What happens after a Chain Split?
Hi, @jayplayco here.
There is a lot going on with Steem and it is worrying and also tiring for a lot of users and investors.
Steemit Inc., Witnesses, and a divided community are currently not really finding a hot spot to agree on and each side is in the moment busy to convince each other. As far as I have seen these kinds of negotiations in my career it will end somehow with the fact that everybody will also lose a big part.
1. Short summary only with facts about what happened.
- Steemit Inc. is sold to Tron.
- Tron announces partnership and release information like Token swaps and migrating Steemit to the Tron Network. Most of the information that has been released on Medium or Twitter is now deleted but can be found on several sources.
- Witnesses decide to soft-fork and release 0.22.2 which disable Steemit Inc.'s related accounts to vote for witnesses, powerdown or move liquidity.
- Steemit Inc. (Tron) partners with exchanges, let them powerup and setup sock puppet as witnesses to release a 0.22.5 version, which is reverting the measurements of 0.22.2
- Witnesses and community members are gearing their Steempower to avoid a forced hardfork.
- Several meetings between Witnesses and Tron, Justin, etc. happen but don't really find consensus.
2. What do they want to say?
The emotions on this are high, so I tried to keep only the essence of it what each counterpart is trying to say.
1) Steemit Inc. (Tron)
- Steem that has been bought with Steemit Inc. belongs to Steemit Inc and can and should be used as wanted.
- Under the current circumstances, Steemit Inc. fears that as soon as the sock puppets are released their funds could be locked again.
- Softfork 0.22.2 did not had any ill intentions.
- Sock puppets are destroying the governance and the power should be given back to the community.
- Steem that had been bought from Steemit Inc. can't be used for anything else than the Steem community.
- Divided into different opinions as it should be in a community.
- Either choosing a side and making their comments on it.
4) Investors (non-preminded)
- Heavily concerned about the current situation.
- Two bigger investor groups(?) are speaking out (@theycallmedan and the KR community)
2. Where we stand.
The situation is changing each single day, but each countersides are currently staying on their arguments not backing up. There are mainly requests from both sides but even baby steps are not sure as also the voices from the witnesses may not be united in a short period of time, which may be the difficulty, beauty and downside of consensus.
Also the witnesses came to a conclusion that it is better to let a representative speak for all, then having everybody their individual sayings to be able to move forward.
3. What are the scenarios after a Chain split?
Please be aware that these Chain Split scenarios are from now all personal views counting different influences into it.
1) General parts
There are small differences which part would fork themselves out, but we keep that detail just aside.
- Normally there would be a snap shot from point X, where a sisterchain would start the chain with their own witnesses.
- If we call the divided chains as Steem-A and Steem-B, users should (would) have from that moment both Steem-A and Steem-B available.
But there could be also a setup, where the sisterchain allows only to MOVE Steem as atomic swap to another chain. This could as an example prevent having Steemit Inc. any influence without the need to fork any specific stake out of the chain.
2) The future of a Steem under Steemit Inc.
I see the following scenarios are possible because there is no other way than to give up on the investment on Steemit or to increase the value of it. And the chain would not be able to increase value when there are no resources put into it to increase the overall number of users.
- At least 30% of the user base will boycott the platform and move on to the sister chain. (USA, Germany, Canada,etc.)
- Steemit Inc. will have to utilize one of their highest assets, www.steemit.com and make changes.
- Engineers will need time and effort to get into the Code behind Steem but resources should be not a problem.
- Steemit Inc. under Tron will move on with easier logins, instant signups, etc.
- Resources to bring changes to the UI that are needed for Steemit Inc. would be also something where resources would be put in.
- Marketing, Events and stabilizing the price with their resources to increase users.
- Pushing to get Steem on more exchanges.
- Keeping Steem on bigger exchanges.
- Witnesses would be probably new ones, as the current witnesses would never support it.
- If Steemit Inc. is not able to bring new users and a new dynamic on board, the community will not survive.
3) The future of Steem under the Community.
- There would be from Day 0 a small but very fine English speaking community available. (Estimated 500-800 active users)
- They would probably fork the Steemit Inc. stake out and use it as SPS or similar for the community.
- Frontends like Steempeak, esteem or busy.org would be used (when they move with the community)
- The community would need to start to find exchanges supporting them. There are currently some that have expressed interest, but it should be carefully handled as they could also just use the noise marketing to profile themselves for the moment. The overhead cost to keep Steem on an exchange without enough traffic is a higher burden than normal users know.
- It could be harder to find enough liquidity on any exchange that is handling the community Steem.
- The community would need to find either an investor or crowdfund enough money to fund the development of the blockchain.
- The idea to uses SPS funds for developing is interesting but only possible when the community finds enough investors to buy their token. Otherwise, the SPS amount would be to low in USD's to have developers attracted to the chain.
- Most of the investors that bought Steem would rather rush to sell the community stake into any possible market, which would be a very heavy sell pressure when nobody is able to make a buy wall.
- If somebody is interested in how community-based token prices are evolving, just need to look at the wide base of Steem-Engine Tribes, price, and volumes.
- Witnesses would need at least 5-600USD converted from their activity to keep their servers running. If the logic doesn't change for the community chain and witness rewards, they would need at least a price of 0.07USD per Token to keep it even.
- The only source of money would be either to squeeze the community itself or get funding for the community from outside. And for that, the community would need a dedicated person who is doing the funding for them.
- A bigger investor group like the KR community and Korean investors (who are not always Steem Users) would be not likely part as investors on this chain. (which would eliminate about 50% of the volume)
4. What should we do?
I can't give you an answer on that, because everybody (including Steemit Inc.) will and is going to decide with their SP and vote on the future. I just know what will happen under the current circumstances and that a community chain is indeed a cool thing, but without the needed resources just cool.
As a content creator, I would have to choose the right platform for me where I can reach more people and increase my visibility. As an investor, I would need to choose the platform where I can see that my investments will grow. Maybe this interest needs to be split within our reality. But maybe, each parties will find a way to live together.
Beneficiaries to Steem.dao.