Urgent Community Petition: Steemit Inc. to Stop 34 Mil SP Powerdown!

in #witness5 years ago (edited)

Latest Update 2019-02-05

Power down rate has been reduced to the normal systematic selling rate of approx 700 000 SP per month. Before the reduction approx 8 million SP made it onto exchanges. The reduction of power down is a step in a better direction.

Latest Update 2019-01-22

Power Down still continues. One good thing however is that Steemit Inc. has agreed to consider giving funds to a community elect governing body, if you want to be part of the public discussions please visit the Steem Alliance Discord https://discord.gg/U7kQC8J. Please continue to support this petition and comment below until the power down is stopped.

Latest Update 2018-01-21

Power Down still continues.

Latest update: 2018-01-20

@ned and the witnesses present in the Steemdevs Slack seem to have made peace. We asked if we could set aside our differences and work together to make Steem great and Ned said “Yes, I will”.

I further suggested we all take a breather, have some cold ones and enjoy the rest of our Sundays.

Hopefully the funds that were sent to Bittrex 3 hours earlier will be returned to chain and future power downs stopped.

The Petition!

As duly elected witness of the Steem blockchain, I hereby bring to the attention of the community a matter of utmost severity; which requires community unity to present a case of dissatisfaction and a vote of no confidence in Steemit Inc. and Ned himself; should the current 34 million Steem Power power down of the @steemit account continue.

D-Day is tomorrow, where 2.6 Million STEEM would have powered down to liquid form to be placed on exchanges and hidden from view and accountability.

I ask that everyone in the community who is reading this and agrees, to please voice your concerns and reply with "Stop the Power Down!" in comment on this post. Resteems, social shares and further upvotes to this post to will be of great help to enhance visibility.

Why is a Power Down bad?

  1. Steemit's stake will be 100% liquid, which means it can be dumped at a moment's notice and negatively affect the market price of STEEM. There have always been concerns on the bitcoin chain about Satoshi's stake and what would happen if it became active and dumped on the market, in this case Steemit's total stake across all its accounts, is well over 30% of total supply (circa 70 Million tokens/SP) and such market crash fears will be greater than those that exist on bitcoin.

  2. One of the unique features of Steem is the 13 week vesting period which potentially creates a new taxonomy class of Limited Circulation Token (LCT) or Limited Float Token (LFT), this concept enhances the stability of the Steem price, in that it is slower to react to general cryptocurrency market volatility due to the fact that there are limited tokens in free circulation and most are subject to power down becoming liquid. By making an additional 30% of the total supply liquid, begs the question of what is the point of powering up if the central entity is not leading the way in promoting this feature, then vesting periods might as well be done away with because the spirit of vesting has already been broken if the founder and founding corporation are not vested.

  3. Steemit Inc. is largely criticised by the community for its current lack of transparency, moving funds off of the chain will only serve to allow Steemit to further operate in an untransparent manner and erode the trust of the community even more. Untransparent actions could involve selling more than their current programmatic selling rate of 800 000 STEEM per month, outside of the purveyance of the community; dispersing their stake across multiple anonymous accounts which could break community trust by influencing voting on content and witnesses, as well as issuing unsanctioned delegations to their own end and that of potential nepotistic consorts, further eroding the rewards pool towards benefactors of their choosing.

  4. Moving funds earmarked for the furtherance and growth of the network to exchanges, flies in the face of the recent "Proof-of-Keys" movement which urged users to move their balances off of exchanges to blockchain wallets where thier funds are secure and fail-safes like multisig can be implemented. The recent hack on Cryptopia and historical hacks on Bitfinex, MtGox etc serve to re-inforce that point.

  5. Dormant Virus Effect - by dispersing their stake across multiple anonymous accounts, Steemit Inc, will be able to ensure that their stake will traverse to any forked chain that retains user balances or benefit from all airdrops that might otherwise have excluded the Steemit accounts and as such ensure that they have dormant power waiting to be unleashed on any such new chains and greatly reduces the attraction to fork to new use-cases of Steem or airdrop on existing Steem users for fear of airdropping on an undesired monopoly.

