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RE: Why I Advise Against Linear Reward
I can't figure out when it would ever apply, at first thought. In a 100% curation system, the author gets nothing. So you could vote on any content you wanted and you would get the same reward, completely independent of whether it was your content or someone else's.
In such a system, there wouldn't even be additional direct rewards to be gained by making people think your content was "good" by upvoting it yourself, since if they did then vote for it, you wouldn't get any reward from their vote.
About the only think I could come up with is some indirect benefit of increased fame, but it's questionable how much "positive fame" you would get unless your content was actually good.
You're right it wouldn't make any difference for who people vote so my statement was only partially correct. 100% to curation is an extreme that doesn't make any sense. It was part of what I was pointing at. Again, I appreciate your opinion and I wish more top witnesses would have joined.
It's definitely an extreme case, and not one to explore right now, IMO, but it has been proposed before as an alternative to the current system and it "could" make sense.
In such a system, the blockchain pays rewards to good curators (i.e. investors) and authors only benefit indirectly (via recognition, advertising, etc).
It's not as crazy as it might sound at first: plenty of people write all the time now without expecting direct monetary rewards from what they write.
All that aside, I'm definitely not in favor of trying something like that on Steem.
I'm failing to see how the system can work without some sort of superlinear. (in reward to post reward as opposed to curation reward). Now, Steem is far from simple system and it's hard to foresee all possibilities.
Also, I didn't realize 100% curation shouldn't be ruled out outright so thanks for enlarging my horizons in that regard.
There is superlinearity in curation rewards now, it's just not based on stake. Essentially, the superlinearity is based off being the first to spot good content before others find it and vote on it. The early voters get more than the later voters. The idea is that this will encourage a curator to find the content that other people will vote on.
But this is often misunderstood right now: many voters think they get more for voting for a post that already has a lot of votes on it, when such votes actually get much less of the overall curation reward.
Most importantly, under 25% rewards split among all curators versus 75% going to the one author, this superlinearity is pretty much moot because the rewards are just so small relative to author rewards that the economics are totally skewed to self-voting.
The most important thing to do now is to change this percentage to allow for meaningful curation rewards. Then we can consider tinkering without how those curation rewards are apportioned after they become numbers that matter.
But even under 50% curation or even 75% curation wouldn't the big whale simply look to vote for themselves? Wouldn't exclusive self upvote be the surest strategy for best ROI for most of the large whales?
Under 50% (and especially under 75%) curation, it's definitely not the biggest incentive, even for a large whale, as long as other large whales also exist (or just a lot of other voters whose combined stake exceeds that of the whale). In such cases, the whale can make more by voting early on a popular post, versus voting for his own post.
Here's a simple hypothetical example at 50%, assuming the whale owns a whopping 1/10 of total voting stake (no current whales have this much stake, so it's an extreme case, but I wanted to demonstrate this holds true even for very large whales, it's even more true for those with less stake):
OR ALTERNATIVELY
Under the current curator distribution system, this is how your example plays out @blocktrades
Chart #1 shows under the current 25/75 distribution and chart #2 displays what it would be if it was 50/50 distribution.
Highlighted in light blue is the curation reward payout of the first voter (a.k.a. The Whale with a $100 vote value).
As you can see from chart #1 (the current system) the whale makes a curation reward of ~79 STEEM. Thus, it’s about 29% less than a 100% self-vote.
In chart #2 you can see that the whale would make ~158 STEEM in curation rewards - 2x as much as the 25/75 split.. makes sense, right?
In this theoretical example (under a 50/50 split) the whale would make 58% more by curating content that will later be upvoted by a significant amount of vests (a.k.a. a large collective or even a single whale with a significant amount of STEEM POWER) than through 100% self-votes.
Now, you’ve given us an example of 1 large whale, which does make the calculations simpler and I think helps to give everyone some perspective on how significant a change like this would be.
What most people don’t understand however, is that if this high level of incentivization was in place, then it is far more likely that people will continually be “on the hunt” for the best content that will rise to the top after they vote on it - which was the original intention of the system that we have now. I especially consider this to be a positive direction if real manual curation teams (like Acidyo’s initiatives) start popping up. But that’s all just my own speculation. I can envision a scenario where whales decide that they are better off delegating to effective curation teams rather than self-voting or even delegating to bid bots.
Thus under a 50/50 split, everyone would have a higher incentive to vote on an unknown post before it becomes known - whether your vote was $0.10 or $100...
This makes the whole debate over curation rewards very valid in my mind, and I’m leaning towards a 50/50 split although I think extensive testing and thought experiments ought to be done before we uppend the current system.
From what i looked at its pretty clear imo that vote selling for your hypothetical whale is still a more lucrative deal then curation after vote selling markets adjust to increase in curation. And they will.
After the passive investors move away from bots and into vote selling you will have a huge supply of votes on MB and SS.
Once the balance is struck, you just made it much cheaper in liquid STEEM/SBD for the vote buyers to get on top of trending. The vote value you had to pay 400 SBD to get on top of trending, now you will be paying around 250SBD for.
50/50 changes absolutely nothing and potentially makes it even worse. These calculations you made seem to be right, but they are just one side of the coin. No one seems to even want to look what side effects this change will have.
If vote selling is still the profit maximizing option then there is absolutely no way that passive bot investors or semi active whales, after they realize it, wont move to vote selling...
If they are doing "nothing" now and this change happens, they will continue to look to do nothing and earn as much as they can.
Vote selling and getting "smaller amounts of liquid assets and more curation" is still superior to "just curation".
This proposal slightly cuts the passive income of bot delegators (now vote sellers) since more liquid gains is better then more SP gains, but remaining passive is still the most lucrative deal.
Also, now you did a great service to current vote buyers.
Im going to ping @blocktrades since he upvoted me a few times to see if any of what i wrote makes sense to him.
Thanks for filling in the details with hard data!
When you are speaking about "the curators" remember that they currently are just a mega small group. And if you would make it 50/50 you would punish the growing amount of true content creators. The main source of curation at the moment is coming from private high Stake people or misterdelegation. That will say 50/50 would not change a single thing to make content creators getting more leverage. It would just increase the gap between the rich and poor. Ned has even talked about this.
This utopian idea that we will 1 day have a bunch of happy curators in mass amounts is a bit funny to hear XD It will never happen. So 50/50 is only something that would benefit 20-30 early high stake accounts. It would leech off true content creators.
People automate the curation process more and more. There is no middle class of curators and never will be. At least not the next couple of years. 5 years then yes. Since stake share out was not done in a good way. "The curators" = Speaking about 10 early high Stake accounts. The content creators are plentiful! And they are growing for every day that goes!
I'm not sure why it's "funny to hear" that we could have a bunch of happy curators: it was one of the key goals of the original design of Steem. And it's certainly a viable premise: people like to vote for things they like, even without an economic incentive.
However, I get the strong feeling that you think this is just a move by whales to get rich off curation rewards. To me, that's mostly a laughable notion as well.
I actually think "good" content creators will get rewarded more under 50/50 rewards, for reasons I've expressed throughout comments here and elsewhere.