Solution to the 30 Day Reward Pool Fill Up. Please, Tell Me You Can See The Benefits, Mr and Mrs Whales.
Withstanding the Double Whammy of Rewards Removal and Value Reduction of a serious nature for at least the next two to five months made yesterday a tough day every which way round.
The Whale Experiment eventually seemed to work out but not without a fair bit of damage along the way.
Now we have HF 17/18 and a seven day wait plus the rewards getting decimated. If the plans are exercised as I suspect, this will take about three to four months minimum to become operational in full rewards capacity with the rewards pool full. In the meantime, expect 80% lower than normal rewards, then 75%, etc. It will take a long time.
We have all lost a lot of rewards on active posts and momentum in various different ways.
There is of course a solution!
A better solution than the proposed system, I hope you agree.
On a daily basis, the interaction with the blockchain produces about $10,000 of which about 70% is distributable as rewards. The problem we have is that we have no rewards pool because we are moving from a 1 day to a 7 day pay-out period and that has to be based upon a 30-day moving average of something which is supposed to be comprehensible - did you get it? No ... nor did I! It does apparently make the computing of rewards a lot easier for the machines which do the calculating .. Bless!
When you think about it , we don't actually need more money in the rewards pool, we need about the same! Rewards are still paid out daily, just 7 days later than now.
What is and where is the existing rewards pool? In addition, how much was thrown in from the posts which were still active at the time of the Hard Fork being triggered? Are there records of these? Of course there are.
So, what will building a 30-day reward pool do?
It will create a non-income producing asset.
Due to the powering down stipulations, 13 weeks gives the rewards pool no time to react to anything unforeseen. Hence the entire rewards pool would need to be held in steem, not steem power, depending upon scale. This is, I suspect, a very large driving force behind this development as Steemit Inc. certainly does not want a non-income producing asset. It also probably would like to free up some working capital.
The new system will try to even things out through a 30-day voting density average hoojamaflip.
).
Thereafter, as the rewards pool fills up its 30 day requirement ($210,000), the rewards will start out meagre and slowly get bigger as each week goes by.
To put this in perspective, $7,000 at, say 25% ($1,750) will take 112 days. I cannot see anyone accepting a 25% paycut to pay for a non-income producing asset that people generally don't want.
What about a 12.5% pay cut - more tolerable but can you wait 224 days? That will be your Christmas present.
Obviously the community of steemit is paying for it in more ways than several.
How about we get it done and dusted inside a week?
Sure there will be stuff to sort out afterwards. But ...
When you think about it, $210,000 HAS to be removed from the rewards pool, albeit via a function of a 7 day delay. This 7 day delay is being charged at a 30 day price!
Who is paying for the right to have an non-income producing asset? We are.
Who owns the rewards pool? We do not.
There is another way ... which I believe has more merit.
Week 1 - $49,000 (plus the post value from day 0 and the existing reward pool from pre-hard fork).
In the steemit account sits 1.5+ million steem. Powering down to the extent that it has does have its benefits! We don't need it all - just a lot of it.
Over the first seven days (no pay-outs) the same generation of steem happens on the blockchain - so assuming the numbers, $70,000 is generated. The rewards pool gets 70% of that - $49,000 income -
After 7 days we have $49,000 in the pool (plus the value of posts which were live at the time of the switch). Also add in the rewards pool which was allocated but not distributed at the time of the Hard Fork.
We need a rewards pool, according to our witnesses of $210,000, being 30 days rewards
We have a shortfall of $161,000.
Where are we going to get that from?
Easy!!
The steemit account contains 1.5 million+ steem.
This is the ideal scenario to make use of it for the benefit of the platform.
If we cannot use that, I am sure that there will be a few fine whales willing to make up $161,000 worth of steem!! I could tell you who has what but that would just cause embarrassment - I am sure that the fine whales will step into the breach as leaders on this community-oriented platform. Poloniex has so much steem which has been gathering dust for months!
Now we need the loan because we need things to be paid out AND we need to leverage our position. If we pay out at 90%, retaining 10% for the rewards pool and remembering to pay interest to our lenders ...
There are many ways to skin a cat, they say!
Take the $49,000 and the add the daily $7,000 and then add dollar for dollar from the steemit account. Within a week you have over $100k if we accept a 90% pay-out, including all pay-outs and interest payments, Offering 12 to 15% on a secured loan - best deal in the world apart from CAR!
My thinking then says, maintain the payments at that level (90%) AND build the pool even further - every week we can get another $10k into the fund, dollar for dollar. This can be put to use in SP. Over time, the fund will get to $210,000 - the figure sought by the witnesses but it will have been created and paid for and, hence owned by the community of steemians!
Steemians WILL OWN THEIR OWN REWARD POOL
I could try to do this myself but ... share the lava eh!!