Events that led to the Power Down

Seven days ago, ex Steemit employee Johan Nordberg posted (on his own repo) a Github Pull Request idea for a hard fork that would nullify Steemit's account keys for the purposes of freezing or forking their stake out of the chain.


This idea sparked discussion between a variety of Steem stakeholders, witnesses and investors alike, where they took the opportunity to voice their dissatisfaction with the status quo and continual lack of communication, transparency and progress exhibited by Steemit Inc.

A few of the points being:

  • Steemit Inc having acquired a significant "ninja-mined" stake upon formation of the chain, done in a manner that constituted insider trading, by releasing buggy mining scripts with ambiguous instructions which only a few managed to figure out by the time they had amassed their stake. This stake has many risks, including those highlighted in the section above.

  • Hiring a compliment of allegedly 60 plus staff (some alleged to be nepotistic hires) before the late 2018 layoff and continually selling 800 000 STEEM per month to cover expenses; remember STEEM was valued between 1 USD and approx 9 USD during 2018 so their extracted value would have much more than today's USD value. Even with such a high extracted sell-off value and large staff compliment, all that was mostly achieved in 2018 was HF20, which had a hard landing despite Steemit inc. having sufficient sell-off resources to hire external, professional code validators.

  • The continual selling off of Steemit stake putting downward pressure on the STEEM price and CMC ranking; STEEM was once a top ten token and Steemit failed to capitalise on that.

  • The lack of desire of Steemit Inc. to openly collaborate with community developers to grow the ecosystem together and largely acting like sole custodians of the chain with a non-collaborative sentiment.

  • Continual delay of promises and roadmap milestones such as SMT's, which are now beyond a joke and almost past being relevant in the wake of many chains already offering basic token creation functionality. Many projects relying on SMT's, such as https://appics.com/ have now been left in the lurch as their ICO's depended on SMT's.

  • Lack of interest in investor communication, community communication as well as external marketing despite having hired PR staff during 2018. Ned's attempt at public communication via Youtube stream, dubbed "The Bridge" aired approx 2 episodes and then left abandoned without notice or reason.

Such discussion around the repeated failures of Steemit Inc. ensued and came to point where 60+ stakeholders, witnesses and dapp owners decided to move to a private chat which was created a few months back as a contingency to the Slack provided by Steemit Inc. Therein discussions were held over various solutions such as forking the existing chain to freeze Steemit's accounts, forking to a new token, entering into discussions with Steemit Inc. to establish a middle ground such as a community trust or governance model where Steemit would cede a portion of their stake into in addition to control of key github repos that should be under community governance or the status quo which nobody wants.

After Ned reached out to us offering to come to the table, a smaller focussed committee was voted in by the Slack channel to act in unison to first try to come to a mutual compromise with Steemit and this was further reduced to a few people who would engage Ned directly and report back to the committee. I disclose I was voted into the committee but am not one of the few in direct talks with Ned.

One of the first objectives of the talks were to establish a cease-fire where Steemit would cancel their Power Down in good faith that there would be no forking action taken while discussions were taking place. Despite assurances given, Steemit has not yet cancelled their power down and it will become liquid tomorrow, hence the urgency of this petition.

It has also been noted that Ned has made significant effort to engratiate himself with the public by appearing on three Discord shows, releasing the Hivemind post and creating an About Us page on Steemit.com stating their MVV (Mission Visions and Values), it is speculated this is all misdirection and only expedited for the sake of gaining public support in the wake of the recent happenings.

