Economic model of steem like blockchains
Since I had the clash with the founder of bearshares i have taken a especial interest in the economics of the steemit like blockchains.
This is something i never did in the past because in steemit things are already done and can't be changed.
But for places starting fresh and there seems to be an explosion of those; studying the architecture of the economic model is very important.
VEST STEEM SDB
I am running a clone of the blockchain in the server i use to witness BS, I changed the names of the Assets and did a genesis block and have been testing different combinations to see how the actual model works.
In the STEEM architecture, VESTS are like company shares, STEEM is like the currency of the ecosystem and SBD are IOU aimed at providing a StableCoin to store value and inspire trust.
I know many bloggers never cared much for rshares, vshares and the such.
Now what happens is that as blocks are mined by the witnesses new STEEM coins are minted, but also new company shares (VESTS).
If you see the image on the left, you will see i started this iteration of the REV blockchain with an stupid amount of DREAM (the equivalent to STEEM) a number so big i can't pronounce it. ( 100,002,191,528 
one hundred thousand millions?) I left the 9.75% default inflation rate and in only 650 blocks, the witnesses have issued 2.100.000 DREAM, there is still no REV (the equivalent to SBD) because no one is posting so no rewards have been created.
I have not found another way to issue SBD than the post rewards
So if we know that SBDs are debt instruments, and that they are only issued as post rewards, that means that the blockchain is paying you a 50/50 post half in STEEM and half in debt. (we just found on steemit a way to sell that debt outside like many BONDs are sold in the secondary markets in the financial world)
We should do well without it but the economic model of the STEEM B/C is SBD centric as an insturment of reduction of volatility
What about the VESTs?
In the beginning it is like a company issues 100 shares and lets say they are backed by X amount of money, in the case of the blockchain it starts with 0 shares and witnesses issue shares as they write blocks.
So when there are few blocks created the amount of issued shares is small, meaning that they have a higher value, but as time passes and new blocks issue new shares and mint new STEEM the value of both declines.
See the test blockchain at the moment of writing this has issued: 2.4 million DREAM and 144 thousand VESTS.
Something it is not clear to me yet is
If there is 2.4 million of DREAM (steem) issued due to the inflation, why the reward fund has only 500K, according the the setup, 12% should go to capitalization (i suppose it is the stake fund) 12% to pay for witnesses and the rest to the reward's pool.
But it does not seem to match the figures...
Another interesting thing, is that the initminer does not get block-producer rewards
That account still holds the 100 thousand millions of the initial mint, but is not increasing in SP nor DREAM stake, I guess it is the one feeding the stake fund with its rewards (Now you see why in bearshares they have bearshares and bearshare... and one of them is disabled as witness)
I had a previous B/C running with two witnesses producing blocks and they were getting rewards.
I came to the conclusion that:
If i were to start a blockchain the wise thing to do it would be to startit with a initial issuing of 0, so every one worked they way up and create value.
Also to not affect much the inflation and dilute the value of the company stake.
However it would be a silly utopian, agorist dream for several reasons:
a) What would be the incentive for people to join?
I guess only people wanting to work in developing it would adopt it
b) There would be no ways to raise funds since you have nothing to sell
Unless you premine for a while until you had enough stake to sell a little, but at what price would you sell it?
Since it is scarce it should be expensive, and how many people would e willing to buy it knowing that as the system grows it value dilutes?
c) Because of the previous it will be very difficult to have early initial investors
On the other hand you would be effectively selling the fruits of your work and not thin air.
I have my own sidechain used in the @reveur discord for small operations and backed by my meager crypto assets (5000$ that used to be 15000 STEEM).
I have much more to say, but i am used to get only bot engagement so i will stop here.
Please tell me what do you think?
How would you start your own block chain ?
In case someone wants to witness and play
here are the binaries in the git
https://github.com/nnnarvaez/ReveurCOIN-binaries
It does not ask for much as there is no activity, so a small vps will suffice, i am running a full node for bearshares a test full node for my blockchain and 4 instances of reveurd compiled in high memory mode and my server barely notices.
You can take a look at the inflation and other values here:
http://dev.rockdio.org/revex/
Thanks to julian @jga
If you like my posts, please comment
There is a bug in the current code so it is not possible to create SBD. Try to do it in your blockchain and you will see that it is not possible.
I created an issue and pull request on steemit if you want to test.
Good work! we need more people interested in these topics and bring more ideas to improve the blockchain.
I saw your issue... But i think it is different.
What i say in the post is that there is no way that I know off to tell the blockchain, hey lets print SBDs, they are issued as rewards not minted or mined.
Your bug i think is worked around(somehow) here:
#define STEEM_MIN_FEEDS (STEEM_MAX_WITNESSES/3) /// protects the network from conversions before price has been establishedhttps://github.com/steemit/steem/blob/master/libraries/protocol/include/steem/protocol/config.hpp
Line 245
price min_price( asset( 9 * gpo.current_sbd_supply.amount, SBD_SYMBOL ),What is that 9 in the code?
If I understand it properly, that is to calculate that the minimum price of SBD wont allow for the existance os more SBD than the X% market cap of the STEEM
Meaning that:
If the price ever allowed for SBD to become 11% or more of the ammount of STEEM the price will be adjusted at blockchain level to make it become 10% or whatever the chain setting is.
But I guess that check was not needed on STEEM because that block is from HF14 when there was presumably a lot of SBD in circulation because of the premine and initial STEEM supply that generated since the first reward some SBD...
I don't know, I would need to recompile my blockchain to have post payouts faster to see if SBD's are issued at all or not.
We want that the total SBD be less than 10% of the virtual supply. That is:
Here you see the 9, and this is the definition of the haircut price
Are you sure that should be a hard coded value?
#define STEEM_SBD_STOP_PERCENT_HF20 (10*STEEM_1_PERCENT )Why have a value hardcoded and a setting ?
I understand the difference between the stop printing SBD and lets start forcing prices to avoid becoming a banana economy... But if the print % is modifiable the adjustment should take from that setting.
Or I have it all wrong ?
BTW have you found in the code were are SBDs sent when you use the conversion feature?
Dan implies they are destroyed, but i haven't yet found that part of the code.
I think it's a very daunting task to start a new blockchain even if many of the problems are already solved or figured out.
I personally think that there are a lot of factors that are involved in the success of any given blockchain and that's why I have not invested time or money on others blockchains beside Steem.
But this is very interesting all the analysis you are doing.
If I wanted to start a blockchain I would need very good technical partners, a good marketing team and also some investors.
Posted using Partiko Android
Yes the technical part any geek oriented person cam more or less get it up and running, now the marketing and investor finding is what i find daunting and scary, especially knowing i am not social at all...
Trust me, apart from bot engagements, there are several ghost readers too!
Hehehe thanks!