.
Great observation. I didn't go 1% because of the voting manipulation (what we see on EOS by exchanges using users funds to vote themselves in) - 5%, IMO, would be more than enough to curb voter manipulation. Really, the greatest place we see this is by exchanges voting with users funds, it would be illegal for them to burn 5% of their user's funds to vote.
And on the other side, just rogue whales trying to game the system, 5% of anything big enough to sway votes because very expensive IMO.
Instant powerdowns would create a lot of risk. This would need more research although i find the idea very interesting.
5% though really isnt much. As we saw yesterday the market can move 50% in a day. If this creates so much risk then the payoff for the others Steem holders should be a bigger then 5% burn.
@joshman In order to prevent whales manipulating votes, the best way would be to create a powerup period instead of powerdown. It would go that way: once you decide to stake, only some percentage(let's say 10%) of your steem becomes Steem Power every week.
Why this is better: It forces new comers to use the platform for a few weeks before being fully powered up. They can't have all the influence they want in one click. It also prevents the manipulation you were talking about, as they won't be able to constantly power up and down.
And finally, if witness voting is being manipulated before a hardfork, a whale would need to power up weeks in advance in order to get maximum influence, this would incentivize long term hodling for influence.
I still like the 5% burn purely as a sink though. Maybe 5% would be too much and no one would use it so it could be tweaked later.