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RE: HF21: SPS and EIP Explained

in #steem4 years ago (edited)

Personally, I just can't believe that none of the ten percent of the funding for the SPS is coming from the witness portion of inflation, which remains unchanged.

Even a symbolic 1 or 2 % would have gone a long way to showing that we are all in this together.

Instead, it all comes directly from content creators. When will it be understood that without content creators this platform will wither and die? Why should content creators alone bear the burden?

Note, I think the SPS is a good thing. My issue is the funding. Just in case anyone goes all 'straw man.'


"Even a symbolic 1 or 2 % would have gone a long way to showing that we are all in this together."

Great point!

1% would be a 10% reduction, and 2% would be a 20% reduction. Would these be catastrophic? Perhaps not, but when the current level of witness rewards were set (as part of a previous hard fork which already cut them by 80%), that was done with a goal of maintaining a safety margin in case of realistic but pessimistic scenarios on the Steem price and operational costs. 10% or 20% reduction would be a big hit to that safety margin.


  1. Desire to maintain the core blockchain operations at a safe level
  2. The poor performance of the content reward pool in numerous ways
  3. The observation that SPS and content rewards do the same fundamental thing (both are proposals to be paid by stakeholders for contributing something of value to Steem) and should therefore be considered on the same "budget line" so to speak.
  4. The reward pool already funds proposals of various sorts, developers, community projects, marketing, etc. not only "content creators". Post-fork these can shift to SPS which again means that the two pools ought to be viewed as shifting on the same "budget line" (projects using SPS instead also means leaving more for content creators, in rough terms offsetting the shift).

many witnesses and stakeholders, myself included, view the proposed split as the best tradeoff, despite what may seem like "unfairness" when viewed solely from the perspective of this group vs that group. Sometimes perceived "fairness" can and should take a back seat to function and good economics, particularly when you are talking about an arguably failing project which if it continues on its current trajectory is likely going to ultimately result in no one getting anything.

Finally, it may be a hard truth to hear, especially for community members and content creators such as yourself or @meesterboom who absolutely have contributed a lot, but the content reward pool by design is supposed to be an engine which drives Steem's growth, not only with literal "content" but by attracting and retaining a growing community of people who contribute meaningfully to Steem. Sure there are some who do this, but as an overall mechanism, it clearly hasn't worked and on that basis alone is a prime candidate for having a slice of its budget reallocated to better use (or at least different use with the potential for more value add).

Witnesses, by design, are supposed to securely and honestly sign blocks to maintain the integrity of the network, securely and honestly adjust blockchain parameters, and approve hard forks (which in practice includes some consultation with developers on what is included in hard fork proposals). That portion of the system has generally worked, including at low Steem prices, and most if not all of the current witnesses are doing these things well (this hasn't always been the case).

The bottom line is that witnesses are mostly (if not all) doing their job; the content reward pool has not been doing its job. Looking at this from the perspective of what is best for Steem as a whole, the reasons for the proposed adjustment to the budget ought to be pretty clear.

Different adjustments can be made in the future with the benefit of further experience.

Might I suggest we incorporate the Ferengi Rules of Acquisition to our HardFork21 code?

Thanks for taking the time to reply. Your arguments are valid and well expressed.

Honestly my biggger concern is the new voting curve which I think will severely damage my ability to reward commentors on my posts. I've spent most of my 3 years here trying to encourage engagement and incentivising real human activity.

Will changing the reward curve destroy other business models? If the problem is bots aren't there other coding solutions? If the problem is self voting are there not coding solutions to limit that activity?

I've read of others delegating their Steem Power, buying stake in Palnet and moving their activities there.

I'm keeping my eyes open, trying to learn and staying ready to make the needed moves.

The curve is an interesting question for sure. I personally believe there needs to be some curve, but not necessarily this exact one. The Steemit devs have studied things carefully and have their own presumably good reasons for proposing this particular curve. I'm pretty open minded on this particular aspect of it and will be looking to engage with both Steemit devs and the community on the matter going forward.

If the problem is self voting are there not coding solutions to limit that activity?

Not directly, since people can always move stake to different accounts, and generally tiny payouts are a huge burden on people trying to catch milkers/self-voters (who aren't always literally voting for the same account but may be voting for accounts of other friends/collaborators or sock puppets).

I'm sure your own efforts are well-indented and may well contribute a lot of value, but apart from AI (if even then) there is no way for a computer algorithm to tell the difference between your tiny votes and someone working with some friends/sock puppets to milk the pool to death by a thousand cuts, so we need to put some sort of speed bump in there.