This is how it would work:
Green for no pay-out and Red for Borrowing. We are now on Day 2
First day of borrowing, $ for $
Into it, three days of borrowing
We are reaching the peak now. Maintain and service debt level
This may look complex. In fact it is terribly simple. Read the column headings - I have broken it right down so that you can follow the mechanics of the cashflow.
Let me know if you would like as copy so you can play with the myriad of variations available.
There are many ways this can be done. It is a win/win and we do not need any more drama!
There are some absolutely amazing things about steemit.com - truly astoundingly clever people with ridiculous Hard Drives and software between the ears. Then there are the blind spots. Please let the community be Decentralised as there are some people out here. Some of these people are capable and experienced.
Here is a cracker: In the White Paper ... still:
"SP can only be converted back to STEEM over 2 years via 104 equal weekly payments."
Confusion reigned and they all got wet.
Follow @ebryans for Content:
I could try to do this myself but ... share the lava eh!!
This is how it would work:
There are some absolutely amazing things about steemit.com - truly astoundingly clever people with ridiculous Hard Drives and software between the ears. Then there are the blind spots. Please let the community be Decentralised as there are some people out here. Some of these people are capable and experienced.
Here is a cracker: In the White Paper ... still:
"SP can only be converted back to STEEM over 2 years via 104 equal weekly payments."
Confusion reigned and they all got wet.
Follow @ebryans for Content:
What you are describing is a very pragmatic and logical solution. The problem is that at a technical level it is actually challenging to implement. The rewards pool does not actually contain STEEM coins. It is a virtual pool representing coins that haven't been created yet.
To actually implement the change would require another hardfork, which would take several weeks (possibly more than a month) to develop, test, and deploy.
It is a short term problem, and spending the developers time on this would pull them away from other changes that are intended to improve the platform in the long term. It would not be in the platform's best interest to spend time on this change.
People really should be less concerned with short term rewards, and focus more on how we can improve the platform to add value in the long term. Complaining about a temporary short term decline in rewards is counter productive to that IMO.
I hope I did not come across as moaning about rewards - I hope I came across as offering something which can work! If the community is, in effect, being asked to buy 30 days of rewards - an asset which has no derivable income, and is valued at $210,000 - then I think that there ought to be some consideration of how this might be implemented.
Steemit Inc. has played a clever set of cards. An un-tradeable asset? Sell it and get more steem into an illiquid state.
If we are - as a community - to buy this asset - we ought to have a little understanding - I bet you most people are unaware!
Is there a protocol whereby we could pre-mint? If we were to have a 30 day supply rolling at all times, would that resolve the issue?
An Investment imposed upon the community of $210,000 is a hefty assumption!
The account would be then ranked at Number 20 as at today. To HAVE to spend that kind of money, you would expect a LONG TERM benefit, the short term is just the mechanics of the transaction.
I hope you understand where I am coming from.
There would be solutions housed in a securitised set-up. The problem is that if the rewards pool is not an asset which has a verifiable value, why are we buying it?
What form would the certificate of ownership take because it is a non-platform entity.
I am sure you think I am being unhelpful ... I assure you that I am not - I want to be able to design a solution around the news that the rewards pool does not contain steem !
Thank you my friend
We are not buying the rewards pool. The rewards pool has been and will continue to be coins that have not yet been created yet.
The opposite is actually closer to true. When the blockchain produces new coins, the community must pay for those (when they are sent to an exchange and sold). If the blockchain doesn't produce or create new coins for a while, then the community has less to pay for.
It would not have been possible to pre allocate the coins that were needed, without breaking the inflation rate that was set and agreed upon in HF 16.
The 30 day rolling supply is the state that we will be in once the pool is filled.
The rate at which the blockchain is filling the rewards pool has not changed. The same amount of virtual coins will be produced. The only difference is that a lot larger amount of coins will be held in the virtual supply, instead of being turned in to actual STEEM coins pretty much right away, as they were when the pool only held one day of rewards.
I do not understand something which is fairly fundamental and I hope you can help me here ... Rewards are being taken out of the distributable rewards pool to fund the filling of a 30-day supply of coins, so it seems that the printing of money is happening at the expense of the community, therefore we are funding this and should have a benefit - my suggestion simply recognises the reality of the mechanics such that the people who pay for something like this actually gain ownership. Stands to reason!
Or am I barking mad?!
Probably ... but not evidenced here!
The need for a 30 day supply has no evidence on the platform - another reason ... maybe? It strikes me that a benefit from the 30 day supply is the most pragmatic approach.
The rate at which new coins are produced has not changed. The coins that are in the rewards pool do not actually exist yet. All pending rewards are a representation of coins that will potentially be created once the payout window closes. Until the payout window closes, the new coins are not produced.
So .. what are we doing? Let's get back to the job at hand! We never had a problem did we?
