The Reward Pool for Morons - It's a Bid Bot Stupid!

in steemabuse •  2 years ago 

So I have not been able to pay a ton of attention to the whole @haejin and @berniesanders thing reawakening the last few days. But now it is all over my timeline again on a day I actually have some time to spend in my timeline.

You can consider me firmly in Bernie's corner on this one. One person does not, under any circumstance, deserve 4% of the reward pool when there are nearly 40,000 daily active users splitting the pool. @ned does not deserve 4% of the reward pool, and if he doesn't, some guy posting Crypto charts 10 times a day certainly doesn't. Sorry, Don't see it.

I know... I know... I just lost the entire audience I am trying to make an argument to. But you know, with the title of this post, they were never going to be in my corner anyway.

So I want to explain the reward pool to those of you who are still here, and don't really grasp the reward pool. I want to put it in the simplest terms. Terms even my 5th grader would understand.

And then it hit me....

The Reward Pool is a Bid Bot!

Image Credit: @themarkymark @buildawhale

Remember, we are parsing this down to the simplest terms. To Language that anyone can understand. Well, we all understand Bid Bots right? We all go to Steembottracker to see what our vote purchase could be worth, thanks to the hard work of @yabapmatt, and we place our votes accordingly.

One of the best explanations of Bid Bots is the one provided by @sneaky-ninja created by @michaeldavid of @thealliance. Check out his sneaky ninja moves on these fishes:

Image source and Sneaky ninja rules can be found at This Post.

The basic premise of a Bid Bot is that it has so much voting power each window. Let's take @buildawhale for an example. As of this writing, Buildawhale has a FULL UPVOTE Value of a tick over $800 per voting window. That $800 gets divided among all the people who send bids in for their posts. But you don't just all get an even split. No, you get a split based on how much you send in versus how much everyone else sends in.

See the above image if you are confused. Fish 1 sends in $1.50 and winds up with 30% of the vote, fish 2 sent $1.00 and got 20%, fish 3 sent $2.50 and got 50% of the vote.

The fractions and decimals change with each new bid sent to the bot. But the key point is this...

The Bot Still votes for $800

That's right. The Bot's vote doesn't go up and down, back and forth all willy nilly. It stays at $800. A specific amount dictated by the Steem Power held in the bots' wallet, and the current Voting Power.

The Reward Pool is a Bid Bot!!!

It's the Biggest, Hardest Hitting, Most Misunderstood Bid Bot around. But if we're going to boil it down to it's component pieces, It's a fucking Bid Bot!


See, every day the system generates a specific amount of Steem that is our reward pool for the day. That newly produced Steem is parceled out by our upvotes (bids) on posts. My bid has an ESTIMATED value based on whatever algorithm people much smarter than me built to estimate rewards. But the key word here is Estimated. Because what really matters is how many people vote throughout the day. I guess the programmers have a pretty good handle on the voting habits of Steem users, so the estimates are pretty good. But post values will fluctuate throughout the day as more votes come in and effect the value of each vote.

Going back to the absolute simplest terms. If one person, and only one person voted once All Day Long then the entire reward pool for the day would go to that one post. Period. End of story. The reward pool is X, the votes were Y. if you can get 40,000 people to stop voting for 24 hours, feel free to test this theory. I'm game!

The problem is, there ARE 40,000 active users all voting and vying for their piece of the pie. And each of our votes is weighed differently based on our SP. But at the end of the day, Steem, our Big Ass Bid Bot, takes all of those votes, and distributes the reward pool accordingly, and then goes back to sleep to recharge before it distributes all of the next day's rewards.


The Supply is not infinite

This is where @haejin's followers have it wrong. I saw a post today about how there was plenty of supply, in fact an infinite supply. There isn't. It is a fixed amount. If you want to understand the math behind the fixed amount, check out @penguinpablo's article How much Steem is added to the reward pool per day. As of that writing, 6 months ago, the daily Steem production was 48,029 and the inflation rate decreases about every 8 days.

