RE: Sharing UPVU Proxy Witness Vote Results(Updated. 2022/4/17)
Yes, we were discussing this topic recently in our witness channel and I'm almost on the same page as you are. Here is a summary of my thoughts on this:
In general, also I'm for regularly converting/selling the SBD to STEEM and then burning those, as this will have positive effects on the price of STEEM and also curators will earn more again (which comes with other positive side effects). Basically it could be used for having a better controllable SBD price (pegged SBD would then probably to some degree work the other way around too, currently it's only pegged to be >= 1 USD).
The question is, how we would do this when selling on the market. Manually? We could have one active proposal over the return proposal (when enough of us vote for it), which receives the max available daily amount in a by us controllable account (as steem.dao has no keys). This would not require a new HF/SF.
But I think moving the inflation from the DAO to the authors would not benefit us in the long run (not 100% sure, but going back would be difficult). Doing it manually (without moving the inflation away from the DAO with a fork) gives us more possibilities to react to whatever might happen in future. I would not even say that the target SBD price should be 1 USD. Maybe 2-3 USD to get started. We could burn also SBD, in case the price goes below our target.
Thanks for your response.
However, I am not in favor of simply doing it to push the price of SBD down, but more to raise the price of STEEM up. A high SBD price is hugely bullish for STEEM and for people using Steemit.com. I'd like to try to help STEEM while also not crushing the price of SBDs, if possibe.
We have roughly $10-12 million dollars worth of SBDs sitting in the DAO that is doing nothing currently. I think those funds should be used to buy and burn steem over time and I think the inflation to the DAO should be turned off or redirected towards author rewards, which is where that inflation came from in the first place. I think the DAO should then be discontinued as we have seen time and time again that it ends up taking more value than it ever creates.
I understand that my ideas require a fork, but on the whole a fork would probably be worth it. If someone ever gets ahold of those SBDs they could crash the market SBD price and net quite a windfall for themselves. We should remove that possibility while also benefiting the price of steem and the ecosystem.
That being said...
If what I am suggesting isn't possible, and replying to your ideas above...
Could the inflation SBDs from the DAO each day simply buy the STEEM on the internal market? The internal market pulls steem/sbd from external exchanges correct? So, purchasing off of the internal market would eventually also cause buying on exchanges... am I right on this?
I guess this would hardly be possible without SBD losing value to some degree. In my opinion, the highly priced SBD inflates STEEM more than we need, but you as market pro may know more details in this regards than me. I'm no economist :)
Witnesses, the driving force of the blockchain, earn their rewards only in VESTS and they don't have anything from the high SBD as long as they don't start to make daily posts and upvote them or use a voting service. The result is exactly what we have now. Some top witnesses doing almost nothing but earning a lot by creating daily posts.
This leads to less interest for making big developments (not for me, because I will always keep to my goals, but you know what I mean). Witnesses should use part of their producer rewards for investing in growing the infrastructure, hiring developers etc. Now with a few thousand bucks a month that's kind of impossible for most devs/witnesses.
Yes, this goes in the direction I had in mind. I think, before acting, someone with more market knowledge should evaluate all things regarding optimal inflation and the long term effects of a highly priced SBD on the STEEM price.
Perhaps, though I don't want us to get caught up in the dilemma of trying to make things perfect instead of simply doing something that is very likely a net positive.
I can tell you first hand that high SBD prices are extremely positive for the price of steem, and for getting steem powered up etc as it has been a motivator for me to keep a large stake of steem powered up and use the steemit platform. That being said, I think a higher steem price is what is going to bring in new users and more growth as that is what the crypto market watches. Not to mention a higher steem price makes witnesses earn more in USD terms which also encourages more development etc, like you mentioned above.
In a perfect world we use the SBDs in a way to benefit steem without hurting the high price of SBDs too significantly, which is why I think perhaps this is something that can be dynamic like you also alluded to in the past. IE, we could target burning 10k SBDs per day, but have a floor at $3 SBD price, if the price goes below $3 then the burning of SBDs stops. This allows us to use our asset ($10-12 million worth of SBDs at market prices) while also not killing the golden goose that is high SBD market prices...
Overall, I think the risk is worth the reward considering the stagnate state of steem currently. If STEEM were showing robust signs of growth and activity I'd error on the sign of caution, but it is the exact opposite with STEEM heading lower and lower over time in terms of value as well as activity, especially development activity.
Acting now, while there is still moderate interest is likely a better move than waiting too long...
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Just wanted to add one note as well, I couldn't agree more with your comments regarding top witnesses not doing enough to grow STEEM, there are some glaring examples of several of the very top witnesses doing nothing and very happy to keep the status quo so they can continue to farm away, though I don't need to post names here. :) You are the exact opposite of that and far and away one of the very best witnesses STEEM has and we are lucky to have you. Thank you for all your contributions!
Thanks for your input!
I agree, some things in life just need to be experienced to make the best out of it and to improve them further. Basically, when doing it manually, we have the possibility to react and stop it at any time, if the results should not convince us.
That sounds like a good way of trying it out smoothly without the risk of doing any damage to the SBD price. So, I for my part would be ready to support such a DAO proposal ;)
Awesome, so what's the next step? Lets get this ball rolling!
I shared your ideas in our witness channel to discuss it with the other witnesses.
We will keep you updated ;)
How are things progressing in this regard?
Also on another note, I suspect that there are potentially several witnesses in the Top 20 that are being run by the same person. For the health and distribution of the STEEM network I think it is important that every Top 20 witness be a separate individual... with UPVU basically deciding the Top 20 at this point, perhaps we can suggest to them some form of verification process in order to be voted within the Top 20? Thoughts?
No progress yet, but it looks like most top witnesses are in favor of burning some STEEM. We don't want to rush things though. Many of us are currently busy with other development stuff, so it may take a while until we come up with a solution.
One question was, how we would ensure that the trusted account, which will receive the SBD payments, won't go evil and send the collected funds to an exchange. In this regard, @starlord28's coming Steem Multisig tool might offer a great solution.
The situation changed a bit, because of some 'fraudulent actions supporting' witnesses entered the upper ranks and further steps needed to be taken. In my opinion it would be beneficial for the whole Steem world, if you would not proxy your witness votes to funds2021 and support real witnesses who actively develop stuff like @starlord28, @roadofrich and @marcosdk instead.
*Note, when I say "burning SBDs" I mean using the SBDs to buy STEEM and then burning those STEEM. The term "burning SBDs" is just a quicker way of saying what I actually mean. :)