Understanding Steem's Economic Flaw, Its Effects on the Network, and How to Fix It.

in #steem4 years ago (edited)


I'm sure most users on this network have seen the same "vote-farming" and flagging dramas on Steem over and over again for the past year. It's not hard to see that a lot of users are doing this "vote-farming" thing, including the largest stakeholders on this platform. It just means the following under Steem's current economic model:-

  • Self-voting
  • Vote-selling
  • Vote-exchanging

Please keep in mind that all of these are economically equivalent. For example, I can sell my votes by delegating to a bidbot, or I can also achieve the same effect by using all my votes on my posts only, or give someone $X amount of votes to receive the same amount back. All of these actions are the same: vote-farming. Vote-farming at 100% just means using 100% of our votes only on ourselves. This is indeed the best move under the current economic model, which is fundamentally flawed, and a lot of users including whales are actually participating in it.

Anyone not participating in this activity will just be losing out BIG TIME over the months and years. Like I've said in my previous post, someone with the same amount of Steem Power (SP) as me in the beginning of this year is now already ahead by 50,000 SP just selling their votes, while my votes mainly went to curation while taking my time to post. So I'm not holding back as much anymore, and I'm playing the vote-farming game on my alt-account @etherpunk to keep up until Steemit Inc and the top witnesses decide that some of us are right about our diagnosis and proposal to fix the misaligned economy. An economic system is flawed when it relies on the altruism and sacrifice of some users.

The path of profit maximization is again, vote-farming at 100%. This means maximum profit with the least effort. If you think there's a risk of people flagging, sure it may happen. But over time, you'll come to understand that Steem's current economic incentives just makes flagging arbitrary, futile, and ultimately meaningless. Nobody will even bother flagging anything else other than outright fraud, theft, or just plain retaliation. You can put up 10 random one-sentence original posts a day and just vote yourself up all the time while even buying some extra votes for the ROI too. It's very likely that nobody will stop you these days. Even if someone does, they'd most likely be unable to sustain their flagging on your account over a long period of time, unless you're just pure evil. Bidbots also generally do not have high standards. How else are they going to remain competitive?

It's now a move that I actually encourage everybody to do. Vote-farming at 100%. Instead of selling votes, you can also avoid the middleman and just vote on your post all the time for the same effect with more profits. Now you might think: alright, so everybody just minds their business and do their vote-farming at 100%. Under this scenario, what's the actual point of the ~8% annual inflation on Steem which just goes back to the pockets of the voters? This is why I'm saying that anti-abuse initiatives are contradictory under the current economic model. We're fighting against the tide of incentivized spam and abuse. My as well just set Steem at 1% annual inflation without reward pool just to keep the network running, all while people post whatever they want as usual without voting.

The point is: Steem's economic incentives should be aligned to encourage allocation of inflation to contributions that benefit the platform. While it's impossible to design anything that encourages all SP holders to allocate 100% of the inflation to other contributors other than themselves, we can go for about 50%.

This is the proposal. The best way out of this situation is likely to:-

  • Increase curation rewards (50% is a good start)
  • Move away from pure linear and into something like n^1.3
  • Subsidize downvotes (cheaper downvotes, separated pool)

Doing so will make curation more likely as the economic incentives from doing so will have a better chance to outperform "vote-farming". This "hack" is really about giving people half of every votes given out under a curation game. Some of us have been saying this and repeating the same arguments for well over half a year, but not many seemed convinced at all. I hardly expect anyone who have only put in less than 20 minutes of thought is seeing the problem and solution clearly. But that's generally all the time most people have these days. Some of us have put in dozens if not hundreds of hours just refining our thoughts about this one single problem.

Some words about bidbots: the proposal above will simultaneously make the pricing for votes much less predictable than in a linear economy. It won’t kill the vote bidding business but just introduce some extra risk (which there’s essentially zero at the moment) which would end up being more like promotion with less ROI, so it wouldn’t serve as a bypass to the act of holding SP for more earning power. Yes, there's a leak here that needs to be patched up. More profitable curation services should also emerge after the proposed changes.

The proposal has non-trivial costs, but as @trafalgar says it, nothing is as costly as a completely broken content quality indifferent economic system for social media outlets. Remember there's nothing wrong with profit maximizing behavior, one should expect it. The problem is when we don't align it with the behavior we want that's best for the entire system. To further repeat the point, I'll copy and paste @trafalgar's words here as I think he generally explains the situation much better than I do:-

We currently have a system where stakeholders are incentivized to engage in content indifferent voting behavior (vote selling/self voting) to maximize returns. This completely defeats the protocol’s ability to foster engaging platforms that revolve around content discovery.

We need to move away from an economic system that makes it too costly to vote on work that stakeholders actually deem valuable if we want this place to survive.

  1. Upping curation rewards is an obvious answer, but by itself, it is easily circumvented. Bid bots can just offer to share most of the curation rewards. Self voters can spam hundreds of posts and just upvote the ones that were least voted on by others after 15 minutes to avoid others 'stealing' their rewards.

  2. Non linear should be seriously considered. Having reward amounts/SP that differ per post depending on its popularity is the core component of moving away from content indifferent voting behavior. Yes it has a cost, but the n^2 we were use to was far too steep. At n^1.3 (or any crude approximation of this), we should get most of the benefits at the lowest cost.

  3. Downvotes incentives should also be encouraged. Of course greater downvote incentives has downsides, but in combination with 1 and 2 above it should allow for curation rewards to out compete mindless vote selling/self voting.

Content indifferent behavior is the bane of this system. No social media platform can survive if it's unable to at least sort exposure and rewards by some subjective standard of quality.

Note that the 3 items in our proposal have been considered very carefully to cover all the angles so we can get out of the situation posed by Steem's current pure linear economy with low curation rewards and costly downvotes. Just implementing one item is likely not enough. We need 3 of them. But of course, we only want to achieve an intended effect, so any better implementation suggestions are welcome.

Also, suggestions like passive staking for investor-types so they don't influence the content voting and ranking, etc are flawed. The same problems will still happen since we'd still be under a pure linear economy with low curation rewards and costly downvotes. We'd just be reducing the reward pool here to be reserved for passive staking. The shrunken reward pool will then remain the be used in the same way, which is vote-farming, instead of content and curation.

It's my wish that more community members around here take notice about this problem and solution. If you're convinced, please make some noise about it. I've also written this about this a few times earlier this year. Some of us even wrote about it more than a year ago. The arguments and proposal remain to be in the same vein.

Please save Steem from all the unnecessary suffering and restore our sanity. We just need more users to stop running around headless, stop getting involved in senseless witchhunts under a flawed economic system, and instead seriously consider our specific problem statement and solution here. Some of us are really surprised that nobody at the top is onto this matter like an eagle over the past year.

It's a mistake to pin Steem's problems on culture and greed. Altruism and selfishness should be one and the same, which is what our proposal seeks to achieve in providing voters ample returns if they play the curation game instead of mindless vote-farming. The correct move then is in designing economic incentives to align profit maximization with activities that are good for the platform instead. It's as simple as that!

As always, thanks for reading.

Note: I want to make it clear there's nothing wrong with self-voting or selling your votes. It just has the potential to hurt the platform when there are no checks and balances in a flawed economy.

You can vote on your favorite witnesses here: https://steemit.com/~witnesses. I'm also running as one. If you trust in my choices for other witnesses, you can also set me as your voting proxy on that page.


First of all I want to say that I am very glad for the work being done by @kevinwong and @trafalgar to enable participation on the current Steem economics, while also pushing solutions forward. I very well agree with most of the points brought up here. The increase in curation rewards and downvotes incentives are particularly significant, as we tried several attempts to overcome those in our product development. The lack of proper curation incentives drove us to tricky implementations which we had to tweak continuously in the way we reward our curators/moderators. The lack of downvotes incentives made us think of complete different ways to sort our contents, compared to what the blockchain can offer. Built-in solutions, like the ones aligned here, are ideal and could lower the hassle significantly.

I am collecting inputs, like this one, trying to have an overview of the hottest community requirements. Utopian supports the maintenance of Steem forks (see @reggaemuffin ' s one) which enable proposals and testing of disruptive changes. It makes sense to bring such inputs in the right places (github issues) and incentivise the development, via community participation.

Thanks a lot for taking this up @elear. Much appreciated. It would seem like a great time to be setting up extraneous protocols to get important discussions going on with good info, and tying it along with development / testnet

The lack of proper curation incentives drove us to tricky implementations which we had to tweak continuously in the way we reward our curators/moderators.

Can you elaborate on this? Do you mean to say that if curation rewards were higher, you would spent less on incentives for your curators?

The lack of downvotes incentives made us think of complete different ways to sort our contents, compared to what the blockchain can offer.

As you clearly agree with the points in the post, could you give more details on your comment? I feel that your words are too broad and don't know what to take from them.

There is an entirely different way to supplement the voting pool while implementing restrictions for self voting and vote selling. If the voting pool is reduced, there would little to no incentive to use the platform. After all it is slow, clunky and has a very small population with respect to other social platforms. Better rewards with incentives to do good or restrictions for bad actors could be implemented. But where would we get the extra revenue to do this?