So 48,000 Steem created each day. That's the Giant Steem Bid Bot's payout.... Like Buildawhale's $800 payout. It is finite. It doesn't go up or down based on the number of votes given out, it doesn't care what kind of garbage post you upvote. It doesn't even care if you post an image of a chart you found on the internet. All it cares about is the cumulative voting weight of your post versus ALL OTHER POSTS that were voted on that day.


TL;DR

@haejin is taking Steem away from you. How? He's coming in like the shark bid bot bidder at the last second with a Big Fuckoff Hammer and outbidding everyone else in the pool. Due to the sheer number of posts he puts out, and the voting weight he is able to put behind those posts, he is outbidding you not once, but ten times a day.

Every voting window is closed to you! You wouldn't buy a vote from @appreciator if you knew you were sending in 10 SBD for a $4 vote would you? Of course you wouldn't. But that is exactly what you are doing every time you vote for someone to get $400 payouts multiple times a day. You are saying "This dude deserves more of the reward pool than anyone else!" I hope that let's you sleep well at night.


Really Really TL;DR

  • The Reward Pool is Finite
  • It can be compared to a Bid Bot in that it gives out a fixed amount every payment window
  • When one person outbids everyone else 10 times a day this is abuse
  • You wouldn't let people get away with doing this with Bid Bots
  • Why are you letting them get away with it any other way???
  • Reclaim the Reward Pool, Stop voting for @haejin

END OF LINE

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I don't really care much about them and their business, but from my experience, @haejin has valuable posts, he is a good analyst and his posts and videos are interesting and easy to understand.

You don't even remotely get the point of this post.

It doesn't matter if he has valuable post. By posting as many times each day as he does, and getting the rewards he does, he is taking rewards in Steem away from you.

Let's use another Analogy. 100 people go into a restaurant. They fill the joint. It is Haejin and All of his followers. The restaurant says they only have one meal left, a chicken plate with fries. For some reason that is okay with everyone. Everyone is hungry, but if everyone gets their share of the plate, all will be well. But when the plate is brought out Haejin says Great, I'll have the chicken, the rest of you can split up the fries. There are 99 of you, and maybe 50 fries. So Haejin has a nice juicy piece of chicken, while everyone else has half of a potato straw. Is that fair? Is that good for everyone? Or just good for Haejin? Who went away full, and who was still hungry?

I honestly can't make any better analogy than this. If you don't get it at this point, I think you are willfully missing the point.

To your surprise maybe, I do understand perfectly what the post is about and how steem rewards pool is structured.
What I am saying is that he is a good blogger thats it.
For the rest, there is a function of flagging the posts. One of the reasons to FLAG is exactly the disagreement on post rewards. So just use the tools that steemit has to offer. If @haejin still manages to get huge rewards, he is a talented man and I respect his ability of managing this out.

I guess the main problem boils down to the following: Our goal should be to strive to grow the community and to produce more quality content than the previous day each time. Each piece of quality content should in theory back some of the monetary value Steem has. Because there's more quality content added on Steem every day generating more currency doesn't cause the currency to lose its value, in fact we seem to produce enough quality content to increase its value in the long run.

However the algorithm doesn't reward us for having more quality content relative to other days. A day with only mediocre content will generate the same amount of Steem as a day with ton of really high quality content, so instead of having the goal to create more quality content every day in order to all benefit from it, we're just competing against each other for the same share, hoping we can increase the share we get. Ignoring all spam and misuse of the platform for a second and ask: Shouldn't the work of 40.000 people be worth more than the work of 1000?

I don't think this about envy, it would just be easier to accept someone's exceptionally high income, if it didn't mean your chances, your influence, every person you upvote they all suffer from someone them taking such a large part of the share.

Currently the system seems to promote growth only on a per individual level. You're not looking to grow alongside others, you're just looking to grow faster than the average user, because just growing at an average rate will not increase your power.

