Why steem power delegation services are bad

in steem •  last year

Let me start by saying that I am not against anyone running a business on the steem blockchain or using their hard earned stake in the platform as they see fit.
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Having said that let me re-phrase the title of this post:

Steem Power Delegation services encourage self voting

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Whait a minute...didn't you just say that you are not against people using their Steem Power as they see fit?

Doesn't self-voting fall under that category?

Yes...and yes

The problem is not the action itself (self-voting) but the rates at which the services are offered.

Let me use myself as an example:

Three days ago I made an impulsive decision to use @blocktrades steem power delegation services

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As you can see on the image I received 4,936.585 SP for just 100 Steem. I will be able to use it for 30 days. I was very happy with my decision until I did the math (yes I know I should have done this before entering the transaction...shoot me).

Hear is the deal...with the extra steem power one full vote from my account increased by ~0.40 SBD. At the current exchange rate this equals ~0.43 Steem.

In a perfect scenario I could earn 0.1075 Steem per vote from curation. Multiply this by 10 votes per day (the optimal number) and then by 30 days you get 32.25 Steem.

So I am not going to get back my investment just with curation. What about giving myself some upvotes?

To break even I am going to need to make 3.33 Steem per day. 3.33/0.43 = 7.74 votes or rounded up 8 votes.

In order to break even I am going to need to use 77.4% of the votes on myself!

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I am not familiar with the rates of other services but I imagen they are similar and would yield the same result give or take (point it out if I am wrong),

We have 2 possibilities:

  • People using these services do the "rational" thing and use the extra voting power on themselves.
  • People vote on other accounts and end up short-changed.

The first scenario will take out the social part of the platform...not good.
The second one will lead to the increase in wealth of the organizations and individuals that offer these services at the expense of their customers...not good either.

This would be different if the payout of the posts was not 75/25 (75% to authors and 25% to curators) but something more like 50/50. Or if authors could customize the reward distribution to encourage voting.

Or these services could be offered at better rates.

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The thing is that @promoted bot does not promise you to break even. Not at this time. Read here - my little test and here - the official announcement.

It doesn't have enough SP yet.

What is this service, or any other similar, good for is yet another question ...


Edited ...
You are testing lending of SP and I was testing upvoting. Sorry, my bad. Two different stories.

Still, it doesn't add up to enough of SP for anything :)

Hey @onthewayout.

I've been looking at curation quite a lot recently. One point to consider is that you can earn more than 25% curation on your upvote under the current system. An explanation of this can be found here:
https://steemit.com/curation/@miniature-tiger/an-illustrated-guide-to-curation-from-the-simple-to-the-complex-with-real-examples-from-past-posts-part-1

For a vote of say 0.50c there are opportunities out there to gain higher curation rewards while voting on quality posts. The ocd posts are one such example:
https://steemit.com/curation/@miniature-tiger/curation-rewards-analysis-ocd

Another point to take into account is that the value of your upvote on your own articles is higher than 100% of that upvote (for a similar reason to the above). You get 75% author rewards + X% curation rewards. If you upvote first on your own post (for 0.50c) and it goes on to make say $2 then you receive "50% of upvote" curation rewards on your own post. If it goes on to make $8 then you get to "100% of upvote" curation rewards on your own post.

Rejigging your analysis, purely as an example, let's say you:

  • Use 3 of your 10 votes per day on your own articles (write write write!) and they make $2 each so you receive 125% of upvote (75% author + 50% curation)
  • Use 2 of your 10 votes per day on your own comments (so a little self voting) for 100% of upvote (75% author + 25% curation)
  • Use 3 of your votes per day on curation opportunities and manage to make 50% of upvote rewards on average.
  • Use 2 of your votes on comments that people make on your articles (split down between people into smaller votes) or on articles you like (but fairly carefully - those which have low current payout and outside 30 mins) - managing to average "25% of upvote" curation rewards.

