A Solution Proposal to the Reward Pool Abuse Problem on Steemit [Updated Version]

in #steemit6 years ago

$65 Million USD is paid to authors and curators in a year on Steemit. Some of us, including me, have suspicions that the content posted on Steemit in one year is not worth $65 Million USD. We believe that there's some reward pool abuse going on.

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pasja1000/pixabay

If each Steem Power holder cast at least 10 votes each day, there wouldn't be any rewards left to be abused. If 10 votes in a single day is not possible, it is also OK to aim for an average of 10 votes a day. However, that is not possible for all Steem Power holders.

In a previous post, I have proposed to remove the reward pool for authors and curators altogether and to introduce a tipping system as a solution to the reward pool abuse problem. I received a lot of feedback about that proposal, which I want to discuss in this post.

Solution Proposal

Before discussing the feedback, here's a summary of the solution to the problem.

  1. Remove the reward pool for the authors and curators.
  2. Users can tip posts, comments, and authors that they choose, from their own funds, as much as they want.
  3. The tips that a post or comment receives is used to determine its ranking in the site. That ranking will be used to populate the homepage, trending, and hot tabs.
  4. Keep the rewards for the witnesses.
  5. Keep the interest/dividends for the Steem Power holders.

Why would a Steem Power holder tip?

A Steem Power holder is a long term investor of the Steemit platform. Steemit will go through three different stages. The first stage is when the investor gives and the third stage is when the investor receives.

Stage 1

The investors tip a portion of their Steem holdings to valuable posts, comments, and authors. This attracts quality authors to the system who regularly publish valuable posts.

Stage 2

Quality posts, authors, and conversations attract the general public to Steemit. Some of the newcomers want to get engaged more. To do that they need to buy more Steem Power than their initial 0.50 Steem. Steem starts to appreciate slightly.

Stage 3

After the mainstream adoption by general public, companies, institutions, and even governments start to use Steemit. In order to increase their influence on the general public, these entities start to purchase Steem Power in great quantities, which increases the price significantly. The investors book huge profits.

The Steem Power price surges in times of events such as US elections, with competing parties starting bidding wars on Steemit to get their posts on the homepage and trending tab.

How would curators make money?

Curators who randomly upvote posts won't be rewarded in this system and that is a good thing. However, a new class of serious curators will emerge. They will act similar to the editors on Medium.

Steem Power investors who don't have the time to go through posts are going to allocate a portion of their funds to these serious curators. Each curator, investor pair will have their own conditions about how much to tip on posts and how much the curator is allowed to keep.

As a result, curation might as well become a full time job for some serious curators who know what they are doing and not randomly upvoting posts.

In the current system, it is easy to upvote, because it is not your money.

Actually, it is your money in the current system as well. In the current system, by keeping your money in Steem Power, you are donating 6.5% of your funds to the reward pool for authors and curators, in one year. That money is than donated to the authors and curators that are selected collectively through the voting mechanism.

In the tipping system, you are going to decide on the percentage you want to tip and you are going to decide on which author, post, comment, and eventually editor to tip. Moreover, you will be able to decide the amount of each tip.

What Do You Think About This System?

Would you like to see it implemented on Steemit? Do you have any questions or remarks? Let me know in the comments. If you like the idea or you want to invite others to discuss the idea, please resteem this post.

Disclosure and Disclaimer

At the moment of writing this post, I owned some Steem Power tokens. This post is for information purposes only and not intended to be business or investment advice.

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you can already implement your proposal by refusing payment and ask people to tip you. Good luck with that.

If you look at this issue from the point of a Steem Power holder who is willing to abuse the system, the current system is a dangerous one.

It requires investing your money in it to abuse it. By the time, you make a few cycles of abuse, you might end up with a crashed Steem price.

If you look at this issue from the point of a moral investor, I wouldn't invest in this system knowing that 6.1% of my investment will partially be blown away to low quality content.

If moral investors don't invest and if all you have is abusive investors, that system is bound to crash soon.

If the Steem price crashes, then the payments received by the authors and curators won't be worth much.

So, it's a losing game for everyone, except for the few abusers who have already made enough money to cover their initial investment and now turning their profits in the system, for a last few cycles before the whole thing collapses.

And of course you know that me refusing payments and asking for tips is not going to change anything. So, I'm not going to elaborate on that.

Even if it crashes, you don't get paid in steem but in steem power, or in steem power and SBD. SBD is pegged to 1$ worth of steem, everything else is speculative, thats why we see those high payouts for posts.
steemit was meant to have high utilization and not as an speculative object for investors, see what Dan Larimer says:

Even if it crashes, you don't get paid in steem but in steem power, or in steem power and SBD. SBD is pegged to 1$ worth of steem, ...

It's better to get paid in steem than being paid steem power, because you can immediately sell your steem. It takes three months to sell your Steem Power completely.

If the price of Steem crashes, the price of Steem Power and SBD crashes as well.

SBD stands for Steem Backed Dollars. The peg will only work as long as the underlying Steem, Steem Power have any value.

If Steem, Steem Power crashes, Steemit founders won't be able to print USD to pay the SBD holders. Nor will anyone else accept SBD as money.

If Steem prices go down, the author and curator rewards will go down as well.

The amount of my Steem Power didn't change, but back in the day one upvote of mine with 85%+ voting power used to be worth $0.02, but now it's worth $0.01, due to the value of Steem decreasing.

steemit was meant to have high utilization and not as an speculative object for investors

At the end of the day, if something has high utilization, speculating investors will flock to it. If you can't find investors or other means of financing your business, then your business will have a problem.

First of all, sorry for my late response (I left an open discussion with you in the other post... I was busy working in a new app and community).

Continuing with that discussion, what I want to add is:

In the actual system, this 6.5% is an imposition, you have to give this part of your investment to others. In this sense, you will try to give it to the correct people.
On the other hand, on the tipping system this 6.5% is an option. Then this could become a model similar to bitcoin, where the people use it to store value. Think about bitcoin and the 3 stages you mention... the people don't care about attract more people, they only store their bitcoins.

That’s a good point, @jga. I thought about it and came up with some ideas to encourage people to tip. I’ll discuss it in a third post.

Thank you for your feedback. These are really helpful as they help me improve the proposal.

I don't really have anything to add, I just want to see spammers to kick the bucket, but that's an impossibility. Bots will get caught up in honeypots, but manual spammers will still leak through. That sort of thing makes it impossible to fix the spam issue.

That's all I can throw in on this subject at the moment.

Frankly, I'm fine with manual spammers. If you open the new tab on Steemit, you'll see that the signal to noise ratio is around 1%.

I don't see much difference between a spam post and a low quality post that was an honest attempt. Most of those posts don't make their way to the homepage, trending, and new tabs in the current system. This won't change in the tipping system.

In the tipping system, the spam that makes their way to homepage, trending, and new tabs won't be able to profit from the reward pool. If some people tip them with their own money, fair enough, that will be their choice.

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