Thanks for the raising the issue.

Thanks to you. Seems like a plunge into murky waters. I was wondering if each Dapp couldn't have their own reward algorithms similar to what has done.

That is one way things can work. Individual apps can have their own tokens, algorithms, and eligibility policies. For example they can easily ban anyone they want, which is one way to address some of these problems but is also much harder to do at the core level of a public blockchain.

Well, and that's the big problem. The biggest positives in the communities I'm in is that personal engagement: People reading, responding, and voting on things in comment sections they like. That's the way in which steem most resembles social media. This change is throwing the baby out with the bathwater. I'm told there are tremendous abuses of the rewards pool going on. Undoubtedly this is true. But this change has too large of an impact on the best of steem's ecosystem. This change must be struck down. I'm doing everything I can to get the witness votes needed for a different top 20, but it certainly feels like there's a wall of rich people making the decisions for us. I've invested what I can afford into steem. They happen to be richer. That doesn't make it right. They're pulling the rug out from underneath all the target demographic. You want to attract the masses? Make Steem attractive for the masses. Not for the Steem whales. Their incentive to behave well should be that they want the value of steem to go up, because they already have a lot. Changing the system so that they can acquire more steem is not going to make them behave better. They'll just have more power to come out on top while the rest of steem sinks.
Trickle down economics doesn't work. It's been demonstrated time and again that it only leads to greater wealth disparity and an overall lower standard of living. This is that.

Yes yes yes!

interestingly, in case steem price would go up to lets say 10$, all the top witnesses become multi millionaires with high monthly income that should be the incentive for any witness to be ok with some lower $ value monthly income for the work today with the low steem price. as mentioned by some others, it would been the best if everybody would have contributed to pay for SPS.

@meesterboom I’m one of the few to offer to sacrifice from the witness funding to show solidarity, another very few agreed with me, I’m still pushing that agenda as you can see on my forum post sadly you unvoted my witness (even though im fighting for creators like you) because I got into some heated discussion with a friend of yours and said one thing to offend him whereas in the rest he was way more abusive to me.

I am glad you are still pushing that agenda, it is a credit to you.

The issue of unvoting you as a witness is a separate issue to this one.

It’s to do with the other guy who swore and slandered me way worse than the misinformed observation I voiced :)

I hold my witnesses to a high standard though.


“Let he who is without sin cast the first stone” - you never been in an argument before? You don’t think other witnesses havent? If your standards are so high why do u vote NGC, he intimidates and abuses countless ppl on the platform including women, threatened to rape one of my team members even a while back.

Let he who is without sin cast the first stone

Lol. I don't claim to be without sin. I have engaged in far worse arguments and swearing on here.

But it's my vote. And I can do with it as I please.

Ps. I don't condone his every action but I quite like NGC.

It’s to do with the other guy who swore and slandered me way worse than the misinformed observation I voiced :)

For the record:

Hey back to what you were saying about marketing, I believe most of all the new Worker proposal projects will be MARKETINg based. I believe 1% of the steem inflation put into marketing could increase steem user base and price back to all time highs or at least $2-$4 range :D

At the current market price, it would be just under one million a year for funding. If the price raises it even more funds to get things developed with. Yes, content creators and commenters will take a hit. But because of this, our dependence on the development of the chain goes down. So say steemit goes bankrupt we can still find developers to put the changes in that we need.

This is also a very good backup plan for us, without faster forks and development steem was going to die anyway.

Yes, this is true.

My point is not against the creation of the SPS. My point is the direction of the funding being solely from content creators.

The witnesses are stakeholders too, it is only fair that all stakeholders contribute. To leave all contributions coming from just one group is far from ideal.

I will reiterate. I am for the SPS. I am not for all of the funding coming solely from content creators. When you add the other changes into the mix it exacerbates the pain that will be felt from them.

Let us not forget that highly competitive days are coming. To discourage, even slightly those that could potentially draw audience to the platform is counter intuitive.

A la fina el SPS es dinero par los testigos ellos son los creadores de todas las iniciativas d acuulación de steem .
Por eso son testigos. Crean la trampita, acumulan y después compran el voto para estar en la mesa...

Confiemos más Blocktrades que le da igual Stem queEOS. Estas Grades ideas para estabilizar la moneda Steem con un fondo especial creo que es más un pago de soporte finaciero. Las grandes ideas que tiene de ellos deben ser poque les estan pagando como asesores...... era muy bonito el cuento aquel que steem liberaria el mercado a la final hay que someterse a la mano invisible de las Crytos.

