Why Short Sellers Can Improve Curation

in #steemit10 years ago (edited)

No one likes short sellers, no one likes down voters but both are key cogs in the machine that sets market prices.

We need to allow and daresay, encourage short selling of posts.

The overvalued nature of some posts is often cited as being a sign of a rigged market.

This "unfairness" frustrates some users who then leave. Endless debates ensue on how to make three rewards more fair. Many solutions are heavy handed top down ( like a max value cap on post). Let's identify the real problem and find market based solution

Some posters, trade at high multiples

Sometimes this happens because, trend following bots "invest" in curating every post certain authors make. some have proposed more metrics to help them select better content. This might help humans at first but bots would adapt.We will never beat the bots without a market based solution.

Enter the Short Seller!


Financial markets deal with these issues as well. Left to there devices, bots and other trend followers might lead to the wrong assets trading at high prices. Short sellers, of which there are typically much fewer, help keep the prices accurate.

This works because though they are fewer they reap huge rewards when they are right

We Need Better Shorting on Steemit.

the flag doesn't work because it is linked to reputation. No reason to trash a rep because a bunch of bots upvoted a post. We need a downvote that only impacts post vakue.

Make Shorting Profitable

. But currently shorts get no rewards. Let's give them reverse curation rewards. If a post is at 1000 when you start shorting and you drive it to 500, you deserve a big curation reward. With this in place they will focus on the big game. There is nothing to gain by shorting a $1 post. This will make rewards more evenly distributed.

But what of the short stigma, no one will use it?

it would be nice if this new downvote (not the flag) could be anonymous(maybe only on steemit?) But even if not I think it would only impact people that could handle it. Remember the whole Bernie sanders dollar vigilante flag issue. If you are making a lot on post you won't be as upset at a downvote. I don't think there would be much money in shorting lower value post.

I think this will help humans vs bots

it often takes a human to go against the grain. Shorting should be an easy way to beat the bots and eventually improve them in the long run.

Won't it upset people who are "shorted"?

Yes, look at response to any muddy waters, off wall steet research, or similar report. We could add safeguards though to focus shorts in the right area. An uptick rule if you will. There can only be shorting if post go over 100 votes $100 or some other arbitrary metric. This ensures minnows won't be impacted much.

So Let's Welcome the Shorts, They will Improve Price Discovery and Make Steemit More Fair!

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It's an interesting idea but I don't personally agree with it. We don't have short selling in all markets and I don't think Steemit is suitable for this.

Thanks for the comment. It's really helps when it seems like multiples (post rewards) are too high. This is the natural remedy. I wouldn't recommend it but I think it's the natural solution to the problem we are having.

Although this is somewhat theoretical. Id be pissed if shorts got to my best ever post in the next five hours.
https://steemit.com/steem-ideas/@dennygalindo/a-day-of-whale-abstinence-will-answer-the-question

It also could create false incentives in the case of downvoting. I wonder when it becomes just a numbers game.

Which is false and which is true? Maybe we are falsely encouraged to hop on trending post today( or maybe ignore them). I think a more balanced platform would be more attractive and this is the natural way to make it happen.

We need more shorts!

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