Here is the idea:
Start a centralized exchange to complete with the likes of Binance, UpBit, Coinbase, Poloniex etc. yet have STEEM and SBD as the common trading pairs. If Steemit Inc were to create and run it, they can generate massive revenue to supplement their Software Engineers. Excess revenue can go toward supplementing the voting pool or towards rewarding good actors and good witnesses. There is no problem getting support and usership as All major exchanges can’t resync their nodes in a timely manor. People would use the new centralized exchange as they can’t use Binance or Poloniex. By the way both Binance and Poloniex STEEM wallets have down for a month. This isn’t the first time for Binance either. Their Steem wallets have been down for a full month before. Poloniex Steem wallets have been down for 6 months in recent past.

But get this, an exchange with all the major cryptocurrencies traded with STEEM and SBD can be created by anyone with the right technical knowledge. It doesn’t require Steemit Inc to do it. Whales could even pool their resources to fund startup costs They won’t need to self vote as the exchange will be so much more profitable.

I don't disagree with any points made here, I think its been obvious to anyone paying attention for way over a year.
Though I would have one major statement to make and one question.
There is no way you will keep profit seeking gamers away from working the system. It takes to long to implement hard forks and is to easy for a gamer to come up with work arounds. The problem is now how Steem works but how PEOPLE work.
This is never going to be fixed by trying to create rules that MAKE people do what we want... If anything it will only make them leave. Then the price of steem will crash and everyone will still be complaining as the rewards will be even worse than they were with people uprooting them selfs.

So the REAL question here is of which everyone actually needs to be asking. How do we provide a quality return (which means, reliable, easy and high enough %) on the investment whales make?

This is the answer. If we can find a way that is better for the over all eco system yet still provides a reliable, consistent and profitable return then its all taken care of.

Almost no investor is going to invest in a platform not to make money. Also most whales do NOT have the time nor desire to curate. Plus higher curation rewards wouldn't change anything anyways. Just use curation bots. Easy peasy.

Glad everyone is thinking about this, but simple economics shows that its the ones with money who hold the influence. So have to find a way to GIVE them INCENTIVE to move in the direction the community wants.


Hey thanks for dropping by @quinneaker, I think it just takes a lot of repetition and refinement in arguments to get the points through. There's a bit of momentum this time around as ned has considered it in the comment section of his recent post.

Check out @trafalgar's response above. He's answered your concerns very well!

Yes, all progress takes vast amounts of collective discussion, meditation, pondering and even arguing. Thats why this is great. Though with that being said my statements/questions still seem to be the key in that process. I read a LOT of comments including many from @trafalgar but did not see one that answered clearly and specifically my questions/statements. I can look again as its a critical issue.
Best regards and SteemOn!

indeed,most of big stakeholder of sp are self voting on their own post,but we can't blame them if they run and act like that on the steem blockchain.

Because they are investing and spend their own money to raise their SP to do some propits of it's own post.

But still we are glad that some community giving a free curations specially to minnows and new comers with good article and writing.

like @curie , @acidyo specially you and to other steemians who support those good author..

Happy to know it also that you finally run your own thread and being one of my new witnesses @kevinwong

If you don't mind can i know you witnesses too! because i have special witness that i supported if you my 2 witness count's on you i'll take your proxy if not i give you a vote alone.. :))

The past 2 weeks have been brutal for minnows. Our post payout are decreasing by the hour and by the end of 7 days it's probably gone down at least 15%.

Due to this factor, many have chosen to leave and not waste anymore time on STEEM. Out of 15 friends I've gotten on to STEEM, only 4 remain and only 2 of the 4 are active everyday posting contents and engaging with other people.

So I think it is a huge problem from the way the way things are now and I don't think STEEM will achieve it's potential we all hope for. Even when SMT starts, I don't think it'll make much of a difference. More stuff on a broken system doesn't fix anything.

Flagging content is all we can do and as minnows, nobody actually wants to flag because of the fear that we'll get flag too. And whale flags are obviously way more powerful than minnows. I personally think flagging can solve this problem as only "content with effort" (like this post) will be valued. However seems like minnows doesn't see this as their problem. They see it as "the whales will sort it out" problem. I think everyone has to take ownership of this and be more responsible on this whole issue or else we're doomed.

Anyone not participating in this activity will just be losing out BIG TIME over the months and years. Like I've said in my previous post, someone with the same amount of Steem Power (SP) as me in the beginning of this year is now already ahead by 50,000 SP just selling their votes, while my votes mainly went to curation while taking my time to post. So I'm not holding back as much anymore, and I'm playing the vote-farming game on my alt-account @etherpunk to keep up until Steemit Inc and the top witnesses decide that some of us are right about our diagnosis and proposal to fix the misaligned economy. An economic system is flawed when it relies on the altruism and sacrifice of some users.

From since I've known you which is January, you have not done what most have done which is self-voting and that's like 10 months. You've waited long enough for something to happen and have been vocal about this issue. I'm with you in this even though I'm directly affected by vote farming.

I'm just praying this changes happens sooner rather than later. Bless ya man!

Yes, the flagging is not effective over the long-term mostly because of linear. When everyone can reach for the nearest switch for max profit on nothing to do with content, there'll be too many people doing it. If you're not joining, you're losing out over time. If you're flagging, you're losing out over time too.

Edit: Flagging should be contingent though. It has some social cost attached to it. That's why it's better to have an aligned economy and just a small amount of free downvotes.

Yeah that way of flagging would make much more sense. If flagging is costing me my upvotes, why not just upvote someone else or myself? If this method of flagging was implemented, I think it would solve a lot of problems with this issue of rewards and upvotes.

You summed it up perfectly Kevin. It's why I have delegated a lot of my SP to a bidbot. I regret not doing it a long time ago, as I was just wasting the earnings potential of my SP. You're also right that this is a big issue and generally symptomatic of the broken economics that have plagued steem, for a long time. I am not certain what the correct equation is for effect of stake on the reward pool, but it's very clear it's not linear. (Though this was clear when linear was implemented from the original mechanism).

Hopefully you can use your influence to get more people onboard with creating a fix. It doesn't even need to be the optimal fix (as we may not know what that is until further experimentation), but at least some iterative progression would be nice.

@elear of Utopian is helping coordinate this matter, hopefully getting the ball rolling etc. The other side effect of the current economy is that nobody cares. Every second you care, the more you lose out lol. I hope the top witnesses are compensated well enough to do so. I wonder if I should make another move to only support witnesses that prioritise what some of us think is the most urgent matter that doesn’t require immense R&D to fix.

Every second you care, the more you lose out lol.

Sums up my entire experience with this platform.

@elear of Utopian is helping coordinate this matter

Good to hear that Elear is also on board.

I wonder if I should make another move to only support witnesses that prioritize what some of us think is the most urgent matter that doesn’t require immense R&D to fix.

Only you can tell you what to do with your stake. :)

Every second you care, the more you lose out lol.

Sums up my entire experience with this platform.

From a human standpoint, it's always worth caring. Whether this results in money or recognition, however, is another matter. In it, everyone is himself the best psychoanalyst, how he deals with a situation that depresses him or does not bring him enough profit. The question was always "How much is good enough?" and will always be the same. But one has to face it and not on the surface. To do this, one has to go deep and deeper into what is called self-knowledge.

To sprinkle in a little bit of philosophy here.


It's a solid proposal and worth a big vote. I don't necessarily agree with all parts of it, but I like your contribution to the discussion.

First, I think passive investors should be paid a return to keep them from mucking with the content through either posting or voting. If the rewards must go through the system, then higher curation rewards certainly would be preferable to expecting people to post junk for reward votes. But it still perverts things somewhat. I'd support it if there's no realistic option to simply pay passive investors some return, but I'd much rather pay them to stay on the sidelines and not feel like they need to post or vote on junk.

As for the downvotes, I think it could be abused unless the rep score accounts for voting behavior somehow. I'm not against your suggestion, but I'd have to think about it more, and I suspect it would need another component to be successful.

As for superlinear rewards, I just don't see it. I still think that would be a mistake because we've been there and seen that things work better with linear. Superlinear is a faster route to more concentration of wealth and power, which is the wrong direction. I think believing that superlinear would work also assumes that larger SP holders would vote for the best content, which is not necessarily the case, though I do appreciate that you are trying to find the right economic balance with curation rewards also. I'm probably one of the people who would benefit from superlinear, but I don't know that it's in the platform's best interest.

Would it be possible to fork some testnet where various ideas like these could be tested?

I've found a place for passive investors that doesn't involve messing with the natural flow of content production or consumption. I explain in detail within this post:
the common struggle someone like me faces as a content producer here after all these years and I offer a solution that could easily fit in with what @kevinwong talks about here. The post leads to other posts with more information. The comment sections are jammed with even more. People are scratching their heads wondering how to bring new money into the platform and I'm clearly stating the fact this is the entertainment industry and a functional promotional system using ads is one way to bring this new money in. I've explained how, but I need more people to see it.