The main reason that the change was done was so that the rewards payouts from the platform will not be as affected by short term fluctuations in the price of STEEM. With the old model, a 400% spike, followed by a huge 5x crash would have meant that the payouts on the site would have gone way up, then way down. Users would have to factor that in when deciding when to post.
With the new system, the spikes and dips will be averaged across 30 days, so the rewards that are given out will be more evenly distributed across all the days.
The changes in rewards will now be more based on the long term price trends, instead of the short term blips.
Thank you for that explanation @timcliff, though it is a little away from the core issue - I am just concerned that people are ill-informed - $210,000 is a sizeable chunk of cash - do you think that people are aware of the situation? Do you know how long this will take? I would suggest 5-6 months ... my system - start as soon as the 7 days are up.
What about the talk about the importance of the 3rd world country people who come to steemit and are in it for the short term because they desperately need it? Something is not matching up to the words if all of a sudden there's a change.
Not sure what you are saying
There have been discussions about how Steemit will have a popularity within the 3rd world countries. Those that live in extreme poverty. The rewards to many of us would not matter if we had to wait 3 days, no I mean a week no, wait, now a month? If this is true the comunity must stop making these kinds of promices to people living in need. If this is true the 3rd world steemers cannot find a friend in steemit to help them eat or get medicine. I am no one with expertise to know what is going on but I find it uncomfortable with sudden changes that could effect so many people/countries. This could be one of the worst mainstream news nightmares for Steemit's future if found out by the press.
IMO Steemit offers great opportunities for people in third world countries, but it is not a guaranteed stream of income.
I understand. We all owe it to the growth of steemit to do our best to make sure it's not just for the few to take the rewards from the many? Steemit will suceed if we, the community, make it sucessful. The bigger steemit gets the more the competition and the mainstream will try to knock it down. The big fish who ruled as they wished will become the destruction of Steemit. Looking away won't make it go away.
Something doesn't make sense to me with this either, which you summed up pretty well here...
Now this may be a long shot (and possibly a reflection of how my mind works), but I keep going back to... Hmmm, STEEM keeps flirting with all-time lows. We might be a bit higher for now, but maybe we need to think about inflation. Perhaps, as part of this latest experiment, let's see the effect of temporarily reducing rewards to see if it helps stabilize (and possibly even increase) the value of STEEM. If it works, people's grumbling will be offset by their increased confidence in the STEEM / STEEM POWER they already hold.
Just some thoughts from my
derangedcynical mind, that may have no basis in reality. lolIf you read this carefully (and I was slightly treading on eggshells as I always seem to be unearthing the true reasons for stuff. $210,000 tied up in a benign asset open to risk and producing 0 income. The clever thing to do ... get the punters to buy it!
How about ... all that steem can do is laze about - pretty ordinary asset to have - let's get the community to buy a whole swag of it - like a million of them - reduce the liquid stock and we get some working capital for the departed's new project!
nice post
Thanks @riostarr - nice name!!
Did you actually get what I was saying? I had to sort of phrase a couple of things a bit carefully. I seem to always be the one who can see the reasons behind decisions - this one is a classic!!
Thanks for the thoughts @ebryans - it is indeed complex and i do not understand a lot - one questions , why do you think it will take 3-4 months to re-fill the reward pool and not as some whales said 30 days?
If you do it in 30 days, that is $210,000 which is $7,000 Every day - 7 days causes enough heartache!
So what discount is acceptable? 25% - four months.
I think 25% to get people to buy a bad asset at a 30 day price - it is a 7 day product!!
That takes a lot of steem out of circulation which cannot be sold for sake of guaranteeing the rewards. It gives steemit just over $200,000 working capital which can follow the xleader
Hmm actualy now we can see who is here for the comunity and who for the money right ? I personal dont have problem with the pyment never was from the top erners here . Maybe until the rewards are so small we all got the chanse to show we exist . Sadly i see ( maybe im not right ) even more dump on the comments and vews ............ sadly the reality is that not many people are here for the funn of blog read and meat people , but for the money ! Im just intrested all this top 20 earning autors ........... how you feel in the place of minnow with cents payout ?
Happy steeming !
I tend to comment on these matters because many people do not understand or cannot see the reasons. The community is being asked to put $210,000 into the 30-day reward pool - that is a lot of money. What does the community get in return?
My preference is to enjoy the interaction with nice people like you!
Namaste.
Just because you are the writing guy you provoke me to answer you with a short story , just for the funn of it :
Time and money !
At 20 years he was a workaholic, and at 30 he became rich.
When turned 38, his business suddenly collapsed, his wife left him and he fell ill seriously.
While recovering, he was basking in the sun, talking to his children:
Nice story and a different slant on a lesson we should observe - you can start a new business, you cannot recover time lost with your family. Thank you @patelincho, Following you for more pearls of wisdom.
I am following, @patelincho64 > Great story
If you always put limit on everything you do, physical or anything else. It will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them. Bruce Lee
Thank you very much :)