What is wrong with Steemit rewards system?

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Lately, I have been having love hate relationship with Steemit. We all love Steemit for various reasons, that's why we are here. Otherwise I wouldn't be writing, and you wouldn't be reading. While daily dose of praise is a positive and healthy for the community, I tend to focus on critical thinking and pointing out things, in my opinion, not working well and need to be fixed.

Rewards system: why is my post rewards decreasing as time passes ?

Unless you are in a trending category, you must have noticed that rewards of your post keep decreasing as time goes by. By the time it is payout day it decreases as much as by 40%, if not more. It probably varies, but the point is where is that money going? Now, you thought you did great: put your contribution out, people enjoyed it and you are being rewarded; all of the sudden your reward starts tanking like a bad news in stock market.

Some might say, well steem and sbd prices fluctuate in the market, that's why you are seeing this change. That is not entirely true. While steem and sbd prices do have impact in the value of the rewards, that is not the reason. The reason is the algorithm. Because of the limited resources for rewards, as other posts become more popular, rewards from older posts are siphoned towards compensation of newer popular ones. While it is understandable to have a mechanism to manage limited resources of produced Steem, I think it is totally wrong to take percentage of rewards from older posts to accommodate newer popular ones for multiple reasons:

1. It is deceptive. It give false hope and expectations. Now lets say your post is a success day one, made good impression, collected decent reward. You get a good feeling, that motivates you and you get back to work to produce some more quality content. After few days you realize your reward got slashed, and get a feeling that you have been robbed. All would be good if you weren't given that initial hope.

2. Trending posts do not need any further rewarding, that necessitate siphoning from older posts. Let's be honest here, trending posts are most of the time by the same authors, who get automated curation votes from bot whale curators. This is not a secret, and I have nothing against it (not yet). These authors works are well deserved, most of the time reason they get auto curation votes by whales or whale bots is because they are in trusted category of authors. They have earned that reputation. However, the problems is, do we really need to siphon rewards from older less popular posts to give trending posts even more rewards?

3. Discouraging for curators. This is directly linked to the point number 2. Curators, especially with higher voting power, would be discouraged on curating on less popular authors, regardless of their content. It is just common sense, to put the investment of curation to a proven authors, because it is guaranteed based on current system to return handsome curation rewards. That is part of the reason most of high power curation is automated. Why curate on emerging authors, when it is a gamble, and most probably the value of reward will go down, hence curation reward would as good.

4. Discouraging for authors. This is directly linked to the point number 1. Emerging authors, while get the feeling of deception, start getting discouraged on spending hours and hours in producing quality content after seeing their rewards keep disappearing. I don't think it will stop them from producing content, especially those who know their stuff will continue with their content production. However, now they would probably compromise on the time they spend on their production. Quality will start meaning less and less.

5. Competition. This creates unfair competition and unhealthy competition. Because authors and curators are not competing for the best quality, rather competition is how to stay hot and/or trending. As I mentioned above, there is monopoly for trending, for small group of authors and obviously curators. It should be redesigned to motivate all to compete for excellence in quality, regardless of your established connections.

What is the solution?

How about if we reverse the process. Let's give less rewards initially, maybe reserve a portion of Steem created for reallocation. By the time its payday, if there is reserves left reallocated proportionally. It would be much more pleasant surprised to have initial rewards low and see them go up by day 6, regardless of popularity rate.

In the next blog post I will address some other issues that of similar concern. Since this one alone is a big problem as it is, I don't want to clutter it with other issues, so we can focus on one. Let me know what you think.