No, es no correcto

You got to remember these witnesses are also content creators. So yes they won't be taxed for securing the chain. But they will be taxed for using the stake they own. Which is used to upvote content or sale votes.

Much of the funding will come from things like vote bots and self voting whales will feel this tax, more than most of the content creators or voters. The whales who own a large amount of the stake will feel this tax more than lower users since 10% of their fee's will out shadow the normal users. So whales also being witnesses are voting yes to a tax that doesn't benefit them as much.

There is more to this, that people are overlooking.

Not all of them are content creators. In fact, some of them are conspicuous by their absence on the chain. There is far more to being invested in Steem than running a cloud instance of a witness on Privex.

The many I know of actively curate content or make posts. Yes, some don't post as much but that's because they're developing. Though some are just draining the system and i can fully agree on that.

Most of the funding is going to come from bots and whales. Since they make up a large number of funds paid out. They're taking a hit in some way which many have multiple accounts. So they will be paying their fair share in some way. And at current market cap they don't really make a lot when the price is low.

This really should be seen as an investment in the system.

The SPS is an investment into the system.

Agreed. On that, I have never disagreed.

Funding - I categorically disagree that the funding should come entirely out of the content creator portion of inflation.

Last I checked the median payout was .01 SBD. SPS will lower that reward for producing content. It's retarded to further decrease incentive to become and stay a Steem user. Retention was already at ~7.5% YOY last I checked. Reducing potential rewards will not improve retention, and will shrink the market for Steem. You might note that reducing the market depresses the price.

This tax will create capital losses, not capital gains, making an existential problem worse.

It isn't true it comes solely from content creators.

Apart from the fact that literally all rewards come from investors who are paying them (via inflation), not from people who receive them, it comes from the reward pool which pays both authors and curators (stakeholders). The latter will absorb either a 25% share or a 50% share of the SPS budget depending on whether you based it on the existing split or the post-HF21 split.

But, again, all rewards are paid by investors. Shifting around who receives them does not change that.

I think my point is quite clear. I am aware that it comes from both creators and curators.

To mince words semantically like this is merely disingenuous.

Edit, I don't mean that to sound as abrupt as it reads. I am trying to get my kids out to party :0)

Well forgive me but I do think think that it not shifting solely from creators/authors but also from curators is more than a semantic point.

Nevertheless turnabout being fair play, I do think the more important point in my reply is not about curators vs authors, but that in fact all rewards are coming from investors. Before the fork, all rewards come from investors, after the fork all rewards will still come from investors.

For investors to start spending some of that inflation budget via a proposal pool (where by the way, anyone is free to make proposals stating what they intend to do for Steem and how much they request to be paid to do it, even including for that matter, content creators) rather than continuing to spend all of it via the content pool is not changing where it comes from, it changes where (some of) it is going.

I doubt very much that there are too many investors happy with overall performance of Steem over the past few years, and the reward pool is the headline feature of Steem representing by far the largest portion of the inflation budget. If we aren't happy with how things are working, and many are understandably not, questioning whether it is doing its job, and then looking to spend some of that budget on other ways of adding value to Steem should hardly be viewed as radical.

When witness rewards were cut 80% a couple of years ago in order to focus the witness role on core blockchain maintenance and away from general project funding (with the 10% of inflation budget assigned in order to sufficiently fund that essential core blockchain role), that was done with the explanation that:

  1. Unlike other systems, Steem has a way of allocating general funding, the reward pool (and this has been and is being done to some extent).
  2. In order to allocate funding for specific projects or jobs in a more structured manner than the relative chaos of individual posts and votes, adding a worker system could, and probably should, be considered later.

Well it has taken over two years to get here, but now were are finally at the point of doing #2.

IMO it is a completely reasonable, and even pretty modest, adjustment to make at this point. After some further experience, we can reassess.

it is only fair that all stakeholders contribute.

All stakeholders will be contributing, because the funding will come from inflating stakeholders existing holdings, just as funding for everything else comes from that.

The question of allocating that inflation budget is not or should not be one of different groups each trying to grab the most they can for themselves at the expense of the others, it is or should be one of looking at how that budget can best be spent to give Steem the best chance of success.

I sincerely believe that the witness reward should not be reallocated here, not because I am a witness and am wanting the higher (or at least not lower) pay, but because witness pay already went through a process which cut it (by 80%) to the lowest possible level reasonably consistent with chain safety and security (and going forward even that assertion of safety is open to question in my view).