Steemit's Head-on Collision Course with the SEC

Recent media articles have shown that the SEC litmus test for a token being a security takes into consideration both centralised stake and development:

On June 14, the SEC’s Director of the Division of Corporate Finance Bill Hinman said that a key factor in determining whether a token is considered a security under existing regulations is the level of decentralization of the project. If a blockchain network is sufficiently decentralized and no central party has control over the majority of the project’s elements, including its monetary policy and development, the SEC director said in a speech that the native token of the blockchain network cannot be considered a security under existing regulation.

Hinman said: “If the network on which the token or coin is to function is sufficiently decentralized – where purchasers would no longer reasonably expect a person or group to carry out essential managerial or entrepreneurial efforts – the assets may not represent an investment contract. Moreover, when the efforts of the third party are no longer a key factor for determining the enterprise’s success, material information asymmetries recede.”

Given the stake Steemit holds and the level of centralised control over blockchain repos it currently has, will likely jeopardise the entire project into being labelled a security at some future point in time unless drastic measures are taken to reduce those two.

Article reference:

Further in another recent media release, the DASH Network have taken preventative steps to decentralise their token; by creating an irrevocable community trust where the greater network is named sole beneficiary.

With this setup, DCG took the first step to ensure that the Dash network would always have full control over the direction of the project, without resorting to the drastic and disruptive step of defunding DCG and developing an entirely new team to replicate its primary functions.

It also enables the network to replace the leadership team of DCG instead of necessitating replacement of the entire organization should it determine DCG’s performance is unacceptable.

Article reference:

This event in the Steem network creates a perfect opportunity to reflect on the captive nature of our chain in respect to the centralisation of stake and development with Steemit Inc. as the core, and come to a mutually beneficial roadmap for a decentralised future where both Steemit and the community can thrive and co-exist with the aid of a community governing body, thereby further distancing the platform from SEC securities classification.

My Position

I personally echo all of the dissatisfaction over the repeated value extraction exhibited by Steemit Inc. without giving back significant growth and progress to the network, however I strongly believe they have developer resources and contacts that are of benefit to the community if used wisely and efficiently, I am thus in favour of mutual discussions to come to an understanding between the community and Steemit Inc. to come to a favourable solution which will be a catalyst for growth and structural reform to protect our network from being classed as a security.

The above is my desired first course of action, failing which I am a servant of the community and will consider carefully the will of the community before deciding what alternative to support. To that end I have created a Discord channel with the placeholder name Steem Reform where anyone is welcome to discuss and voice their opinion, Discord is important because it is where most of the community is at and allows for both voice and text discussions. The primary objective being the petition to cancel the Steemit Inc. power down and then discuss a reform structure alternative for the Steem network.

Quick Reference of some other public statements

Please contact me in DM on Discord, thecryptodrive#8144, if you are a witness, dapp owner, significant stakeholder or community leader and would like your post featured here.














Calls to Action

  • Comment your support in the petition to stop the Steemit Inc. Power Down.

  • Join this temporary community Discord server https://discord.gg/b7hggWs to stand united and discuss a way forward for the network as a whole. (I will hand over this channel to any governance structure elected if they desire it)

  • Upvote, resteem or social share this post for maximum voice and impact; this is a decline payout post so your voting power will not be drained and will not affect the rewards pool.

  • Post your own blog posts about your views on the Steemit Inc. power down, including the tags #sos and #stopthepowerdown

Thank you for your time in reading this and I look forward to hearing your voices be heard throughout the network, wise words once said:

“Fools multiply when wise men are silent.” - Nelson Mandela


Ricardo Ferreira (@thecryptodrive)
BuildTeam CEO and Steem Witness


Image Reference: Pixabay



It feels like a game of:

Let's pretend we aren't centralized.

Isn't it kicking the can down the road.. It's their stake. I don't see what we can do about it, and I'm not going to beg ned to be a good player.

I vote no confidence but stop short of telling him what to do with his stake.

....nothing like a bit of seized asset forfeiture to bring out the commie's !!

He should shove his stake up there where he keeps his head... But he should do it by himself. (haha, did I say that)

Lots of men are starting to do it by themselves, nowadays (not self rectal examinations), and it's not all good...

