Understanding Steem's Economic Flaw, Its Effects on the Network, and How to Fix It.
I'm sure most users on this network have seen the same "vote-farming" and flagging dramas on Steem over and over again for the past year. It's not hard to see that a lot of users are doing this "vote-farming" thing, including the largest stakeholders on this platform. It just means the following under Steem's current economic model:-
- Self-voting
- Vote-selling
- Vote-exchanging
Please keep in mind that all of these are economically equivalent. For example, I can sell my votes by delegating to a bidbot, or I can also achieve the same effect by using all my votes on my posts only, or give someone $X amount of votes to receive the same amount back. All of these actions are the same: vote-farming. Vote-farming at 100% just means using 100% of our votes only on ourselves. This is indeed the best move under the current economic model, which is fundamentally flawed, and a lot of users including whales are actually participating in it.
Anyone not participating in this activity will just be losing out BIG TIME over the months and years. Like I've said in my previous post, someone with the same amount of Steem Power (SP) as me in the beginning of this year is now already ahead by 50,000 SP just selling their votes, while my votes mainly went to curation while taking my time to post. So I'm not holding back as much anymore, and I'm playing the vote-farming game on my alt-account @etherpunk to keep up until Steemit Inc and the top witnesses decide that some of us are right about our diagnosis and proposal to fix the misaligned economy. An economic system is flawed when it relies on the altruism and sacrifice of some users.
The path of profit maximization is again, vote-farming at 100%. This means maximum profit with the least effort. If you think there's a risk of people flagging, sure it may happen. But over time, you'll come to understand that Steem's current economic incentives just makes flagging arbitrary, futile, and ultimately meaningless. Nobody will even bother flagging anything else other than outright fraud, theft, or just plain retaliation. You can put up 10 random one-sentence original posts a day and just vote yourself up all the time while even buying some extra votes for the ROI too. It's very likely that nobody will stop you these days. Even if someone does, they'd most likely be unable to sustain their flagging on your account over a long period of time, unless you're just pure evil. Bidbots also generally do not have high standards. How else are they going to remain competitive?
It's now a move that I actually encourage everybody to do. Vote-farming at 100%. Instead of selling votes, you can also avoid the middleman and just vote on your post all the time for the same effect with more profits. Now you might think: alright, so everybody just minds their business and do their vote-farming at 100%. Under this scenario, what's the actual point of the ~8% annual inflation on Steem which just goes back to the pockets of the voters? This is why I'm saying that anti-abuse initiatives are contradictory under the current economic model. We're fighting against the tide of incentivized spam and abuse. My as well just set Steem at 1% annual inflation without reward pool just to keep the network running, all while people post whatever they want as usual without voting.
The point is: Steem's economic incentives should be aligned to encourage allocation of inflation to contributions that benefit the platform. While it's impossible to design anything that encourages all SP holders to allocate 100% of the inflation to other contributors other than themselves, we can go for about 50%.
This is the proposal. The best way out of this situation is likely to:-
- Increase curation rewards (50% is a good start)
- Move away from pure linear and into something like n^1.3
- Subsidize downvotes (cheaper downvotes, separated pool)
Doing so will make curation more likely as the economic incentives from doing so will have a better chance to outperform "vote-farming". This "hack" is really about giving people half of every votes given out under a curation game. Some of us have been saying this and repeating the same arguments for well over half a year, but not many seemed convinced at all. I hardly expect anyone who have only put in less than 20 minutes of thought is seeing the problem and solution clearly. But that's generally all the time most people have these days. Some of us have put in dozens if not hundreds of hours just refining our thoughts about this one single problem.
Some words about bidbots: the proposal above will simultaneously make the pricing for votes much less predictable than in a linear economy. It won’t kill the vote bidding business but just introduce some extra risk (which there’s essentially zero at the moment) which would end up being more like promotion with less ROI, so it wouldn’t serve as a bypass to the act of holding SP for more earning power. Yes, there's a leak here that needs to be patched up. More profitable curation services should also emerge after the proposed changes.
