STEEM PROPOSAL: Offsetting Steem Power Debasement Through Unobtrusive Advertisements
The Problems:
- Steem allocates 9 STEEM to Steem Power (SP) stakeholders for every 1 STEEM it creates to fund growth through contribution incentives. [1] Assuming over 90% of STEEM has been converted to SP, and SP stakeholders don’t participate and try to earn a portion of those contribution incentives themselves, then this results in Steem Power stakeholders being debased by approximately 11.11% for all STEEM printed for contribution incentives.
- According to the most recent Steemit Google Analytics information that has been posted, as of July 8th Steemit users visited Steemit.com somewhere in between 9,000 to 10,000 times a day for an average of 4 minutes and 19 seconds and 2.01 page views. [2] You might think that this represents exponential growth and a high amount of web traffic, so what could possibly be the problem? The problem is that the Steem ecosystem is not fully leveraging the value of the web traffic it is receiving. Legacy social networks bank on this web traffic in the form paid advertising. There is no reason why the Steem ecosystem could not capitalize on this untapped revenue stream itself.
The Solution:
Leverage Steem’s web traffic by offering unobtrusive paid advertisements to third parties to reduce the SP debasement that comes from the printing STEEM for contribution incentives (when over 90% of STEEM has been converted to SP.) It is the intent of this proposal to distribute this added revenue stream to long term investors of the Steem network (SP stakeholders).
Temporary Steem Power Boost Auctions:
Temporary week-long SP boosts will be auctioned off to the highest bidder each week. The SP boost would only be usable on one post, and would disappear after the week it was paid for has ended. The winner of each week’s auction will be granted with an arbitrary number of SP for the next week that will allow them to boost their post to the first slot.
Unobtrusive Advertisements:
There would only be one boost active at any certain time, thus only one advertisement per page. Visit Reddit.com to get an idea of how unobtrusive the advertisement at the top of each page or sub-reddit is (I am referring to the advertisement at the top of the page that looks just like any other Reddit post.)
Avoiding Economic Consequences:
To avoid any economic consequences that may arise because of the SP boost, contribution rewards for the post that the temporary SP boost is used on would be negated, and the temporary SP boost can only be used on the post that was submitted with the winning bid (see the Curating Advertisements section for more details).
Free Market Price Discovery:
The temporary SP boosts last one week, and there would be an auction each week for the next week’s boost. The free market of auction bidders will determine the value of a week’s worth of advertising.
Auction Denomination and Payment:
Auctions for the SP boost would be denominated and paid for in Steem Dollars, with the winner burning an amount of SBD equal to the winning bid of the auction. The Steem Dollar is the obvious choice to denominate auction bids in due to its relatively stable value and it existing on the Steem chain.
Thwarting Auction Manipulation:
In order to bid X amount of SBD in the auctions, a user would need to have that same amount in their wallet. Otherwise, someone could run up the price of the auction with no skin in the game.
Ensuring Payment:
If a user’s bid is the current winning bid, then the amount of SBD they have bid should be frozen (or in other words un-spendable and untradeable.) This way we can be sure that the winner of the auction will be able to pay whatever amount they are bidding.
Curating Advertisements:
In order to submit a bid in the auctions, each bidder must also include an example of the ad they would like to use the SP boost on. If they win the auction, then the boost can be used on that post only. This is so that SP tokenholders can curate the advertisements by down voting them during the auctions. It provides a way for SP holders to reject an advertiser that they deem is inappropriate (a porn site for example.)
References:
- 4th Paragraph on Page 9 of the Steem Whitepaper: https://steem.io/SteemWhitePaper.pdf
- https://steemit.com/steemit/@gavvet/where-steemit-adoption-is-going-to-the-mooooon
Good ideas. I've upvoted you because I think this is a good discussion to have. I'm not quite sure how I feel about ads yet, but I might be persuaded if they were very unobtrusive.
Thanks. I agree with you... the more unobtrusive the better. Reddit has 15m to 20m unique visits a month, and they not only have a Reddit post ad at the top of their pages like I am proposing, but they also have two ads on the sidebar. Yet still, I have never used Reddit and felt overwhelmed with the ads.
The main type of advertising I hate are pop up ads (like optin monster ads). Also, I hate it when there are too many ads, more ads than content, or slideshows with one picture and 100 ads. I think one advertisement in the same format of a Steemit post would be acceptable to most users.
Adding in the community curation of ads is a game changer as well. I don't think I've seen that anywhere else. Certainly haven't seen advertisers bidding to the community for space either.
We hold the keys to the kingdom and businesses will come to us asking what we'll allow. No longer beholden to advertisers changes the face of the market.
Hell, could even add a feature where users could pay a fee in STEEM to block the ads if they wanted to. More market choice!