Enter a subtle segue into dropping a link.... (it will make sense if you watch the dtube..)...
Loving this editing malarky!


It's their stake

This is the answer to all this drama, to be honest.

Wouldn't we all benefit from Steemit Inc powering down at a lesser rate?

Is there anything inherently bad in asking?

I personally hope they do power down and also sell.

Right now it is the worst of both worlds and this entire situation has highlighted that.

It's decentralized until there is a point of contention and then the stake is used to inflict power and fear on the community. (likely not even purposefully, just as a by-product)

T’is interesting how some have criticized Steem as being too centralized because of Steemit’s large holdings... only to get in a fit when their liquidation of those holdings would be the essential requirement for the decentralization they insisted was the ideal... 😂

I find this movement to be more worrisome than the power-down. Ned had an opportunity to realize that he was overreacting to something that wasn't especially important, and failed. That's a problem. But now all the top witnesses have the same opportunity, and are failing again, and once again escalating a situation that nobody ever needed to care about.

The complete success of Nordberg's troll of the whole Steem ecosystem, in which you are all collaborating, is ridiculous.

I guess I don't see how @ned / Steemit, Inc is overreacting when @thecryptodrive here is openly acknowledging that "60+ stakeholders, witnesses and dapp owners decided to move to a private chat {...} Therein discussions were held over various solutions such as forking the existing chain to freeze Steemit's accounts...." (my emphasis added but other than that, straight from the horse's mouth). We aren't talking about @ned / Steemit, Inc starting a powerdown solely in reaction to the github pull request. Actual top witnesses actually talked about doing this! And are actually admitting it in one breath while asking for the powerdown to stop in the next breath!

It was an overreaction because the technological ability to do that wasn't in the PR. If the witnesses wanted to decide that as a solution I suppose they could have, but 60+ people somehow getting a hardfork written, tested, and implemented without anyone ever telling Ned about it is a pipe dream.

The idea that they might have intentionally implemented an untested hardfork for any purpose is itself scarier than anything Ned has done.

Only one person issued the code and discussion ensued after that, the power down fuelled discussions even further.

Presumably that discussion did not include "let's implement untested code that is at best 5% finished." Someone would have had to do those things before a fork became remotely practical.

A fork is not anywhere near decided on and is just an idea being thrown around and voiced more so by some than others.

No one suggested that it was. You don't seem to be following the topic of this subthread.

It did not.

100%, you're right on here. It was I got fired butthurt, the employee that yells some stuff as they're being escorted out by security.

The more important thing here is how the discontented saw the viability of the moment.

Ned actually left the slightly more open format discussion Slack he created which had somewhere between 100 and 150 members, of which I was one for about 6 months, if memory serves me. So just for the record he started to withdraw.

How are top witness failing again?

Well, downvoting honest discussion is a good example.

not a top witness

Well at least there's something to be glad about.

"Sorry, I was mistaken" works well too

Steem lost a lot of credibility with the ninja-mine and it may lose even more credibility if you fork @neds steem away, because you will set a precedence that could later be used to fork anyone's steem away.

Also the damage from ninja-mine has snow balled and there is no stopping it. @ned and @dan used their ninja-mine to upvote a small group of people. Then these people created a voting ring and have been in control of the reward pool ever since.

Forking @ned's stake away will only help the voting ring to continue to sell steem at higher price. If you really think steem is worth salvaging, then allow @ned to power down his stake and buy it, so, you can reward decent content.

Forking @ned's Steem would be stealing it from @ned.

Calling it stealing would imply he earned it in a legitimate way.