This is exactly how Steem got into this problem in the first place... when Steem only had 1000 people, those people were getting huge amounts of Steem by the way it was distributed, but no one really had any concerns because Steem was only worth about $0.10... now that it's worth more, we're still generating the same amount of Steem per day, but it's distributed amongst many, many more people... but those super early adopters are very much influencing the payouts today.

Ideally the amount of Steem generated each day would increase with the activity (transactions) but because that didn't happen we now have this issue. Very insightful @uber-dragon!

You're right, there's always going to be those days that are more full of great content than other days, but that's why we need to strive to create consistently quality content. I spend hours writing content that 90% of the time gets less than 10$ in upvotes every so often I get a nice upvote and the reward is bigger, but I figure if I keep bashing out good content it all ads up eventually!

At first I didn't understand what you meant by "The reward pool is a bid bot", but then I read this:

So 48,000 Steem created each day. That's the Giant Steem Bid Bot's payout.... Like Buildawhale's $800 payout. It is finite.

So the value of the reward pool is distributed based on the value of votes each post and comment receives. Except there is one very big difference... you don't have to PAY to receive that reward, you just need to have upvotes, presumably because of your quality content.

The point to take away from this, that I didn't understant at first, is that the Reward Pool is Finite. People are treating steemit like the Federal Government, as if the treasury unlimited. But there are very real consequences to abusing the reward pool - it's very profitable for those who abuse it, while it's theft for those loosing out on rewards.

I am not a fan of @berniesanders, but I would NEVER vote for @haejin. What's he's doing is despicable and their's not much anyone can do about it. @ironshield

Even with all Bernie's flagging efforts, Haejin is still getting 3.6% of the reward pool:

3 quarters of that is coming from RanchoRelaxo, with the other quarter coming in from people hoping to get curation rewards. Haejin's actual followers barely have $50 between them, they're not invested in this platform, but they're hoping to get that rare Haejin upvote in the comments... except, with a vote of nearly $100, guess where it all goes:

I'd actually have no problem if RanchoRelaxo gave Haejin all this money (surely they have a side deal though?) and then Haejin distributed it amongst crypto fans, that'd be fine... He didn't vote anyone but himself today, he voted four times for people yesterday, and then made a huge amount of flags... so yeah, pretty unhappy with him.

Honestly, at this point, I would actually like Haejin to go away... I don't think he's brought any investment into the platform, his fans aren't contributing, he's not contributing or reinvesting.

I think we're at the point where Witnesses need to made a stand for or against, and the Steem community should vote for the Witnesses that support their viewpoint. We're only going to see this issue arise again and again as people with a huge audience on other platforms find this one...fans that have no interest in any other content.

Thanks for the clear explaination @mikepm74. I've been scratching my head about why this is an important issue, but I couldn't quite define it on my own. Comparing it to upvotes and bidbots is illuminating -- of which, I had thought to myself something like the following:

  • Expanding on your example above;
    • Person A bids $1, Person B bids $1.50, Person C bids $2.50 for a total of $5.
    • Everyone is bidding for a slice of a $10 vote, and they're really excited because it looks like they're going to profit.
    • Person D comes in at the last second, and bids $95.
      ** Person D gets 95% of the reward -- $9.50, and everyone else splits the $0.50.
    • It's not the greatest example because upvotes don't COST money, while bid-bost DO -- but I think it's in the same line of thinking?

Yep... I think you've summarized this well... and then add in the added folly of Persons A, B, and C voted for Person D to get the lion share, not understanding what they were doing.

Well put. It is not a bottomless pool. The sooner people wake up to the reality and accept it, or state that they care less about the rest of the platform, the better for the community as a whole.

There should be a united effort by everyone who opposes such abuse to pull together, rather than a few people without the power to affect change putting themselves in the firing line for flag wars.

Well, the problem is when only the people with SP can do anything about it, if the changelog for HF 20 doesn't do anything about it then we can't expect those parties to not continue in their own self-interests. If some people seek profit maximization in the present or if others want to delegate their power to teams building apps or if some just want to cash out completely that's all up to them. The ordinary users don't have much to say about it. All this does is scare people away from a very obviously rigged game if everyone is yelling about how broken it is literally all the time and no one has the power or incentive to change it.

