RE: Pros and cons of two versions of Steem Proposal System by valued-customer

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· @valued-customer · (edited)
$0.11
Thanks for the substantive reply.

>"Adjusting curation rewards up to somewhere closer to passive income will provide incentive for users to be active."

Mere profiteering isn't the goal of curation.  I see no effective difference between whale votes or bidbot votes if such votes are only the result of profit seeking.  It's rent seeking behaviour, and does not actually curate.  

However, one thing both do is to decrease incentive to create quality content.  In neither rent seeking model discussed is the quality of content even a factor.  Content quality is a huge issue for Steem and investors, however, and our trending page shows how poorly rent seeking performs as an incentive for curation.  

This is why changing the reward level for curation will not improve curation.

In fact, doing as you propose will degrade the quality of posts, and decrease retention even further, by reducing incentive to join and post good content.  

Lastly, none of this actually addresses the fact that funding SPS via donations, or donations and some portion of inflation, will actually create incentive for stake to neither create, curate, nor witness, as all those are incentivized via inflation, and funding via donations alone will not impact that (although stake reponsive only to financial inducements will be unlikely to contribute, thus relatively penalizing donators), while adding funding via inflation will create *negative* incentives for all three compared to accounts that do none of them.

This is why, after reading all comments on this post, I realized that the only reasonable way to fund SPS is via a direct tax on stake itself.  The benefits of SPS will apportion to stake, not rewards.  Taxing rewards decreases incentive to create, curate, and witness, while only indirectly benefiting those that do, and directly benefiting stake.

We should not decrease incentives to contribute positive benefits and attract investment to Steem.  

Further, apportioning funding for SPS on stake not only accurately reflects that the benefits of funding SPS are apportioned to stakeholders, but also gives those stakeholders incentive to closely attend to funding SPS, so that they attain to desired benefits.  It also reflects that VP is directly based on stake, and all polls on budgeting, funding mechanisms, and so forth will be based on stake as a result of VP being based on stake, so the responsibility for the funding, the benefits of the funding, and the authority to do the funding are all equally and perfectly attuned.

No other mechanism neither decreases incentives to effect positive benefits to the blockchain and community, nor increases incentives to do no good for either, and accurately reflects both qui buono and who has authority to decide how funding is effected, while granting investors certainty regarding SPS funding and benefits.

Unless SPS is funded directly based on stake, just as VP is, those that do not create content, curate, or witness will get a free ride on the coattails of those that benefit the community via those mechanisms.

As to curation rewards, profiteering has proven to be a poor selector of content quality, and it is other values, not emunerative potential alone, that should be determining curation incentives.

Thanks!
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vote details (9)
@spectrumecons ·
When I arrived I thought the larger stakeholders would be more focused on contributing to the growth of the platform rather accumulating more coins. It seems that I was partly wrong. Some of the largest stakeholders just want to take as much as possible without contributing anything. Bots have nicely facilitated this greed. This has made it harder for those actively contributing. Many have given up and have delegated to bots. There were problems before bots such as circle jerking, self-voting, voting trails, auto-voting etc. However the community had a way of fighting that through downvotes. Some of those delegating to bots don't post, comment, or vote. They just collect returns. These returns are untouchable. 

I believe SPS is a good idea, users can get paid to work on proposals that benefits everyone without needing to find a direct revenue stream. These payments need to come from somewhere. Donations are too unreliable. It should start off fine but people will eventually drop off. Taking from existing inflation seems like a logical step. Taking from author rewards appears the choice that will do the least damage. This could be supplemented by users using SPS as a beneficiary for posts instead of declining payout. 

I described at the beginning of the comment about stakeholders taking without giving through bots. That is only half the story. Authors choose to pay for votes using their post rewards. If they stopped buying, bots could not earn. Instead, they continue transferring author rewards to bots. Taking a cut from authors is also taking a cut from bots.
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vote details (1)
@valued-customer ·
$0.14
I don't disagree that there is a plethora of examples of blatant greed evident on Steem.  However, what we're discussing is how to fund basic and essential development of the blockchain, and that is likely going to be voted on, with stake weighted votes.  While individuals may prefer to avoid costs they can, there are ways to tap stake that aren't avoidable for folks with Steem.

Donations are voluntary contributions, and I reckon we agree that won't be sufficient to reliably fund development.  Non-voluntary contributions, whether from all rewards, only author rewards, or stake, are a tax, and the only realistic way to tax Steem users is code.

The only way to avoid such a tax is to not hold whatever is being taxed.

There's going to be voluminous debate and resistance no matter what form of tax ultimately is chosen, and for those that desire to remain invested in Steem, tax will be a facet of the token.

I have explained a couple times that taxing rewards decreases incentive to create good content, and we already have problems with content quality.  It will also decrease incentive to join Steem, and remain, and we have a dire problem with retention now.  Author rewards are the most problematic source of funds because creators are already the weakest link in the chain that creates value for Steem.  Taxing author rewards will close the spigot from which the value of Steem originates - content.

Witnesses are in some cases below break even already.  Taxing their rewards will definitely reduce their number, and that reduces the security of the blockchain, a terrible thing we do not want.

Curation is already horrible, since it is largely (at least by those greedy folks we discussed earlier) only being done to gain profits.  It's not really curation at all, but mining Steem, and that's why there even are bidbots.  Decreasing the incentive to seek rent via curation doesn't strike me as a particularly bad thing to do, TBQH.  Even so, basing tax on curation rewards lets folks that don't curate get a free ride.  

Folks that don't earn rewards won't pay tax that is based on rewards.  This is a huge incentive to not create, curate, or witness, and we already know that greedy profiteers will do whatever is most profitable.  That's why if we want to create an incentive by making it possible to avoid the SPS tax, we sure as hell don't want to incentivize them to avoid rewards - since rewards are doled out to encourage the things rewarded.

The only reasonable basis for an SPS tax is stake, and no stakeholder then gets a free ride and can avoid the tax by not doing the good things we want to encourage, the things rewards pay folks to do.  Stake will choose what is funded.  It's fair that stake then funds it.  Stake will benefit from the development effected through capital gains.  Stake should invest in the development equally to it's portion of benefit, and stake tax does that.

Taxing rewards will harm Steem.  Let's not do that.  Let's do what will produce the best result in terms of equity and gains, which is to fairly apportion the SPS funding to the stake that will benefit from it.  Some folks will squirm, and some might even leave.  Folks that leave because they don't want to fund development that will benefit them proportional to their contribution aren't folks we really want to do business with anyway.  They are only willing to be here if we pay the bills while they reap the profits.

We need development if we want our investments in Steem to produce gains, and not dwindle as the blockchain becomes irrelevant.  Reasonable investors and redfish alike will be willing to contribute their fair share to grow their stakes.  

Thanks!

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