Posted using Partiko Android

Steemit.inc is a private company and Steem is a public Blockchain, so what should the relation between those two groups be?
Sure, we can wish that Steemit.inc stops the powerdown, but what comes after that?
We as a community want Steemit.inc to work as close as to the user base as possible.
When they sell off most part of there Steem, than it gets transfered to the public...isn't that our goal to reduce the stake of Steemit.inc and increase decentralization?
If they keep the Steempower we have the same problem as before! Like @fyrstikken said a couple of weeks ago, if they really want to get rid of their stake, than they should sell it in an OTC transaction.

Once it is off the chain we don't know if it will be re-introduced under a myriad of anon accounts with collective undue influence.


That's the reality, the "evil" part of running the business. In every corporation, someone or group control a majority of stake to keep the "power" of decision. The steem blockchain is no different, those whales get a large portion of stake (rewards) compare the rest of us.

I think the point for what it comes down to is. We need " smart money aka smart investors on Steem" who get control over the Steempower that Steemit.inc sits on.
If Steemit.inc can't run a good business than there stake needs to be sold and get into the hands of smarter investors.
The worst case for this situation would be if Steemit.inc sells its Steem to people who don't believe in the future of Steem, and who only come for a short term profit.
Either way Steemit.inc has to become successful or somebody else will in the future, if Steem has the potential and technology that we all believe in.
But don't get me wrong its good that we all express our opinion towards Steemit.inc and if the Powerdown call gets recognized by @ned that could help us to calm the situation and gain more time.

Posted using Partiko Android

Yeah that is another risk, imagine a competing project purchased that stake just to mess with us.


Nail in the head.

The powerdown will cause panic in the marketplace but in the long run it will be good to the steem blockchain.

But that doesn't stop other "investors" to buy bulk of steem and become the next "Steem Inc". And we go to the same issue over and over again.

Perhaps a more effective solution is a burn of some of their stake, which will have a positive effect on price and value of the remnant of their stake as well as the stake of all Steem users.

Why should we seek for short term profits over this situation? We need that Steem in the hands of great core developers who are pationed and excited to thrive this Blockchain.
If we burn the stake of Steemit.inc we miss the opportunity for smart investors to take offer the position of Steemit.inc
We all remember the news about the 70% lay off with Steemit.inc...and the Blockchain is still one of the most active and usable out there.
30Million Steem at 0.30cents are 10Mio USD that is joke in the Investment world.

Sure but we don't know the intention is to sell. Also currently the inflation of Steem is 8.5% so maybe at 800K pm the have only been selling the inflation, they can keep dumping forever. This does accelerate it more and if they sell could be a good thing, but again we don't know if they plan to hide it.

Exactly. OTC. This moving to the exchanges panics the market.

"This moving to the exchanges panics the market"
No thats a wrong assumption and actually Steem just jumped over 30% up the last two days.
Steemit.inc can't just dump over 2 Million of Steem into an almost no high volume order book. They have to adjust there sales to the market conditions.
And that attitude that we have to be aware of what the market thinks is totally wrong. We don't have to satisfy the "market" and if you wish to do so you make yourself a slave to the anonymous markets.

there sales

their sales

Da verbreitet wieder mal jemand Panik. Aber ich fürchte mich nicht.

Panik und Angst helfen hier nicht weiter alle Beteiligten sollten sich wieder auf die Sache besinnen und miteinander reden und Loesungen finden.

How do you know the jump isn't manipulated? The timing is quite interesting. It's also not just that they can dump but they can also produce a hidden influence over Steem using Steem Power as well.

And I do think we serve others via markets. What do you view as being the ultimate decider if not the market?

I'm not saying that this market jump is anyhow related to the current events here on Steem, and yes most crypto prices on exchanges are manipulated thru wash trading.
If they want to use there Steempower for any other accounts they are free to do so. They choose to be a company and if they think they better of this way, than they have to take the responsebility for this action.
Anyway @ned is at a point where he has to turn Steemit.inc around into a community serving development platform. Otherwise others will be happy to take the opportunity.