Because all votes are weighted it means the unpowered masses are literally helpless, and they'll continue to do what they've done in the past, which is to boycott the entire mess and stop using the website completely. 90% of people disagreeing with an activity on steemit doesn't matter if their voting power is a few percent, and most are too caught up in dreams of making it big and cashing out as billionaires to see all the red flags.

I agree and wonder what this looks like to an investor thinking of putting their own money into Steem. They're gonna think twice.

I mean there are more than a few reasons why, say, Ashton Kutcher doesn't have a big share of steem, lol. User retention is king, and that metric alone is going to scare away any serious bucks from considering the platform or the coin. As for how and why the coin has seen meteoric rises in the past, well, I'll let the whole Tether+unregulated exchanges thing unfold and that'll pretty much explain itself.

If shit like Kraken charging 0% non-margin trading fees doesn't scare the living hell out of someone then I don't know what it would take to wake them up. That's a pretty obvious ploy to entice people to keep their money on the table.

Thx for putting this out there! Makes perfect sense and I hope it gets the word out so more people can understand what's going on around here and vote accordingly.

"trucedidntwork", I like it, haha

Great post and great references.

Hoping this gets through to at least some of the Haejin supporters.

You're so nice for commenting on this post. For that, I gave you a vote!

Good work bud, nice simple explanation that everyone (I hope) can understand. It's just one of those situations where people don't realize the damage they are cause to the system and by ignoring it they think it will just go away.
@haejin needs to step up personally and hold himself accountable for this. His short term greed could turn into long term losses for all of us.

Once again, solid write up, I hope this reaches as many eyes as possible.

tip!

Thank you for the extra tip! hahaha

I don't think it is getting to the eyes that need to see and understand, but that's okay. Today, tomorrow, six months from now... they will learn.

Right, whether it sinks in is up to the user, all we can do isn’t keep trying and keep spreading useful info

Hi @jasonshick! You have received 0.1 SBD tip from @mikepm74!

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Great explaination @mikepm74, hopefully more people start to understand how this works, that said it's something that plenty of people are upset about but the risk involved for newer users is huge. Our only choice is to stop upvoting, once we bring in flags we see small users getting decimated by the wales retaliation.

I don't think I've ever voted for that guy and I rarely vote for trending posts anyway. They have generally made a good amount and I prefer to reward good posts that are meaning much less. I just don't care about the curation rewards. That's not much compared to what I make from posts and comments. I'm not going to flag the big posts as they may retaliate. He is actively harming the steemit platform and I think the whales who care about it should take action

Yeah, some people are so caught up with Curation rewards, and sure for some people it can be pretty lucrative. But at the end of the day we should be promoting good quality content regardless of the rewards that are coming back to ourselves. That's why I hang out in the Introdcueyourself tag and curate for Curie... I want to reward people who are not getting whale votes already.

Very pleased to hear that.
Despite my very limited time on Steemit I can see there's very deep discord.

If slicing up the rewards pie isn't 'fair' is that due to a developer's 'oversight'? And if so how can it be fixed?

Quality must get its just rewards
Prolific quality even more
Abuse must be designed out of the system otherwise the legitimacy and survival of Steemit is put into question in a crypto world where already the authorities are gearing up to pull the rug out from under it.

Bidbots are overrun now. Now that the SBD craze is over and STEEM is looking for a new trading range it's time to get back to communities, SMTs, and all the other updates and advances that is going to keep STEEM blockchain at the vanguard. Peace !

How do the masses compete with the stake held by whales? Probably by befriending them in one way or another increasing whales dependency on minnows. So by increasing the number of accounts with more and more middle class type distribution. At least 51% of stake is held by 80% of the accounts. This a variation on weighted democracy, the more pressure whales are under from masses of minnows to ensure distribution of their stake to maintain their own position. Rules for Rulers basically.

this whole bot shit has to stop eventually and especially those abuse the reward pool or at least somebody with power has to stop them. it's the same and same shit all over again, this might seem a bit philosophical but it's true. Every time humanity has something pure and good ( in your case steemit) with potential of becoming great, some people [email protected]@ up everything just because they are too greedy

It doesn't surprise me in the least, every time I see a new coin or ico or token or white paper that gets released and has the words "deflationary" in it with a very short time-scale for how long they'll be distributed for, I just laugh a little at what a blatant cash-grab it always turns out to be.