Some fairly conservative assumptions, although some author work involved. And OK, still half of your votes are headed to yourself (but mainly on your own articles). But purely as a baseline example this averages to 77.5% - your initial investment. Hopefully your posts go on to make more than $2 which would then give you some legroom to go out and vote on any articles that you like or to use the power of your new upvote in other ways.

This isn't to discount the 50/50 idea - I haven't put all my thoughts together on that yet. But as it won't be around for a while in any case just some thoughts to make the delegation work under the current system.

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You understand very well how the curation rewards work. I did not want to complicate the analysis by adding the impact of later votes.

Awesom reply!

Hi @onthewayout
Thanks for sharing your experience it offers real value to the community.
When people vest in another account they already receive a return on that investment.
But I see this as an opportunity for us to decide what kind of a platform we operate in. Is it about supporting one another or is it about using people to extract value rather than adding value.
Ultimately the issue will be resolved by individuals deciding what behavior will be supported.

Hey @onthewayout,

Think of it as one of this way:

A. You sacrificed 25SBD (100-75) for all our benefits.

B. Nothing like putting in some $$ todo some investigative reporting.

C. We will not collectively smile at you and think....glad he figured out what we all suspected all along...and upvote (the dolphins, orca, & hopefully one of the 50 GigaVest Whales) and pay you back x10 folds.

D. Giving it Real...Increasing you street creds.....oh, I mean steem rep.

E. All of the above.

If you choose A, B, C, D, or E you are now happier. Steem on!

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Up-Vote for Keeping It Real and Doing the Math with (rented)Delegated Steem Power ! Following you dude

I'm amazed the rate is that high. I just delegated 20k for a month to a guy for 325 Steem...though I already feel rotten about it because I don't feel he's adding value to the system the way I try to with that Steem Power. Though, if you provide quality posts that others reward, I think delegation to the right people can be good for everyone. You have valid points as it definitely incentivises bad behavior.

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If the rewards were split 50/50 instead of 75/25 it would not be that big of an issue.

Maybe for some people it's less about getting a return and more the opportunity to make more of an impact on the posts and authors they want to support.

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It could be the case but how long can you sustain being charitable?

I am so confused about all those services and tried some of them but more and more I just vote in my old fashioned ways. Autovoting but mostly manually curation.

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It is confusing...If I have the time I will do a review of all the services out there. I also do a mixture of manual curation and automated voting.

Thank you for stopping by!

I think a lot of folks don't do the math before deciding on buying some of these 'services'. There have been others in the past, too, that people found to be losers for themselves over time, and winners for the folks pitching the 'deal'. At least you figured it out pretty quick!

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Maybe we need to compare all of the options that are out there. If I have the time I may do a post about that.

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That would be really interesting!

Awww @blocktrades corp. not upvoting for free now? Are we in a buy votes get paid community now.

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I was lucky then because I got already 2 “fat” upvotes from @blocktrades in those past 15 months as well as unfollow from @thejohalfiles
That’s just #steemitlife.
It’s a Fun circus here and I like it. Never know what happens next 😝
I am thankful!

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I only got 1 fat upvote from @blocktrades corp. I got unfollowed many times lol.

Sure, thankful, thankful. Everyone's thankful.

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I am wondering how fat those up-votes were. TY

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Like $100+

VERY GOOD INFO PRESENT HERE .BUT IT'S PART OF GOOD PROJECT

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What is part of a good projet? leasing vests and selling upvotes is nothing more or less than usury.
Having said that there are some organisations that do have the obvious intention of offering genuine support behind them.
Usery does not, it is about extrating as much value from its victims as possible and providing as little value as possible

Well I think you are missing the point on other kind of services like; SmartMarket, where you sell your upvote to other users. This by itself is quite profitable, and even it has a twitch to promote quality content.

Once you register for the service you can choose to what type of users you want to support, all kind, 1 to 3 stars, or even specific users you love. The whitelist process is quite standard and we look to provide a balanced growth avoiding exploit of the tool.

If you want to know more check;

I am about to finish a month of using delegate power to sell my upvotes and I am about to make a post on the topic, so far is quite close to break even, even more counting on curation rewards.