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!