Yes Utopian is working to setup a definitive place to study the proposal and read opinions about it. @reggaemuffin seems to be handling a testnet so it’s likely we can test these things.

First, I think passive investors should be paid a return to keep them from mucking with the content through either posting or voting. If the rewards must go through the system, then higher curation rewards certainly would be preferable to expecting people to post junk for reward votes. But it still perverts things somewhat. I'd support it if there's no realistic option to simply pay passive investors some return, but I'd much rather pay them to stay on the sidelines and not feel like they need to post or vote on junk.

The same problem is going to persist unfortunately, as we’re only effectively shrinking the rewards pool for the passive staking allocation, while the economic incentives for the rest of the users remain the same.

As for superlinear rewards, I just don't see it. I still think that would be a mistake because we've been there and seen that things work better with linear. Superlinear is a faster route to more concentration of wealth and power, which is the wrong direction. I think believing that superlinear would work also assumes that larger SP holders would vote for the best content, which is not necessarily the case, though I do appreciate that you are trying to find the right economic balance with curation rewards also. I'm probably one of the people who would benefit from superlinear, but I don't know that it's in the platform's best interest.

Previously we were at superlinear (n^2). Today we are at linear (n). The proposal suggests somewhere in between (n^1.3) which should be more balanced while making it less predictable for people to put a price on votes, providing variance/contrast, and abuses would only be possible by piling up votes for a more substantial payout so its more manageable for the community.

As for the downvotes, I think it could be abused unless the rep score accounts for voting behavior somehow. I'm not against your suggestion, but I'd have to think about it more, and I suspect it would need another component to be successful.

Cheaper downvotes is more for contingency as most wouldn’t practice it anyway. It just makes it easier to take down abuses or overvalued posts from any gaming. All said, there’s some social cost to cheaper downvotes, but I think the benefits outweigh the downsides of this proposal.

Superlinear is a faster route to more concentration of wealth and power, which is the wrong direction.

I would prefer a curve which started as n^2 / exponential (thus flat), and then later changed into linear which would work against self-voting as well as excessive rewards.

@clayop had a similar idea.

I appreciate your initiative bringing back some movement in the rewards discussion. A higher curation reward share and free flags both sound good to me.

Although I share @whatsup's concern that moving back to a superlinear curve will not incentivize voting on better content but on known successful authors, I also feel like the overall situation can't get worse than it is now. After the last big changes to the reward system we said we'll have to test and change more, so let's do that!

I'm also not convinced that paying stakers an automated return wouldn't improve the content rating - as long as they get the same they'd get with vote farming. Why should anyone put in the work if they can make the same or more without. What I can see though is a risk that the reward pool would shrink to a small fraction of what it is today. Definitely a lot bigger change than your proposal, so I'll support that for now.

Hi thanks for dropping by @pharesim!

Although I share @whatsup's concern that moving back to a superlinear curve will not incentivize voting on better content but on known successful authors, I also feel like the overall situation can't get worse than it is now.

Curation services will emerge out of the proposal and we'll have the best of both worlds (something like n^1.3, which is between n and n^2), just need sometime for it to play out until it reaches the new economic equilibrium. Cheaper downvotes are a contingency and coupled with n^1.3, we'd have a manageable playing field for community self-reg.

I'm also not convinced that paying stakers an automated return wouldn't improve the content rating - as long as they get the same they'd get with vote farming. Why should anyone put in the work if they can make the same or more without.

With the proposed changes, passive staking could work (or else we just have a shrunken rewards pool under the same econs), although stakeholders will most likely delegate to curation services which should more or else bring about the same returns as bidbots.

Well, probably everything has been said by now. Flags aren't free, they have a social cost. And a big issue in the reward economics is that we force people to participate in something they don't care about. Those will always go the easiest route to make their profit, which under superlinear means automation towards successful authors. With n^1.x less than in the old days, but probably still noticeable.
The reward economics would drastically change when staking is more profitable than vote farming, the assumption that it'd stay the same doesn't make sense to me. There'd be no more bid bots and self voting, as those looking to maximize profits wouldn't participate in that econ any more.
But that's running in circles with assumptions on both sides, no way to tell with certainty without testing in the live environment.
Anything that makes bidbots less profitable is good, and that's something your suggestion will definitely achieve!

I wrote a post 2 years ago and the conclusion is a linear reward distribution mechanism depends on downvoters to succeed if possible. IMHO efforts should be made towards finding and incentivizing good downvoters. What I have done and am still doing is in this direction, see @adm and the old downvoting event. However, encouraging downvoting is hard and can easily be abused if designed poorly; it's also controversial and comes with costs since most people don't understand it, E.G. due to downvoting my witness has been voted down from top 20 long before. I had another post analyzed curation rewards distribution mechanism and perhaps helpful for you. Good luck.

what's yoyow doing in terms of voting economics?

The yoyow blockchain doesn't have voting right now. I don't know whether nor when it will be there. 3rd-party platforms running on yoyow e.g. biask.org have off-chain voting but I don't know the details.

What do you think about a 10% separate downvote pool @abit? Linear does give everyone the ability to immediately gain the maximum returns per SP exercised being entirely content indifferent, so it does seem like an unmanageable field for downvoting activities. And thanks for the links! Will check them out!

Sorry, I don't know whether a downvote poll will work, or how it will work. Who can use the energy in the pool? How to prevent it from being abused?

Downvoting is a really bad idea, it destroys social bonds.

Just saying. "Punishing" bad content should be done on the social level like in the tight-knit human communities of earlier ages when people "behaved" because they didn't want to become pariahs in their communities. The threat of "not getting the community upvotes" anymore (because of bad behaviour) is much more effective and less damaging than outright downvoting

Interesting thoughts, but I am sceptical:
1. Increasing curation rewards
Assuming that your measures would work and it would be easy to find good content on trending since it gets rewarded highly, higher curation rewards would disincentivize voting on this content in most cases. If I see a great post on trending or hot, voting on it will get me less curation rewards than voting on a mediocre post that has next to no rewards yet but will have some rewards since the author has loyal followers. Non-linear curation rewards would improve this situation, but not change it. Under the current system, this is the reason why I have set up a large part of my votes as autovoting for my favourite authors - voting at 13 minutes gets me much higher curation rewards than selectively voting the best content in my feed once a day would.
2. A non-linear voting system
Non linear rewards could be beneficial, but assuming there would still be vote-sellers, non-linear rewards would make buying a lot of votes more profitable - even more, curationreaper bots would vote before the vote-sellers do to increase their curation rewards
3. Downvote Pool
Voting power for flags coming out of the upvote pool is only one reason why there is so little flagging. The more important part is the fear of flagwars - I would love to flag many vote-farmers, but I know that this would likely result in them flagging me back. An anonymous downvote pool could be the solution there - if the whale I flagged can't see that it was me who flagged him, he can't flag me back.

Having been on the platform for nearly a year, I am at a point where I am sceptical if the rewards system can be fixed at all without leaving loopholes for farming rewards by abusing the system. The only solution I can see is that at one point delegating SP would become more profitable than voting (be it self-voting or reaping curation rewards) since so many dApps would want to rent SP to reward their users. For them, distributing their upvotes to the best content would be in their best interest for growing their platform.

"An anonymous downvote pool could be the solution there - if the whale I flagged can't see that it was me who flagged him, he can't flag me back."

That is a double edge sword, and that 2nd edge would have the opposite effect that you are hoping for.

I would hope for something like this to encourage flagging while preventing flagwars at the same time. Flagging will always be controversial, but taking Reddit as an example, while it can have negative results in some cases where flagging is abused to punish individuals or views, it mostly helps to prevent low-quality posts from reaching high visibility

The ability to downvote away the rewards of others is already one of the worst features here - if you were to allow it anonymously, (and cheaply), you would kill the community.

That was kind of my point.

easy to find good content on trending since it gets rewarded highly, higher curation rewards would disincentivize voting on this content in most cases

Curation rewards are NOT supposed to encourage voting on content that is already trending. It is supposed to encourage finding unvoted (or lightly voted) content that is undiscovered. Yes, in some cases this can be done now with a favorite author list but as more people compete for curation rewards (which isn't very much now because so much of the voting power doesn't bother), that simple strategy will no longer work (others will jump in ahead of you at 12 minutes and 'steal' your rewards, or even better do so only on the content from your favorite authors which is expected to do the best, which ends up 'stealing' even more of your rewards). Curators will have to work harder, become more clever, and dig deeper to discover good content.

Voting power for flags coming out of the upvote pool is only one reason why there is so little flagging

Very true. Addressing that one reason would still help.

Curators will have to work harder, become more clever, and dig deeper to discover good content.