Posted using Partiko Android

Of course it's being manipulated. Crypto markets are constantly being manipulated. Just look at the extent of the jumps and the timings. Steem has such a small market cap, it wouldn't take much to bring it to $1+. Then again, it wouldn't take much to bring back to 7c.

I say enjoy the ride. Unless of course you actually need your crpto to pay bills and stuff. In that case, you might be buggered.

All I know is I'm powering down. I have no choice when I have to assume at any moment the price of Steem could go to 1 cent. It might not be logical to crash Steem but the more unlocked Steem there is the less secure we can be in price prediction.

Maybe people got wind of the fork talk and want to double their tokens :).

Very good point. The redistribution of the ninjamined stake is the best thing we could ask for. That would remove the "overlord" effect that Steemit Inc has over the environment that is Steem.

Steemit.inc is a private company and Steem is a public Blockchain, so what should the relation between those two groups be?

it seems it' not that obvious. Not only Steemit Inc do control large amount of steem and the top dapp (steemit) but also they own github repository. Thus steem blockchain is more owned by Steemit Inc than not.

I can see both sides of this situation. Even though a power down could be bad for price... The lack of concentrated steem funds after selling can actually be good for the ecosystem. At the end of the day, price will depend on people using Steemit and creating interesting content.

ummm I have been of the mind that a ST.INC Power-Down would lead to more steem in the hands of the many, it has been criticized by nearly all the new fish that it is too centralized, and therefore no different than any traditional system.

They have said they do not intend to sell it any more quickly. Therefore, either: a) there is no benefit to be gained in terms of distributing the stake, or b) they are lying and will sell more of it.

The costs of this action to the ecosystem in terms of lack of transparency and security and scrutiny of the dangerous block of concentrated stake will be incurred without any offsetting benefit in distributing it.

Thanks for the additional info, that helps. Do we know the rate of sale now??? They would need more Liquid steem to increase that rate of sales, which would not necessarily be a bad thing in a rising market. I have increased my relatively small stake +20% in Dec. due to the low prices :)

The stated rate of sale is 800K STEEM/month. There is no sort of audit or anything so we are mostly taking their word.

42.5 months to blow all that out...

As mentioned below in another reply: Once it is off the chain we don't know if it will be re-introduced under a myriad of anon accounts with collective undue influence, or just kept on the exchange to be powered up at a moment's notice. That is the transparent nature of the exchanges, is you don't know if the funds are going to be sold or kept for future power play on the community.

It is all pretty much trackable anyway, and even if it was not it's easy to see coordinated efforts by "anon accounts" doing things. That one chick who has dozens of flagging accounts with no real VP was figured out pretty quickly...

Petitions are silly things that silly people do when they want to differ action. I don't hoist another's flag.

But I will say something I've said before, I have no confidence in Ned's leadership and he has already sailed down the river.

It was very interesting to read about the back room dealings, but I do find it very sad they happen that way. The self important quasi-official sounding language of politics in the first sentences of your statement here are signals of the kind of politics that inspires you. The backroom dealings fit all the more.

If you truly think of yourself as a servant of the electorate, bring the discussions completely on chain and stop playing I'm A Politician on your private chats.

That was my agenda from the start, to open everything up to the public. But since negotiations happened with Ned got opened up pretty much on the same day we were cautious of how much to make public until we had tried to discuss with him in a calm manner without external politicking. The slack that was created was not closed, anyone there in could invite anyone. Only today did we inform Ned that we planned to make the recent events public and my first order of business was of my own accord to create a community Discord to facilitate open communication, as per the link in the post above.

Everyone start a power down!

You may all power down. I won't. I never have. and I probably never will, until the day comes that blockchain has reached mass adoption (everyone using it under the hood in their daily transacting, whilst unconcerned by security or code).

Steem is one of the very few actual great use cases of crypto-currencies / blockchain applications. The price per Steem token will decrease when everyone sells their stake, but eventually others will buy those tokens at a discount, hopefully decentralizing the distribution of Steem.

It's all good man.

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