I also sincerely believe that the reallocation of a portion the payouts from the main content pool to a proposal pool is in the best interests of Steem. It also doesn't directly translate into a cut for content because some 'project' funding can and should move to the proposal pool, freeing up more of the main pool for content and general social uses. I for one will be looking to use some of my new downvotes against posts/comments which try to extract project-like funding from the main pool when they can and should submit their request to the proposal pool instead.

Have you ever noticed how some around here will say things like, "If these content producers were producing something of value, they could be out in the real world making money."

All that does is prove how disconnected they are from the real world. This is the real world and since so many fail to see that, they can't wrap their heads around how the arts and entertainment industry generates billions annually, in the real world. Since this platform is all the land of make belief to them, they have no problems with stepping on content producers, kicking them to curb, losing out on potentially and eventually billions of dollars, so they can scratch their heads and wonder why they can't even get a few thousand dollars pouring in, while thinking they live in a dream land.

Hopefully it's not a coma though because it would be nice if some folks around here could wake up.

If only they could wake up. If only they could see for a moment what they are creating. Or rather what they are not. As we both know if they carry on deriding content creators then they will only ever see ever diminishing returns. And then nothing. When it is too late they will try to change things up but it will be too late.

Lots of people were panicking when Dan announced Voice which in the end turned out to be a damp squib fraught with problems before it even began. There will come a competitor though, one that understands the basic paradigm and seeks novel ways to solve it.

The content creator bashers here can attempt to make it hard for them or carry on the way they are going and make it easy for them. I am not holding my breath

I don't even see how something marketed as a social media platform like Voice is a direct competitor to a content production platform like we have here. I realize some use this platform as a social media site, which is fine, whatever. What would Facebook be though if people weren't sharing content from content production platforms though? What would Youtube be if people were not sharing links on social media? Many people saw Voice as competition but social media and content production go hand in hand. Each one makes the other one better.

Bashing content here is like visiting Youtube and being angry about videos.

I think maybe because some see their own efforts and see how they run their blogs, they just assume everyone else is the same. Start running the blog like a business and act like you're stepping out on a stage with every post, and you get guys like us, and in the real world, when performed live, the seats fill up, the money pours in.

We've both entertained thousands of people since showing up here, while working under conditions that make that nearly impossible. Imagine what it would be like if the odds weren't stacked against us.

I think maybe because some see their own efforts and see how they run their blogs, they just assume everyone else is the same.

Hehe, I often say similar in that those who cannot produce content worth a damn like to run down those who can by running down everyone who does. Saying that all the content here is crap and that its ALL low quality etc. Its a porr tactic of theirs and yet sometimes it seems to work on some sheep who parrot it back blindly.

I guy walks into a bar. Tells everyone they don't know how to drink.
That made way more sense in my head.

I get it though!!!!


Yes I agree completely. Especially when some of the witness funding was said to be to help them build projects. The rewards from being a top witness far outweigh the costs, especially after MIRA, even with steem at $.40. Why we are not directing some of the inflation from them is ridiculous to me as well.

Exactly, it's ridiculous and will cause a lot of negativity

I cannot see how that will encourage new people to come here.

Witness funding was and is not intended to fund projects after it was cut 80% (I believe in HF12).

Some witnesses do get involved with projects as part of their campaign for votes, and given surplus funds under some conditions, but that's not a core part of witness rewards based on how the budget was designed.

By contrast, witness rewards were intended to support projects prior to being cut 80%. That bundling was not seen as a good approach and was a good part of the motivation for the huge 80% cut. It was always envisioned that: a) existing reward funds could be used to fund projects via voting for posts, and b) something like SPS could be implemented later to more directly fund projects without the somewhat messy process of doing it with posts. It took almost three years to get there, but better late than never.

And you think the current inflation allocation setup is the right way to go for witnesses? Their costs are fixed in USD, which means a tanking steem price could make it un-economical to run a witness node at all... which would put the entire network in jeopardy.

In this system witnesses secure the network, in a POW system the miners secure the network. Miners are not able to mine at a huge profit for long before the system corrects itself. We have no such correcting mechanism with steem...

Instead, network securers continue to get inflation regardless. Fundamentally, that doesn't sound right to me.

With the recent cost reductions to run nodes it also makes some sense for there to be revenue reductions as well and this was the perfect opportunity for that to happen.

There are no cost reductions to run witness nodes as yet. Over time the costs have simply grown, though to some extent this was expected. The MIRA version (with its associated cost reductions) isn't recommended for witnesses.