Currently, the accounts that earn the most curation rewards are not human curators - not even @curie top curators who spend hours a day scouting for the best under-rewarded posts - but curationreaper bots. Anyone with some basic knowledge of Python or JS can write such a bot and specify custom rules - for example, a bot could vote for my favourite authors at 13 minutes but only, if the post reward is below 0.04$ or vote comments by Utopian or Steemhunt curators before the big upvote hits or vote for posts in quality tags such as #travelfeed, #utopian-io or #ocd-resteem if they have low rewards, a minimum author reputation of 40 and a minimum of 400 words. With some more effort it is possible to determine authors and the median voting time for maximum ROI automatically. Since there is little competition, curationreaper bots deliver a higher ROI than vote selling already, even with the current curation rewards being only 25%. If curation rewards were raised, bots would still outperform human curators, but this would increase the competition of curationreaper bots taking away rewards from human curators subsequently. Probably, we would see curationreaper bots that one can delegate to instead of bid-bots - I doubt though that raising curation rewards would achieve the goal of rewarding content based on its quality.

Probably, we would see curationreaper bots that one can delegate to instead of bid-bots

There is already, @nfc is pretty good at getting curation rewards by trying to vote on quality content.

Yeah, that's what I was referring to, I first noticed @nfc a few weeks back. I had the impression that @nfc votes early on authors who usually receive at least a few Dollars of rewards on this type of content

Your balance is below $0.3. Your account is running low and should be replenished. You have roughly 10 more @dustsweeper votes. Check out the Dustsweeper FAQ here: https://steemit.com/dustsweeper/@dustsweeper/dustsweeper-faq

Interesting; I had never thought of that before.

Since there is little competition

The reason there is so little competition is that only a tiny portion of stake can earn decent curation rewards with the total as low as 25%, For the vast majority of stake, the return from the 75% vote selling/bid bot/self voting share is always going to be a lot higher. That's simple math; it can't be any other way.

With curation boosted to 50% (along with the other changes) the math changes dramatically. The contest between curation and selling/bidding/self-voting at least then starts out even and not stacked 3-to-1. But the economics changes not only due to the 25->50 and 75->50 shifts (both are important here), but because dumb curation bot votes on mediocre or poor content that gets overvalued (as well as attempts to revert to self/paid/bid voting) has a greater chance to get downvoted, seriously harming the ROI, further pushing the balance toward good curation. But more importantly, the overall economic changes will likely shift tens of millions of dollars worth of stake from dumb voting to smart voting. The talent that will be brought to bear (both in terms of talented human curators and smarter bots) will be dramatically different. (Think NBA vs. neighborhood pick up.)

This is a huge change from the status quo. Not every aspect of the outcome can be predicted (it never can), but extrapolating from the current situation rather than thinking through the economics from first principles is likely to get things very, very wrong.

Not every aspect of the outcome can be predicted (it never can), but extrapolating from the current situation rather than thinking through the economics from first principles is likely to get things very, very wrong.

This is true, so let's look at higher curation rewards in action: Another advocate of 50% curation rewards is @heimindanger. A few months back, @dtube launched an experiment where they would take 25% beneficiary rewards and redistribute them to curators, effectively raising curation rewards to 43.75+%. The huge DTube upvotes on manually curated videos further raise curation rewards on good content.
Did it result in a huge increase of manual curation on DTube posts? I honestly don't know, it would be interesting to compare the curation activity on DTube posts with and without the raised curation rewards. From the fact that DTube has discontinued this experiment a few weeks ago I assume that it has not had the desired effect though.

The huge dtube upvotes distort the whole thing in my view. I can't really tell if anyone uses these apps (or curates their content) because there is real demand for it, or mostly because there is massive free delegation subsidizing it all. Is the game really about 'curation' or is it about catch-the-delegation-money?

huge increase of manual curation

Bear in mind that the goal (particularly of the poster here) isn't necessarily manual curation per se, it is changing voting behavior to be less content agnostic and less focused on self-enrichment with no real contribution. That could be manual curation, but mostly it means making the self-voting type stuff unprofitable so people stop doing it. If they instead delegate to even a mediocre (bot or human) curator, that is still better than self-voting and vote-selling (at least according to the poster, but I would generally agree).

As for discontinuing the experiment, the obvious question to ask is where is the money (which, again, is largely a game of catch-the-free-delegation-money) going now and why was that decision to move it made? It wouldn't necessarily need to have anything to do with the curation.

There still might be useful data there, I don't know.

Hi Kevin, I assume that some time after the introduction of SMTs the author/curation rewards in STEEM / SBD /SP will be removed from the blockchain protocol and will be replaced by a Steemit SMT. So new STEEM will only generated by the Witnesses, and STEEM will become a application centric "EOS-light". With this move plus the introduction of Oracles the Selfvoting and the Bidbots are gone, even Sell your vote is not longer possible, because Vote-Sellers are probably marked as bad actors in the Oracles. See also https://steemit.com/roadtosteemfest/@twinner/road-to-steemfest-some-thoughts-about-steem-the-steemfest-hattrick-raffle-inside

Hi @twinner. The proposal above consist of very low cost changes for most impact, which was actually very important earlier this year to stay on top, but now Steemit has slipped away in web rankings. Maybe it's still not too late. It's just the content-indifference that could be fixed. SMTs also do not have tweaks for downvote pools, curation rewards, and only have n and n^2 without any ability to support stuff like n^1.3 - they may all be important features for token customization.

@trafalgar addressed the concerns about plans to wait for SMTs / GPTs / etc:-

SMTs and Good Person Tokens will solve this - Problematic View

Maybe. Don't get me wrong, I think SMTs are great. But they're 6 months away and in reality, it'll take far longer for any of them to garner sufficient market confidence to really play a role in the content discovery process. The use of Oracles also impose very high practical cost and a lot can go wrong in reality. Basically they're very far off and a lot needs to go right for them to work effectively. Something like n^1.3, 10% free downvotes and 50% curation is just a lot more direct and simpler and easier to implement. Ultimately we need the Steem base token to have a functional reward distribution too, not just SMTs, which are a big If.

Hi Kevin, short term I also support your ideas. Lift curation rewards to 75%, then there is no need to sell your vote or delegate to bidbots.

I think changing only the curation rewards to 75% is in effect the same as what we have now at 25%. There's a symmetry. For example, 0% curation rewards is in effect the same as if we use 100% curation rewards. When it's 0% curation rewards, users will highly likely farm their own posts only, which is the same as if there's 100% curation rewards. It boils down to what the inflation is being used for. That's why we chose 50% curation rewards as one part of the proposal.

What a lengthy beating around the bush.
The main flaws are:

  1. STEEM is a premined shitcoin
  2. STEEM has a bad community.

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The most common problem that leads to failure of an economy is wealth inequality. When wealth inequality becomes too high the people at the top create rules/policies to make sure their wealth is protected so they can continue earning wealth, while the people at the bottom begin to give up because they see the economy can no longer provide what they need to survive because most of the already created and new currency is going to people at the top. This applies to all economic models, does not matter if those economies are created by governments or blockchains.

So if you want to make the STEEM blockchain more successful the solution is simple, you have to create rules that provide a more even distribution of the STEEM that is created. I would make the following two changes


Only allow 1 upvote per account from another account in a 24 hour period. Meaning you can only upvote yourself once in 24 hours and any other account only once every 24 hours. (this would not eliminate but improve the unequal distribution of newly created STEEM and you can post as much as you want, it would only be a voting restriction)


Make downvotes anonymous and also put the same 24 hour restriction per account on downvotes. I think most people do not downvote because they fear retaliation from bigger accounts.

The two above steps would be enough to attract users because it would force people to spread their votes out among many accounts. You can add another step if you want to make an extreme change by eliminating voting bots.


Create a captcha feature on the blockchain to verify every vote cast is being cast by a human, this would basically eliminate all automated voting and force people to participate.

There are of course reasons for and against this but basically a social network website is just that, a place for humans to socially interact. When a human buys $1000 USD worth of STEEM and rents that STEEM via a voting bot to earn interest and does not socially interact on that website that does nothing to improve the website. All they did is buy STEEM from an existing user and are now selling their vote, their purchase at the time may have increased the value of STEEM but they are not contributing to the long term success of the platform.

The real value of the STEEM blockchain are the human users who participate and interact on it every day. STEEM is worthless, it only has value when humans assign value to it, the more humans participate the more humans will value it.

I mainly upvoted the comment for the first idea of yours. It's interesting.

As for the 2nd, anonymous downvoting seems not possible with the blockchain.

As for the 3rd, captcha feature won't help at all or maybe help very little. There are a lot of anti-captcha services and it's quite easy for bot creators to implement an anti-captcha service into their bots.

Bots simply bypass the web UI altogether and interact with the blockchain via the API. They won't see a captcha nor need to circumvent it, thought they could if they needed to as you say.

You're right. It's a frontend solution and can't help in terms of blockchain.

Your ideas would kill any incentive to buy and hold Steem.

Holders of Steem would be losing 8% per year to inflation, with no benefit.

So what you are advocating is for those who can afford to buy and hold be forced to subsidize those at the bottom through the inflationary tax imposed by the system.

If holders can not at least keep up with inflation, there is no reason to buy Steem.

