Steem Works: A Funding Mechanism for a Worker Proposal System
So, I have to say it... Jerry is onto something with the Worker Proposal system. I think it's proven to be pretty effective in a number of cases and coins to decentralize the work necessary to grow various blockchains and their networks. I think Steem could benefit from having one.
If you're unfamiliar with a worker proposal system it's essentially a fund that is segregated by the block. People can submit projects to the fund and be paid for working on behalf of the Steemit community.
I'm not an expert on worker proposal systems themselves so I don't want to dive into exactly how the worker proposal side of things should work, but @timcliff and I have been poking around in the block this week and we think we have a way to pay for this. Personally, I want to simultaneously unwind one of my least favorite aspects of the Steem blockchain as it stands today, distribution, while enabling a block empowering worker system that should lift up the whole platform.
As we say in New England "a rising tide lifts all ships." We're at $2, and if we did nothing except for hang in in for the ride that btc is on we'd be at $6. This platform is amazing and undervalued, and I think we have to do a little more to get investor attention. I think this could be it.
93% of the Steem sits in less than 1% of the accounts. That's not good for us. In fact I think it hurts us and our credibility as a network substantially. Three things contributed to this more than anything else. Initial distribution of Steem. Mining of Steem. Stake weighted inflation of Steem.
Not only did some accounts get early access to large amounts of steem, followed by some of the earliest accounts having access to mining which has added up to at least 10 Million Steem to a handful of accounts, but then arguably worse than all of that we had Stake Weighted Inflation set at a ridiculous percent. So, all that early access Steem grew at least 2X and possibly larger simply because we had an absurd inflation on the platform. Instead of it being dolled out in post rewards to active users it went to the people who ALREADY had the most Steem on the platform. Essentially the Steem holders grew their stake by a massive margin and it drove the price down to seven cents.
We can do better
We have an incredible network. We often have the most transactions out of any block. We hold the record for most transactions. We are the fastest block going. We have free transactions. We have 30k active daily users and growing. We have a ton going for us, but we're undervalued relative to other chains and their block activity by about 100X maybe even 1000X (check out http://blocktivity.info/ for where I'm pulling that number out of). I think we're still crawling our way out of stake weighted inflation shoving the price down to seven cents.
Stake weighted inflation was toned way down, but it still exists. It's hard coded into the block that 15% of the newly minted Steem that hits the platform from inflation goes to stake holders. As of yesterday you can see that the effective stake weighted inflation rate is at 7% of all the steem rewards that come through platform inflation. This number changes due to a number of factors, but it fights to get to 15%.
How much is that?
For ease of Math the platform has 260M tokens outstanding. It has a 10% inflation. 26M tokens will be produced in the next 12 months. Of those tokens 7-15% of them will go to the less than 1% of all accounts that have the most stake already. This is roughly 1.8M Steem on the low end 4.5M Steem on the high end. This is worth $4-9M USD over the next 12 months (without any additional changes to the price of Steem).
Which sounds more likely to skyrocket Steem?
Whales have roughly 6M more Steem.
Steem as a community has a strong worker proposal system funded with 6M +/- 3M USD enabling thousands of projects to get off the ground.
Yes, whales will get slightly less Steem, but I think the value of every individual Steem they already have will be worth loads more.
Please don't take this the wrong way. I'm not anti-whale. I think our investors should be rewarded heavily. I want investors to be rewarded on the platform. I'm glad they earn a healthy amount by posting, curating, delegating, and bidboting without the extra lovekick through stake weighted inflation to merit an investment here.
I also think if there's a vibrant community working specifically on the Steem blockchain and all its possible needs we'll rise up much faster than what we're currently doing. In short I think this will provide a better investment opportunity to investors who are looking to maximize Steem value.
Rather than grant steem on stake weighted inflation lets send it into a worker proposal system.
If you're a whale please ask yourself which is going to earn you more money. Even more Steem sitting in the largest accounts or a worker system designed to improve projects in a decentralized way, to spread the gospel of the blockchain, make product improvements, help bring in investors, build applications, and a ton of small projects that people do with $3-7.5M meant to grow this platform.
Should be fun and I hope many of the whales on the platform vocally support a plan like this.
What do you think?
This post was authored on mspsteem.com. It's a clone of steemit.com, but it is managed by @netuoso and has a 5% beneficiary to @minnowsupport to help the newest members of this community get off to a good start.