Sad fact 😔 I wonder who or what group can have enough power or influence to put a stop to this? And how would they do it? I'm new to Steemit and still trying to grasp how all the tech stuff works.

it shouldn't be your concern now, either way you can't do anything about it neither do i, so my advice is stick to your quality content find others you like their posts, interact with them and build relationships and everything else will follow

Will do! Appreciate the advice @filotasriza :)

Wow.. never looked at it that way before. Reward Pool as a Bid Bot!

I learn more and more about Steemit every day. Thank you for this post although I cannot say if I agree with it or not yet. I have limited knowledge of the system still, but your article helps with how Steem is distributed.

Great article @mikepm74 I was only made aware of the existence of bid bots just this week (noob here). I'm wondering how such bots were allowed to exist in the first place...? They are encouraging people to just rely on the bots to bring in money that ideally should have been gotten from posting quality content.

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I'm on your side and Bernie. Nice explanation too.

Thank you for explaining it so well :)
I've once tried a 1SBD bot vote (idk which), definitely lost money. Ofc it would have been better not to send sbd in the first place, but I had no idea what it was. I think this will inform really well those as confused as me.

Is there a place you can viddy the reward pool generation amount?

Probably shouldn't be left to casual readers to fix Steemit's problems, they are going to vote for whatever floats in front of their face. If witnesses can't make a viable website based on the spirit of the concept (readers finding good writers), then Steemit fails.

Well done on the description of the reward pool! Well done!

I'm glad I came across this as I need to learn all I can about steemit, thank you for the fantastically written information

:s I had no idea how much a selfvoting whale could affect the whole ecosystem... I guess he is not the only one doing that... That is something to worry, yes.

Let's upvote some minnows!

Steemit which has been the long expanding investment in the cryptocurrency market.
Nice one @mikepm74

Nice post I must have seen the influence of it on the overall community because I have been thinking this way for about a week now. Thanks @mikepm74 for the simplification and your enthusiasm.

You are right...
Unfortunately, as "Big Fish" both of us should enter this war on Bernie's side. But are we doing it? No we are not because we are too busy collecting Steem & SBD to waste our SP to fight a war.
We are also scared to be targeted directly by him and his followers...
The truth is, we shoudl make a group of 100s of Steemians like us and
syncrhonized, we would have a few hundred k SP but more importantly we are vocal and each and every one of our post would bring minnows and other fishs into the battle. @haejin is stealing Steemit from us... And we wait and DO NOTHING.
Bernie is unfortunately feeling alone...

I agree on the fear part of this. The bottom line is that Bernie has made his money and doesn't care if his account gets run through the wringer on Steem. I am sure he has diversified his investments enough that even if STEEM closed up shop tomorrow with no reprieve for the holdings we each have in our account, he would be fine. For me, and probably most people in the "upper minnow class" let's call it, STEEM is the #1 holding in my crypto portfolio. I can't afford to have someone actively flagging everything I do to zero at this point. So I am too scared to fight... you're right.

But by the same token, I don't consider either of us, even with our respective delegations to fit in the qualifier of "Big Fish". Big in terms of minnows, I suppose that is true, but compared to many of those who have been accumulating since the beginning, I still feel like plankton. There are people on this platform with the SP to wipe out Haejin, Rancho, and that whole tribe without help, and they do nothing.

I guess I fall in to the old trap of "If those who have the power to do something, choose to do nothing, why should those with less power do anything?" But you are right, if enough people decided they were okay with the repercussions that would come from a full on flag war, a difference could be made.

I don't have an easy solution... how to muster the troops to do what is right in spite of our own self preservation.