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Humans invented currency to be used as an exchange medium for goods and services. An economy is only successful if the majority of humans who participate in that economy are earning and spending currency. An economy begins to fail when the majority of humans who participate are no longer earning enough which means they are not spending enough, this is usually due to, too much money being earned by the minority and being held by the minority.

The STEEM blockchain is an economy, not exactly like an economy created by a country's government, but these same principals still apply. Currently the main thing that gives STEEM value is the social media website(s) that function on top of the STEEM blockchain. So if you want to ensure long term success of the STEEM blockchain you have to create an economy that will benefit the majority which will mostly be new users creating accounts on the STEEM blockchain.

In the future if tens of millions of more users sign up onto the STEEM blockchain and they start using STEEM as a currency to exchange for real world goods and services that will also increase the value of STEEM. That is happening a little bit now but most of the value humans see in STEEM is from the social media aspect it was designed for.

If holders can not at least keep up with inflation, there is no reason to buy Steem.

When a user buys STEEM, it may increase the price of STEEM vs another currency at that moment in time, but that does nothing for the long term growth of the STEEM blockchain. All that happens is STEEM is moved from an existing user X account to a new user Y account. If user Y does not participate on the social media aspect of the STEEM blockchain but only uses their new bought STEEM to earn more STEEM by selling their votes, they are not contributing value, they are extracting value. Not only that, they are only able to extract that value because other users who actually participate buy their votes.

The reason I proposed the 3 steps I did is because that is an economic model that would benefit users who participate on the social media aspect and forces all users to spread out their voting power to many users. If you want the STEEM blockchain to compete with sites like facebook/twitter/instagram you have to attract more users to sign up. New users will not sign up nor participate when the see the majority of new created STEEM is going to those users who already have the majority of STEEM that has been created in the past.

Talking to this thread is like talking to Karl Marx's ghost. Everyone thinks they can create an economy based on their own personal beliefs instead of an understanding of human behavior and economics.

  1. anonymous and cheap downvotes will kill all aspects of the social side of this platform, and will do absolutely nothimg to stop (or even influence) selfish behavior. It might stop some self-voting. But it will also incentivise downvoting every other post or comment instead. Downvoting everyone else creates an advantage. And that is far worse than we have now. It simply changes things from a positive (upvote yourself) to a negative (downvote everyone else.).

  2. anonymous and cheap downvotes will turn into political battles. No different than now, we have a tendency to upvote those we agree with, regardless of content quality. That would extend to downvoting everyone we disagree with. We see that now already even though downvoting is expensive. This would eventually kill any dissenting view other than mainstream.

  3. increasing users to give value to the coin. Sure. Increasing the user base will temporarily increase the proce of steem. But, your proposals (only quality content will be upvoted) will ensure that 90% of new users will not be able to earn. 90% of users will never be able to create professional quality content. So there is no reason for them to be here. They create an account, get frustrated, and leave. There is no reason for them to ever invest money in the system. Your explanation also compmetely ignores the need for buyers. If I AM able to make Steem here by creating content, I need a buyer so that I can use those earnings in the real economy. Without buyers who expect some kind of benefit from holding Steem, price will drop to zero no matter how many new users are onboarded..

At that point, it is a completely closed economy of people exchanging worthless tokens..

Talking to this thread is like talking yo Karl Marx's ghost. Everyone thinks they can create an economy based on their own personal beliefs instead of an understanding of human behavior and economics.

I am not basing my ideas on personal beliefs, I am basing them on math, human behavior and economics.

The current human behavior we are seeing on the STEEM blockchain is occurring because of the current rules that the STEEM blockchain operates on. If you want to change this human behavior you have to change the rules of the STEEM blockchain, it is that simple.

The only reason anything on earth has value is because humans assign it value based on wants and needs. Look at Facebook for example, it has a current valuation of about $400 Billion, if tomorrow every single user on Facebook decided to delete their account Facebook's value would drop to $0. A social media network has no value without users, if you want to increase value you have to increase users and reward them to keep them coming back.

Exactly my point.

And yet, this thread is about trying to change everyone's behavior based on the wants of a few witnesses instead of the needs of an entire community.

At least one of the proposals will kill Steem - because of economic and behavioral ignornace.

Downvoting is already one of the most divisive and damaging aspects of Steem - strengthening it will kill the coin.

You will introduce downvoting for profit. You will introduce even bigger flag-wars. You will destroy any possibility of a social site. Instead of people upvoting opinions they agree with, they will downvote opinions they disagree with. If will be a complete shit show... And it will do nothing to encourage quality content.

You need to remember - 90% of users are not capable of producing quality content in the first place. And if you arent going to let them share in rewards - then there is no reason for them to be here...

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Furthermore, even if you have some effect on slowing down self-voting, all you will do is transfer votes to the most popular users - not to those who produce the best content.

And who will be the most popular users? One of the criteria will be those with the most SP.


Because people are more likely to interact with a user who is capable of returning a large upvote...

We already see that now. Those with more SP, bought, earned or otherwise, are sought out to interact with.

...and a site that only rewards the most popular or mainstream opinions is a site that successfully self-censors...

(Nevermind the chilling effect of downvoting)

very interesting ideas, I think they are really going in the right direction !

As a content creator I wouldn't mind increasing curation rewards especially if it created more engagement on posts. I think the network that grows around me through this will balance out any lose. Now it seems that most users have more incentive to just farm way their votes and this is reducing the desire for users to create the good content which I was hoping would be a cornerstone of Steem.
I'm afraid it will be difficult to get consensus on any of these changes seeing as many of the people who have the power to implement them are profiting from how things are. So why would they want to change things?

Great post, Kevin. Thank you. Discussing these issues as a community is how we'll eventually see improvement. It's also nice to see this show up as a Github issue. I also see from these comments there's a discussion on a community Steemit repo as well (very cool!).

I'm willing to support some changes to see how it plays out. I'd also be willing to move things back again if the results end up being worse than what we have now. The tricky thing about these changes is we'll never get complete consensus or make everyone happy. When Facebook changes their UI, people lose their minds. Imagine what will happen when changes are made to "their" money making machine, the Steem blockchain?

As I read through the comments, it does seem like the lack of downvotes significantly contributes to the problems we see. I like the idea of a separate pool for downvotes, but I was also just thinking maybe we need an interface change like this when reacting to content:


Only the first two icons would be a positive vote. The other three would be negative. Instead of using emotional faces (a "good/valuable to the community" post may make someone angry, but it should still be rewarded) we might use a payout scale with money based on a combination of the current pending payout of the post and the additional value the voter can bring. So if a post has a huge potential payout but someone thinks it should be much less, then (depending on their stake weight), they'd select an entry on a spectrum which fits what they'd prefer to see ("That post isn't worth $50, more like $10"). Larger stakes could bring something all the way down to zero (but not negative, if that's not their intention... a "flag" action could be kept for that which is designed to hide the content and decrease the reputation of the account).

Clearly an interface change alone won't help, but I also don't think the current proposal of 50/50 rewards, n^1.2 or 1.3, and a separate pool will help without also implementing an interface change to (over time) remove the stigma of "flagging" and recategorize it as part of the curation process to send accurate value signals to the community.

A datapoint for my position is when the downvote became a "flag" in the interface. That changed people's behavior over time because it changed their belief about what a downvote is.

Hey thanks for dropping by @lukestokes and considering the proposal. Perhaps a UI upgrade to take care of downvotes/flags is necessary. Maybe just make it like reddit's? It'll certainly become more effective with a separate downvote pool and a non-linear economy.

Re: emoji-based voting - has this been tried in any other platforms out there? (that involves $$$)

Are there any other (surviving) $$$ platforms out there? Seems many are gone. :) I'm not a graphics designer, so that was just an example. Maybe something like:



I'm currently been flagged, for this last 2 days very aggressively, and all because I'm posting things that upsets them.
Free speech offends, or something..
I'm posting some political humor cartoon - some npc stuff - , and they are now flagging everything I post, nearly (@bloom).
I'll keep doing my thing, but this kind of behavior will drive even more users away from steemit.

I'm not sure if this helps, I'm just here asking for some support of the 'big boy's'...
Retention is already big enough problem here, I think.
Punitive action for free expression? ( not hate, in any way - but argument ) This is not conducive to growth, (imo).

Unless the agenda for growth, is a left leaning political stance platform, like twitter and facebook..

Any show of support at this point would be very welcome !

I have had great support yesterday off lots of users and haven't lost too much right now with their upvote support.

Being down voted $3 or 4 dollars a day, for writing things that are humorous ???(even if you don't like the humor), basically is a big disincentive to stay on the platform.

I'm not going anywhere, (over 12 months now! wooohooo) ....but if I was a new user? - I would be gone after this attack for no real reason.

Downvoting is a dangerous ,double edged, sword..

Upvoting is a dangerous ,double edged, sword..

I could spin the narrative that way also. What if we upvote the "wrong" content and all that shows up the trending page is total crap. What if new users see that and think the Steem blockchain has terrible content discovery and is just a bunch of circle-jerking nonsense?

People leave for those reasons also.