"Hell, could even add a feature where users could pay a fee in STEEM to block the ads if they wanted to. More market choice!"
I like your idea. I have to think it over a bit, but I think I may add that into the proposal.
if i remember correctly, @ned said in an interview that a paid featured section is planned
Yes that's what I heard too
That is cool. I came up with idea independently of them... I had not heard of any such plans. I wish they would give me some feedback on this so I can make some improvements on it! I think it is a much needed/wanted feature. I assume they are busy men.
Nice- hopefully there is still some value in the ideas contained in the post.
Very well thought out. I'm stoked that I had the idea of the curated advertising bids after reading your first paragraph before getting to the bottom :D
Checked that one off my list of 'to-do' posts !
Super Upvoted!
Thanks. I spent the better part of a day (minus 2 hours at the dentist... lol) thinking this through and writing it up. I am glad you came to the same conclusion that ad curation is necessary! :)
Im all for ads if the revenue is reinvested into purchasing steem and distributing it out as increased steem power. Provides benefits only to those vested in the site.
Are you arguing that burning SBD may benefit people not vested in the site (SP stakeholders)? I may agree with you there. I think that it may reward liquidity providers more so than anyone else. I have brought it up in Slack to be discussed further, and the way people pay for the advertisements may be edited in the original proposal. Please join in on the discussion on Slack in #proposals
I also added the intent of the solution to point out that the proposal is intended to benefit only those vested in the long term success of Steem:
"It is the intent of this proposal to distribute this added revenue stream to long term investors of the Steem network (SP stakeholders)."
I voted this up because I support the discussion, even though I'm not sure about the specific proposal.
I'm a huge fan of the incentive structure as currently conceived. I think it's cleverly designed. If you sit back and do nothing, your SP balance will grow substantially. Contribution bonuses are generous without hurting less active users in any way.
EDIT: The debasement that occurs is the debasement of liquid Steem. There is no debasement of Steem Power. Steem Power is already growing at a blistering rate. What you have identified as Problem #1 in this post is inaccurate. You are somehow confused about how money is created here.
" ... I'm not sure about the specific proposal. I'm a huge fan of the incentive structure as currently conceived. ..."
If you are a fan of the current incentive structure, and are mainly interested in long term investment of Steem through buying SP, then you should like this proposal. This proposal is intended to convert Steem's web traffic into money, then distribute that money proportionately among SP stakeholders. If you are a SP stakehoder and like free money, then you should like this proposal. I think they key is making the advertisements unobtrusive while still making it a lucrative endeavor for SP stakeholders.
"The debasement that occurs is the debasement of liquid Steem. There is no debasement of Steem Power. Steem Power is already growing at a blistering rate. What you have identified as Problem #1 in this post is inaccurate. You are somehow confused about how money is created here."
I suggest re-reading pages 35 through 38 of the Whitepaper. Some applicable quotes from the Whitepaper:
"Because 90% of all STEEM created is distributed back to holders of SP, the result is similar to having a 2:1 “split” every year rather true inflation. The total rate of expenditures used to reward contributors is about 10% of the market capitalization per year, a rate well below what Bitcoin sustained for the first 7 years after it launched."
"As of May 1, 2016, over 98.49% of all STEEM has been converted to SP. This demonstrates that demand to hold long term dominates. In this environment both liquid STEEM and SP are diluted to fund rewards.
For the first 2 years of Bitcoin’s life the network sustained an annual inflation rate of over 100%. For the first 5 years it was over 30%, and for the first 8 years it was over 10%. According to the tool for estimating future inflation included with the Steem source code, Steem by contrast will achieve an instantaneous annual rate of approximately 12% after just 1 year (not including the effects of SMD operations)."
I think this is where most people get confused (I have bolded the confusing part):
"Creating new STEEM to pay an incentive to a particular user or group has a negative effect on every other user’s balance in terms of their percentage of the STEEM supply. If exactly 90% of the STEEM supply is held in SP, then the negative effect of Contribution Incentives on SP holders’ balances is exactly balanced by the positive effect of Power Incentives."
I made some slight edits to the proposal to point this out:
"Assuming over 90% of STEEM has been converted to SP, and SP stakeholders don’t participate and try to earn a portion of those contribution incentives themselves, then this results in Steem Power stakeholders being debased by approximately 11.11% for all STEEM printed for contribution incentives."
and
"Leverage Steem’s web traffic by offering unobtrusive paid advertisements to third parties to reduce the SP debasement that comes from the printing STEEM for contribution incentives (when over 90% of STEEM has been converted to SP.) It is the intent of this proposal to distribute this added revenue stream to long term investors of the Steem network (SP stakeholders)."