I don't think the witness reward mechanism is perfect, but if we are looking narrowly at the reward amount, I think the analysis that was done when it was reduced by 80% and set to 10% of total inflation was reasonable and hasn't changed significantly, therefore the split shouldn't change. Proposals to revamp the system in a more fundamental way can be considered. I'm open to looking at it.

Why is it not recommended? That was one of the selling points sold to us by Steemit,Inc... That this new version would help decentralize the platform as it would make running witness nodes cheaper.

I would guess it will eventually get there, but not yet. The main priority was reducing the costs of Steemit's own expensive RPC nodes, and they did that.

MIRA can reduce expenses of running a node (full RPC, seed, witness) but at the cost of a much slower replay. On my witness test node, a replay usually takes 20-22 hours without MIRA but when I enabled MIRA I gave up after 3 days of replay still not completed. For a top witness, it is critical to be able to replay as fast as possible in order to get the node back on track on events such as a HardFork where a replay is required.

MIRA will help with reducing the costs of other nodes but for witnesses nodes it's not recommended for the reason above.

Interesting. Thanks for the explanation. Was that just smoke and mirrors then from steemit,inc saying that MIRA was going to help reduce the costs for running a witness node and thus making steem more secure and more decentralized?

It will help for new comers who don’t have enough votes to produce enough blocks at first. They can do with waiting few days for a replay. After a replay it’s all good. Also good for secondary witness nodes. So if a top witness runs multiple servers then yes it will reduce costs, just not recommended on the primary witness server.

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And by the same principle why not a thin slice off the Steem Power interest so that all beneficiaries of inflation system - fund the SPS. After all, I think I'm right in saying that 35 accounts hold over half of the Steem Power. I guess that would have been unpopular with the whales.

"When will it be understood that without content creators this platform will wither and die?"
I agree with you, but I think that it is important to mention that this platform will also wither and die without content curators, and to be honest, this platform currently lacks of real content curators.
I am on Steem since 2017.05.17, and I see that people are selfish and greedy.
Many people are writing blog posts, but only a few people cares about other people's blog posts.
Maybe HF21 (EIP) (Economic Improvement Proposal) will change this by "Increasing the curation rewards to equal the author rewards".
If this will decrease the number of bloggers (and content creators in general), and increase the number of content curators (and maybe the real, human interaction with it), then HF21 will be good for Steem.
We (the users and the community of the whole Steem blockchain) need to find a good balance between content creators and content curators, otherwise this platform will wither and die.

And I agree with you hence in my original comment I said that I agree with the changes proposed. I am all for the change to 50/50.

Something needs done and this is something. Curation is sorely lacking, whether this will truly help remains to be seen but it is something and I think that's important.

Like others have said, why not take from witness rewards and make the remaining witness rewards a proposal in the SPS system?

A fine idea! :0)

Because the system needs a stable core to function at all, and that requires that witnesses not only be paid but paid enough to always maintain stable infrastructure and contribute enough of their time to necessary 'soft' functions, but also enough so that concern of losing a witness slot is a meaningful incentive to remain a good actor (if you are doing it break-even or at a loss, who cares if you get voted out once you have messed with the chain, possibly for personal profit or paid by someone else who profits).

Without a stable functioning and secure chain you can't even conduct an SPS vote. For example, witnesses could tamper with the vote by censoring transactions, or punishing accounts which vote the "wrong" way.

A DPoS chain depends fundamentally on the competence and integrity of its witnesses Putting that at risk puts the entire system at risk.

Yes. Also, why 10%? Where did that number come from? Not just just 5%? Why not 15%? I just don't understand. Also, I agree, Witnesses should be giving up some of their funds. I think 5%, just so that we're both losing half. ;)

I would definitely like to see something coming from them. I find the fact that it all comes from the creators disrespectful of those who put the work in day in and day out.

some witnesses work harder than all the content creators combined lol steem doenst have godo content anyway it mostly sucks, mostly, we have great people but they are lost in a sea of garbage which si NORMAL its NOT ABNORMAl for a social mediasite to be FULL of trash they ALl are LOL :D But we have to actually hit a saturation point to get to the point wher ewe can actually get GOOD content rise to top liek reddit and 240 million users

just give @steemit inc tiem toi realize they MUSt sacrifice or INVEST millions of steem on NEW account creation , THEN we can onbaord millions of reddit users and BOOm we win

jajaja lomismo pense, bueno es lamisria del poder y la miseria de los gobernados d nunca onfiar en los como una maldicón a voces...aunque sea 0,5 hubiera sido motivante,,,

Yes indeed, anything would have been motivating. There would be no issue if they said 0.5 but the fact they vote for everyone elses haircut is poor!

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