If you choose to engage in political humor, "meme wars" or anything which might put you in the category of "the bad guys" from someone in an opposing category, well, I guess all I can say is...

Some people are so tribalistic that if they see an NPC meme, they see fascist and think flagging and attacking them is like storming the beach at Normandy. They may even think they are doing god's work.

In online social forums, spreading political memes is a risky behavior. Thankfully, you will never be fully censored on this blockchain. Someone may have to click "show" to see your posts if your reputation goes too low, but you will never be censored because your content is always on the blockchain forever. This is a censorship resistant platform. If people want to spread memes that anger other people, then okay, that's their choice. It's also the choice of those who are angered to use their voting power to express their disapproval.

If centralized services like reddit, 4chan, facebook, etc are better platforms for them to do their thing, then okay. But all of those can shut your account down completely. Can't happen here.


Well, good luck with this. I’ve been calling for two of the three things mentioned here since early 2017. But it’s not part of STINC’s grand plan (and we don’t know what that is), so it’s not likely to happen. All anyone wants to talk about is how SMTs will fix everything.

In my opinion, SMTs will only trash this place up at a faster pace.

I also think that maybe social media interaction isn’t something that needs to be a paid activity...since nearly everyone does it for free anyway. It’s a fun idea, but I don’t believe that it’s at all attractive for actual investors. We may need a better model - a better way to allocate the inflation tokens. And yes, maybe reducing the number of them again is a good idea as well, since there’s very little utility for SP...other than for “curation” (allocating inflation tokens), witness voting (allocating inflation tokens), and then simply collecting inflation tokens.

Allocation of inflated tokens isn’t the end game here, is it?

SMTs will fix everything.

Well, at least the bots are waiting to utilize them since the actual humans have left.

Yes it's not the end game, although I guess the protocol should at least be in favor of getting the inflation allocated better than what we can today as soon as possible..

It's either that or turn (most of) it off and pivot to selling the blockchain on its non-reward merits. At the moment the reward system isn't much of a merit anyway.

I think content and reward are huge merits over plenty of the other blockchains out there with similar tx times / fees as well, for example Nano which is close to Steem. Just has to be done right I guess. It's a bit of a mixed message, but likely doable (marketing both its non-reward and reward merits). Steemit being at #2000 still counts as something. Bit of a missed opportunity to get it within #500 in the early stage but maybe still not too late.

I'm not disagreeing. I'm just saying that a dysfunctional content and reward system is the worst outcome. All of the costs with minimal or no benefits. This isn't the end game either, if we don't change the incentives. The dysfunction will continue and it will only continue to get worse.

Yup, understood. Nothing can be worse than the current situation. Looks good short-term, but worst outcome in the long-term. If Steem ultimately can't work on its content/reward merit even after the proposed changes, along with content-based SMTs, do you think it's still able to stand out well enough compared to the rest? I still haven't put much thought to that version of Steem.

I don't know.


Subsidize downvotes (cheaper downvotes, separated pool)

This sounds somewhat similar to @transisto's suggestion way back. I've had it in mind to create an off chain solution using a community flag account to achieve this but, unfortunately, lack the time nor funding to really make it a thing any time soon.

I had unvoted you as witness when I noticed you had what I would call apostacized to vote farming / selling as I had formerly understood you were against such practices.

Reading your post, I understand why you did that and personally cannot fault you. I think you and I may think somewhat similarly albeit our stake being at different levels. I am but a minnow and have invested in Steem with apprehension understanding the economic flaws and how my ethics would place me at a disadvantage compared to my peers.

I still feel this way but because of my technical aptitude and still considering putting more money in to support the communities / projects that I am a part and banking on my skills and engagement to set me apart from the greedy.

Still yet, is there hope for my kind if the top 20 do not make a change? It's a difficult decision and the inflation is concerning when it is so easy to abuse the distribution of rewards towards activities that are essentially meaningless.

All things considered, I think you put forth some very compelling arguments for the witnesses to consider and thank you for that. I have decided it is best to add you back to my witness votes as a result for what it's worth.

The current economy is directly incentivizing spam and abuse across the board. I think previously I was just seeing the result of the equation (as in economic incentives provided by the protocol) and thought the culture should change. Then later I was convinced by @trafalgar's argument that it's just a matter of aligning profit maximization to valuable activities that should be rewarded the highest. We can have very engaging and fruitful communities off the chain, but on chain the best way is to just vote-farm to keep up stakes with the rest, which is an unfortunate situation. If they only fix this a couple years from now, other communities that don't have Steem's best interest would outgrow users who did not participate in vote-farming by a long mile. Tough call to make really. Maybe the best question most builders on the platform should ask: why fight a misaligned economy out of your pocket?

I dont understand how your proposed changes fix anything.

If you add higher curation reward, now you will upvote only for the curation reward and farm that way.

If you change to a nonlinear reward model, whales become more profitable than new and small users.

If we encourage a culture of downvotinng it will just be unpleasant over here.


Good point.

Hi @knircky, much appreciated that you dropped by.

We're proposing something along the lines of "A + B + C = D", where A, B, and C are the items in the proposal, and D is the goal of a Steem economy that favors curation enough to beat vote-farming activities. More profitable curation services will emerge out of this and we'll likely have a better platform. A, B, and C must be considered as a whole and not in isolation. We're not saying that changing A results in D, nor change in B results in D, nor change in C results in D. It's really the best of both worlds - both fast and slow activities can coexist on the chain.

Please check out @trafalgar's responses above and we'd appreciate if you can go through the reasoning we've put forth in tandem. In regards to your concerns, I've almost directly responded to these points here: https://steemit.com/steem/@kevinwong/understanding-steem-s-economic-flaw-its-effects-on-the-network-and-how-to-fix-it#@kevinwong/re-donkeypong-re-kevinwong-understanding-steem-s-economic-flaw-its-effects-on-the-network-and-how-to-fix-it-20181016t060251734z

The downvote pool makes sense in the current scenario. I have also seen the steemcommunity implementation. I didn't spend too much time looking into it as I am not clear about few things.

  1. Communities : What happened to them ?
  2. SMTs

Both communities and SMTs may change the behavior of the platform I am assuming that it will be even possible to implement features like down votes within the scope of "communities" & then use an SMT / Token as opposed to Steem itself.

Let me deviate a little bit here. The way currently the platform works where Steemit, Inc stores everyone's content including those can cause DMCA either in their S3 image stores and even in witnesses in their servers will eventually have to change. Right now interfaces like Condensor is hiding objectionable content using rules in the front end. Eventually the storage outsourcing has to change. (This is not something I came up with after the layoffs etc.). I have written about it in the past ( https://steemit.com/steemcleaners/@bobinson/scenario-dmca-takedown-of-steem-blockchain )

Coming back to the rules, I feel the specific rules should be imposed by either dApps, communities or SMTs and should act like a smart contract imposing those rules as opposed to the token and blockchain STEEM imposing the rules. When we say that vote farming is bad, we are defining the ethical and moral code. Yes, it also impacts the overall economy of the system. But, if its possible to create independent silos where vote farming is allowed, porn is allowed etc and limit those into specific scopes then the economic problem of Steem as such will vanish. Now, since imposing rules like "down_vote_pool" by a certain community/dApp/SMT will use their computational and storage power on the chain which is now defined by Resource Credits. This further means, the more rules the "silos" apply, the more RCs they will need which will inturn increase the demand of Steem and pull up its value.

Right now to be very honest I have no idea how the roadmap looks like. For example I know that we are moving to Hivemind but for me that also meant communities but not sure whether its happening or not.

So, for the sake this discussion, we can assume that there are no SMTs and no communities and no smart contract like feature to impose rules. In such a scenario, the downvote pool does seem like a good idea.

Thanks @bobinson. Please check out trafalgar’s comments (especially the top comment here). Even with SMTs and communities, they will take a very long time to take effect, and there’ll still be core Steem distribution anyway, until they remove the rewards pool. All of these are a big IF.

Just think of Steem as an MMORPG with SP as some buy-in weapon or levelling mechanism. It’ll have proper value if the game works. And it very likely can - just align the path of profit maximisation to that of the benefit of the platform. Now it’s just not working. I’m pretty convinced by increasing curation rewards, moving away from linear, and having some “free” downvotes will solve the problem. As per the 3 items proposed. Just need some devs convinced about this as well. It’s the only thing I talk about the whole year and even flew halfway round the world to SF3 to remind people about it. Honestly we think it’s just 1% of the effort required compared to SMTs for turning the tables of a completely dysfunctional content discovery and rewards platform.

Anyway, check out trafalgar’s comments around here. Honestly I think he’s one of the smartest and most rational investors around.

After discussing with many others, I tried to collect and summarize the overall sentiment and propose a change that many should agree with: https://github.com/SteemCommunity/steem/issues/11 I will edit the issue with more information as discussion evolves.

Thanks a lot @reggaemuffin, much appreciated!!

I sometimes wonder how long will it take for me to consider jumping to another fork if someone repackaged STEEM and trim away all the shitty parts of it with a new genesis. And what are the reasons for me to continue using this platform "just because the going is still good now".

