Market Based Curation Pools – to Increasing Curation, Demand for Steem Power

in steemit •  2 years ago

I’m posting this because I saw a desire from the Steem founders to have pools where voting resources could be shared. Unfortunately in the proposal described by @ned such pools will achieve next to no results. Actually they can make matters a lot worse if people just need nothing more than “Verified identity” to join and have N times more voting power. Investors will simple have no reason to buy steem and power up. People will power down, sell and join in a pool with just a few SP (steem power) and an identity verification

The Market approach to curation pools.

We have 2 groups of participants.
The fund providers [as in SP providers – those are accounts that provide the SP steem power for voting and receive a percent of the curation awards earned by the pool. In general they are big accounts who either do not want to find and content curate themselves, or are whales wishing to diversify their big curation power among tens or hundreds of curators and either profit from better curators with less SP or benefit by improving the system as a whole (increasing the value of their stake in the system)
The participating curators - those are smaller SP holders who believe they can use increased SP and with their good curation skills and effort can gain more rewards [even when sharing the curation rewards with the steem power providers]
The First fund provider or let’s call it curation “pool founder” - sets the parameters of the pool [we will see later what those are]. Later other “fund providers” can join the pool if they find those parameters satisfactory ( no need for them to have their own pool and/or can benefit from being part of a larger pool with satisfactory parameters instead of starting a pool on their own)

Other general notes:
From the point of view of the “participating curators” the pool works in the following way:
They vote with their own stake first and foremost!
The max amount they can expect from the pool [they participate in] to add to their voted is based on the – parameters they set and the competition from other curators in the same pool [more about this later]
Lets have an example example:
Account Curator1 has 1M Vests on his own, and participates in pool found by @smooth called “Smooth Curation Pool”. “Smooth Curation Pool” requires curators to split the curation reward at least 40/60 (aka leaving 60% of any curation reward to the “fund providers”). Smooth Curation Pool” also sets the "max. pool vote" at 100% the voting power of 10M Vests.
Curator1 has his own parameters, say like this: Min reward split 35/65 (aka he wants 35% of any curation reward achieved by voting with the pools voting power); Max pool vote power per own vote power – 5x (that is to say for each rShare of his own vote he wants Max 5*rShares vote from the pool); Curator1 “past curation ration” is currently at 1.65 [more about this later]

So, Curator1 makes a vote/curation on a post; First his own Steem power (curent rShares) is applied. 2nd His pool parameters are compared with other curators (aka ordered in comparison to other curators' one) and the max vote from the pool is determined. In our example let’s say other curators in the pool have better score than Curator1 has, so the max the pool can do is cast 3x Curator1 's SP (Curator1 's rShares for this vote/ at that time to be precise). So the pools casts vote of N rShares. N is what corresponds to 3M Vest (at 100%) aka 3x Curator1’s own vote. Late , 24h or so later, when the reward for this post is payed out , Curator1 gets 35% of it the funds (SD and SP); 65% of the reward goes to the pool [pool fund providers] (see Curator1’s parameters above)

The Market approach – Scoring curators against each other.

Curators should compete amongst each other for the added voting power (and rewards) from the curation pool(s) for best results for everyone in the Steem ecosystem. I propose 3 parameters here on which the competition is based, those 3 in conjuncture with the parameters set by the “pool founder” determine if and to what extend each curators vote is followed/"matched" by pool’s vote. The pool vote is on/for the curator and pool’s behalf.

Curators' compete parameters:

  • Percent split (of the reward with the poo)l - the smaller the reward percent is for the curator, the higher he should be in the ranking (as it is more beneficial for the “pool fund providers” to keep a bigger cut of the reward for themselves).
  • Max pool vote power per own vote (by a curator) – This parameter has several layers (and so both from the fund providers and curators perspective). The most important here (and maybe in the whole article) - This encourages curators to actually buy Steem and power up. Having a bigger SP of their own increases the bases from which they can leverage!. That is to say if curators require small enough cut for themselves, have good past performance (par. #3 below), there are enough pools ‘lending’ steem power to good curators; If all those are true such curators are encouraged to buy more steem, power up and use the leveraged SP provided by the pool(s).
    -“Past curation ration/performance” – this is how much curation reward the account has had in the past for each 1 rShare of vote (curation) (or SP if you prefer) in the last say 30 or 45 days. Good curators earn bigger rewards for each vote, is the basic idea here. Each account starts with a basic min. score (aka if you vote for your own post, at the 30 min mark, and no one else up votes it),so each account has a score and each account's “Past curation ration/performance” is a measure of how much better each account has performed compared to the base score . This parameter favors “good curators in the past ” – Why is this important? Because fund providers want good returns on the voting power they lend!

I propose simple ordering of the curators based on the 3 parameters above
Score = Percent split of the reward with the pool * Past curation ration
Then the pool determines if (and to what extend) the curator vote will be matched with a vote from the pool. That is to say the pool checks what max amount of vote it can make for this curator if all curators with higher scores have requested pool vote at the same time. [this might need some twitching but this is the basic idea], and casts the max ‘allowed’ vote. The reward for the pools vote is split between the pool (aka fund providers) and the curator upon payout.

Other Notes

The "pool founder" can set the terms of accepting curators in the pool – He can accepted every one, or he can require ‘identity verification’ before accepting a curator. Somewhere between those 2 extremes is to allow everyone to join as curator and the "pool founder" having the right to remove accounts/curators from the curation pool (for example for gaming the system by having multiple accounts to avoid the pool’s “max pool vote” [see above])

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Great. We've been discussing these rev splits as well as the ability socialize rewards among a a pool. Overall it appears we're thinking similarly. We'll publish more thoughts on this idea at the right time

Yes, if we consider it to be a "new economic system", and not just "blogging platform" , we would definetly need more economic tools.
As easy it is for someone in traditional economic system to borrow some money to buy a car and start a career as Uber driver - it should be even more easy for someone to borrow some SP and start a career as Steemit curator.
We should have wallets showing what's is our own money and what's under our management , and the loaning should be able to take back borrowed SP any time.
It's just @steemit account shouldn't be used for that, it should remain just private enterprise .