I highly value the community members and friends i found on this blockchain. And the distribution machanism of STEEM makes it a fertile ground for Dapps which are highly underrated when you compare to the "Windows 95-esque" dapps built on other more hyped-up blockchains.

That said, however, with each passing day of seeing instances of vote farming, I die a little bit inside. It's hard seeing the democratically voted witness not acting in the best interest of the whole but themselves.

My account might have next to no stake, but you know I'm 100% with you on this. Simply because i don't see another way to make Steem truly the gateway blockchain where that i can redpill my aunt with.

Steam is a fast and fee-less digital token (named STEEM) that enables people to earn money, provide a scalable blockchain protocol 1 for universally accessible and unchanging contentBy using their brain (what can be called "proof of brain"), the two building blocks of this protocol, both blocken and token, depend on the reliability and long-term security and the integral part of each other's existence. steem has been successfully managed for one year, and it has now passed both the Bitcoin and Ithriyas to the number of transconsion. 3

Comparing with other blockchains, Steem is the first publicly accessible, in that case, with the databases-built incentivization system, as a content stored in plain text. It creates a public publishing platform, from which any internet application can collect and share information, which contributes to the most valuable content

Among the fields of crypto-currency, STEEM's unique features compare it to both "smart" and "social", such as Bitcoin and Ether. These two new token features originate from A pool of tokens dedicated to creating the first material and encouraging the carriage (called "the prize pool"). The second is a voting system that highlights the wisdom of the crowd to evaluate content prices and to distribute tokens. These two unique features are combined when called Proof-Off-Brain, which is a producer based on Proof-Off-Work 4, which emphasizes people's work in distributing tokens to public partners. STEEM in the evidence of the brain is constantly encouraging the members of the growing community to create social value by which their members build prizes as building materials.

As well as this development of Steve, the system provides improved advanced features such as Stony account recovery 5, escrow service, user-promoted content, a reputation system, as well as in addition to the progress of Blockken and Token Technology. This is when the second confirmation has been given to the users on all three transactions and zero transactions. This allows publishers and community builders to support the mission to bring smart and social currency across the internet

At first I didn't agree with the idea of non-linear rewards because I had patience and hope that SMTs can save the day. The problem is SMTs will not arrive until 2019 and Steem economics right now are completely dysfunctional. It's very hard to support a platform which is neither sustainable nor rewarding high quality content. The Steem of 2017 with all it's flaws at least was rewarding high quality content in exchange for those flaws. Now the quality of content even if it's still being generated includes high quality it is a situation where the discovery process is pretty much non-existent.

The best content cannot be discovered or rewarded. In other words there is not much reward for blogging or generating content no matter how high quality. If the reward scaled up with the quality then it would favor the generation of higher quality content over time but unfortunately I'm not seeing this.

So I could just as well post cat pictures and upvote myself each day to get the same kind of reward I would get if I post a 5 page essay. This isn't to say that cat pictures can't or shouldn't be able to be rewarded or even be the top rewarded on the trending page but it would have to be a very special cat picture is my point (very popular).

It is impossible for the platform to reward high quality content.

First of all, you will never attract creators with any talent to Steem. Best case scenario, is to provide a place that might reward a content creator as he is developing his skill set - and before he goes mainstream and moves on.

Second, most users aren't very good at picking out high quality content.

Third, "high quality" is subjective - you will never get anything close to a consensus as to what constitutes high quality. For example, younger audiences prefer political memes to political essays. Which one gets the upvotes is more determined by demographics than content quality.

Fourth, you will never get people to upvote a 'stranger' over upvoting her 'friend'. This is a form of social media. People will reward friends and family members first. (As they should).

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yeah you are right but I think when someone invested his money on steemit. He always will make such thing like self voting to at least get his ROI.
The greed is in human nature and we cannot remove it. I think there should be some ways so that everyone can earn rewards as well support the deserving people.

It's not greed. It's logic.

It's an investment not charity.

Hi @kevinwong
I am afraid that by rewarding curation at a higher value, will just lead to a different bad behavior, people will just vote for the same posts that traditionally get high payouts, to try and maximize their curation rewards, good content will still not be discovered. Further to this, people will also receive curation rewards for self voting, and if they buy bits from bidbots, their self vote curation will even be more profitable. Why can bidbots not be banned?? Bidbots, make a joke out of the reputation system!!

Hi, thanks for your input @rynow.

Bidbots are a result of a pure linear rewards system. It's easy to price votes and sell it out or exchange, hence providing an outlet for maximum profit with least effort. Yes you may be right that curation alone won't help. The proposal cannot be taken apart and have each elements considered isolation. With the three suggestions together, the aim is to just make it more likely that voters use their SP on curation rather than reserving it for themselves like we've in the current economy. It's easier to stomp out bad curation too under the proposed changes.

I really hope it will work, and that we will see the end of bidbots.

Its ironic to think that steem inc wanted this platform to be fully decentralized yet not listening to "decentralized" thoughts and ideas as inputs from whales who care. Because not even a single steemit-connected whale dares to share some views and plans.

But lets give it a wait then.

Just to prove a point. I upvoted you, please upvote me back 😂

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lol. hope they fix this thing

Looks like an almost working V4V implementation to me :D

Amazing work. Good job. I followed you, please follow me back. 🤣

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Oh the gall!

How's this for fixing? I altruistically upvoted every comment in this chain. Now, in the glow of warm fuzzies that gives ya'll, if you somehow happened to..... 😉 [was the implication clear enough? what if they don't vote me back? I just threw $0.25 SBD in the trash! I'm sure karma will look out for me...]

Wow! Your pocket even deeper! I upboat you now! I followed you! Please follow me back! 😂

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Wasn't expect this "prove a point" get chained! Keep it going guys! Upboated you! Please upboat me back. 🤣

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Content indifferent behavior is the bane of this system. No social media platform can survive if it's unable to at least sort exposure and rewards by some subjective standard of quality.

I fully agree with the diagnosis. I'm not sure about the solution proposed here - for instance, I don't quite see why linear rewards are a problem and going for something like 1.3 would improve the system. I do think downvoting has powerful social costs that should not be left out of the equation.

I am convinced the problem should be addressed, it is essential it gets addressed. In my mind the way to go is not to "tweak" the curation parameters and the downvote incentives. In my mind the current steemit system only has a monetary layer and it misses the social layer.

I believe the solution is more likely to come from overlaying a stronger non-monetary, social system on top of the economic one

For n to n1.3 has a cost of inequality, although not as extreme as n2. What we want is just 10% of the cost of n2 for 90% of its benefits. The benefits are:-

  • It'll force any content indifferent behaviour to congregate, making it manageable to regulate with community votes. Under linear, anyone can just split into very small accounts and farm as efficiently. But these days, no one even has to bother splitting because it's futile and too costly to flag.
  • It'll destabilize the pricing of votes. It's straight-forward to price votes in the voting market under linear. Exchange a $100 vote for a $100 vote, selling away a $100 vote for 90 SBD, etc. Just depends how low a price the voting market is willing to go. So currently we have a perpetually discounted pool of Steem in the voting market (bidbots, vote-exchange deals, etc) and should be mitigated.

It's a matter of economic incentives. Check out @trafalgar's recent post and thread on it.

Thank you, I have read @trafalgar's post and commented on it too.

Ok, maybe the 1.3 or 1.25 could "nudge" in the right direction, it's probably worth trying.

It's not that the economics cannot be tweaked and improved by doing so. It can, although expect some of the tweaks misfire and lead to other unwanted behaviors.

One thing that might be worth considering is that at this point the reward/risk ratio for tweaking the economic incentives went "below" the equivalent ratio for implementing more social features. "Below" in the sense that the reward for the latter is higher and the risk lower than for the former.

Example: you are kevinwong and I am sorin.cristescu. I've watched a youtube video where I saw you on stage with andrarchy at steemfest 1. You are a real person to me, thus I am a lot less likely to flag you if I don't agree with you - I automatically granted you the respect owed to another fellow human. It's not the same if you were, say, @xyz987 with no avatar picture. It would be even worse if I could act hidden behind a random pseudonym like @bla42.

What I mean is that a conversation between @bla42 and @xyz987 has much more risk of descending into a flame war and name calling and flagging and disrespect. And with disrespect come reflexes such as "it's ok to steal from that scoundrel I don't respect"

Also it's psychologically much easier to be a spammer and a scammer when you hide behind a random pseudo like @bla42 or @xyz987 than when you walk here under your real name.

Not sure I'm being very eloquent here ... I hope you get my point.

Let's work together on some sets of shared values (a set per community) and then offer both economic and social incentives for users to adhere to the set of values they prefer and then stay true to those values because it will be in their best self interest. So yes, economic incentives, but reinforced with social incentives

I do hope that the top management of Steemit will take seriously the proposals put forward.

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The scary/beautiful thing about Steem is that there is no real "top management". Steemit.inc try as they might, no longer holds the helm of the Steem Blockchain. It takes overwhelming consensus (95%) of the top 20 voted witness to exact change.

And in this case, knowing what @kevinwong proposed and knowing who the top 20 witnesses are, I think 95% is highly unlikely at best.

I agree with this proposal. Curation rewards should be higher but they alone are not enough. The system should not be as easy to game as the current one. It's worth trying out.

Very nice with solid reasoning! You have done so much work for us! The structural setup will have impact on people’s behavior. A good structure would influence a better eco system for all.
Thank you very much for sharing!
All the best.

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Thanks! But the work is really in the developers and witnesses who can afford to get it done! (making code and educating the community on the changes that need to happen)

It seems entirely possible to me that the cryptocrash has caused the community to become selfish in order to recover from the mass losses. I hope the market returns soon and brings out the kindness and compassion we had in 2017

The economic incentives are flawed. People will always be people.

I highly disagree with a separate pool for downvoting. You can't expect the platform to get better by cutting decentralization in half and giving whales twice as much power.

I also suggested non-linear rewards the second I touched down on this platform 10 months ago. I had no idea it had already been attempted and abandoned.

At one point I also came to the conclusion that 50% curation was a good idea. Now I realize that the curation lottery is an easily gamed system as well. Anything with set rules will easily be gamed.

The system we have now works perfectly. It is the simplest most straightforward option as the foundation of the platform. Introducing these new "solutions" to the problem will only allow the system to be gamed even more by those who understand the complexities of it. As you already know, whales are highly motivated to do just that.

The solution isn't in changing the foundation of the Steem blockchain, it's building on top of the anarchy to create order.

The single most important thing that this blockchain needs is a decentralized reputation system. We need a way to organize big groups of people that all share similar crypto ideology. We need to be able to measure who is trustworthy and who is not. This is all that matters: trust.

None of the solutions you've presented will force anyone on the blockchain to be more trustworthy. Unless we can come up with a rule that's as solid as POW or POS or DPOS it isn't really worth hard-coding into the foundation. :(

Our proposal atm is a 10% separate downvote pool, a contingent to the other two measures which is 50% curation, and n^1.3 reward curve. Gamed or not, n^1.3 forces congregation of posts with substantial payouts and makes pricing of votes less predictable than linear. It's a more manageable playing field for any regulation to take place. Nothing can be worst than what we have now as content-indifferent behavior gets rewarded the highest. In the end, it really depends if you agree on the problem statement and solution.


Now is not the time to be changing the core dynamics for how the platform operates. Complicating the rules even further will simply reward the users who are best at gaming the new rules. It most certainly will be worse. It will be even more centralized.

You base everything on the premise that self-upvoting is the most profitable action. This is false. Working together to give the platform more value is the most profitable action. These solutions will not promote synergy. It will be more of the same.

I would implore you to read that post where I directly respond to your proposal. Occam's Razor is our friend. Adding more variables is counter productive.

This "economy" is not flawed. It works exactly as it was designed to. I think the problem you're having is ideological rather that economic. If you read the white paper closely you'll realize that Steemit is 100% capitalistic. I mean 100%. That's more capitalism than any other so called capitalistic economy known in the world. In the U.S. economy we have a fair amount of socialism. Many services are subsidized by the government in order to equalize the playing field. Ned Scott had no such intentions for Steemit. It's 100% either you have money to invest or you don't. The more money you invest the more money you will make. The only guarantee that a potential investor has that they will get a decent ROI is self upvoting. so long as Ned Scott is driving the ideology behind the development of the Steem blockchain, this will remain the same. Self upvoting is at the heart of how Steemit works and it's not going away.

As an alternative to self upvoting, I created SteemAX via @learnelectronics. I'd recommend taking a quick look at my article in which I propose that disproportional vote exchanges are not only more profitable, they're more ethical. Creating the ability to trade votes is the same as creating an open market, a capitalistic concept, whereby the one and only good in this system, STEEM, can be traded at different ratios. However, what's really being traded isn't STEEM, but faith in each other's quality. A disproprtional exchange of upvotes not only creates better ROI than self upvoting for the one on the good side of the ratio, it creates a much better opportunity for a whale to get a larger share of the curation reward as well as a small return on their upvote value. However, this only works out for both parties if they post quality content others also want to upvote. Just getting into a single exchange requires the two parties interact, which is more than can be said for bid bots, self upvoting, vote farming, etc.

You are wrong if you think self voting gives highest ROI. Invest in trust and relationships gives the highest ROI in the long run.

This is true. But that's not what I said. I said

The only guarantee that a potential investor has that they will get a decent ROI is self upvoting.

The operative word here is not "highest", it's "guaranteed".

Also, please read my article, which I linked to above. I think I explain myself well.

Was it designed like that?


Is that design flawed?


Or you mean to say a design can't be flawed?

I mean to say as far as @ned and Steemit Inc are concerned it's not flawed at all. As far as @kevinwong is concerned it is. It's a matter of perspective taken from one's ideology. This is not @kevinwong's idea of a "good" economy. But would @kevinwong then be sitting with the likes of Karl Marx, Jean-Jacques Rousseau, or perhaps even Wilhelm Weitling?

I support increasing curation rewards, but not in combination with non-linear rewards.

I'm neutral on the flagging incentives.

I don't think anything will help as long as our largest stakeholder do not understand the difference between stacking coins and building a business. They continue to confuse the goals of building value with stacking the number of coins.

Too many stakeholders are confusing altruism with building value.

If we combine a non-linear with increased curation, the result will be auto-voting to those we expect to earn the most and even less curation.

Personally, I am starting to think the lack of distribution combined with limited business experience within the large stake-holders is a fatal flaw.

@kevinwong I'm new to this platform and I quickly noticed some problems you referred to.
Today you received one more vote as witness from me in hope you change this.
Thank you.

Thank you! I've been trying but the higher ups don't seem to see the problem. It has been reported since earlier this year

I do agree that the lack of incentives to downvote imbalances the platform.

Maybe install a mechanism to reward good downvotes too, but this is pretty dangerous actually.

I'm 45 days short from my first post anniversary. I have been practicing none self upvote, thought that I'm a hero giving all my votes to everybody except myself, until HF20 that screwed everybody including your good self. Since then I decided, why would I bother if my steemauto are distributing vote when my voting power fall below threshold? On the first few days after HF20 I get literally nothing from my posts. People are begging for votes whilst quietly accumulating their voting mana that point of time. And then I found out that time voting mana dropped so much slower then RC, I placed steemvoter to full upvote all my comments and my posts. I've got a very happy few days until they change it back to VP and once again I screwed myself down to almost 0%VP when I forgot to turn off my steemvoter to vote all my comments.

Now, I still have my 300 following list to upvote in my steemauto. But I do remember to have my steemvoter to self vote my own article 15 minutes after published.

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It wasn't HF20 that changed the economic incentives we experience today, it was middle of last year's HF.

The article identifies problems related with content discovery. But lately we see that Steem is not being used only for blogging but some other purposes as well for example actifit. In these cases the contents are more or less monotounous.

And there will be other applications that may be focussing on other applications than blogging.

So any proposed solution also has to balance in such a way that non-blogging apps are not discouraged.

Yes what you’re saying is a fit for SMTs where linear can be used, Steem itself should move away from linear.

In that case don't you think even current applications be converted to SMT, when SMTs are out, each with their reward plan and use cases e.g. steemit-SMT, DtubeSMT, busySMT and backed by their SP holdings supported by BANCOR convertibility and liquidity.

And steem based reward mechanism is completely abolished. Then this entire issue rest at peace.

And at that point, anyone who holds Steem will lose 8% per year through inflation.

Every economically literate user would sell..

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Emitted steem tokens due to inflation be distributed to the activity under that SMT

Where will you get the investors to buy the SMT's?

Tokens will still need buyers. Steem will still need buyers. Otherwise everyone has coins and tokens that are not worth anything.

The biggest concerns that the stakeholders should be worried about is here are utility, and ROI for investors ..

All of the suggestions above are designed to lessen ROI for investors.. If they can not make a better return here than they can elsewhere, then they quit here and take their investments elsewhere.

SMTs that are providing utilities and have developed community - will at the end have to have more SP in their account to develop their ecosystem in order to reward their investors as well as their community members.

This will increase demand for steem hence price and the rewards for investors

The only difference in current model and SMat based model is value creation is further decentrlized within steem ecosystem

Downvoting should be better incentivized, so that the site is properly moderated. Maybe that's what you meant by subsidize downvotes...didn't have time to read all your post

Yes, essentially making it less costly to do so.

I really support the Curation rewards set at 50% and more incentives encouraging downvoting. This place won't grow merely relying on the goodness of peoples hearts for action

Downvoting is already an abusive problem... why make it worse?

Because downvoting is irritating but the problems discussed in this post are serious enough to affect the whole economy, and even threaten the survival of the platform. Downvoting has never done that and it is very unlikely it would ever do that (essentially impossible).

Given the choice between irritating and failure, I'll take irritating. Making the wrong choice on this is one the biggest mistakes that has ever been made here.