The proposal has non-trivial costs, but as @trafalgar says it, nothing is as costly as a completely broken content quality indifferent economic system for social media outlets. Remember there's nothing wrong with profit maximizing behavior, one should expect it. The problem is when we don't align it with the behavior we want that's best for the entire system. To further repeat the point, I'll copy and paste @trafalgar's words here as I think he generally explains the situation much better than I do:-
We currently have a system where stakeholders are incentivized to engage in content indifferent voting behavior (vote selling/self voting) to maximize returns. This completely defeats the protocol’s ability to foster engaging platforms that revolve around content discovery.
We need to move away from an economic system that makes it too costly to vote on work that stakeholders actually deem valuable if we want this place to survive.
Upping curation rewards is an obvious answer, but by itself, it is easily circumvented. Bid bots can just offer to share most of the curation rewards. Self voters can spam hundreds of posts and just upvote the ones that were least voted on by others after 15 minutes to avoid others 'stealing' their rewards.
Non linear should be seriously considered. Having reward amounts/SP that differ per post depending on its popularity is the core component of moving away from content indifferent voting behavior. Yes it has a cost, but the n^2 we were use to was far too steep. At n^1.3 (or any crude approximation of this), we should get most of the benefits at the lowest cost.
Downvotes incentives should also be encouraged. Of course greater downvote incentives has downsides, but in combination with 1 and 2 above it should allow for curation rewards to out compete mindless vote selling/self voting.
Content indifferent behavior is the bane of this system. No social media platform can survive if it's unable to at least sort exposure and rewards by some subjective standard of quality.
Note that the 3 items in our proposal have been considered very carefully to cover all the angles so we can get out of the situation posed by Steem's current pure linear economy with low curation rewards and costly downvotes. Just implementing one item is likely not enough. We need 3 of them. But of course, we only want to achieve an intended effect, so any better implementation suggestions are welcome.
Also, suggestions like passive staking for investor-types so they don't influence the content voting and ranking, etc are flawed. The same problems will still happen since we'd still be under a pure linear economy with low curation rewards and costly downvotes. We'd just be reducing the reward pool here to be reserved for passive staking. The shrunken reward pool will then remain the be used in the same way, which is vote-farming, instead of content and curation.
It's my wish that more community members around here take notice about this problem and solution. If you're convinced, please make some noise about it. I've also written this about this a few times earlier this year. Some of us even wrote about it more than a year ago. The arguments and proposal remain to be in the same vein.
Please save Steem from all the unnecessary suffering and restore our sanity. We just need more users to stop running around headless, stop getting involved in senseless witchhunts under a flawed economic system, and instead seriously consider our specific problem statement and solution here. Some of us are really surprised that nobody at the top is onto this matter like an eagle over the past year.
It's a mistake to pin Steem's problems on culture and greed. Altruism and selfishness should be one and the same, which is what our proposal seeks to achieve in providing voters ample returns if they play the curation game instead of mindless vote-farming. The correct move then is in designing economic incentives to align profit maximization with activities that are good for the platform instead. It's as simple as that!
As always, thanks for reading.
Note: I want to make it clear there's nothing wrong with self-voting or selling your votes. It just has the potential to hurt the platform when there are no checks and balances in a flawed economy.
You can vote on your favorite witnesses here: https://steemit.com/~witnesses. I'm also running as one. If you trust in my choices for other witnesses, you can also set me as your voting proxy on that page.
When curation (which should be a natural thing to do) becomes a sacrifice for bigger stakeholders, it’s about time to change the current economics.
Otherwise Steem will look more and more scammy, by making whatever shitpost and using bidbots to decide the payout. It already failed as a content discovery website at the moment.
Like you mentioned, linear algorithm made bidbots business much easier for prizing and more profitable for bidbots owners. Indeed, everyone can “promo”, this bidbot business model doesn’t make much sense to me.
I can’t understand why SteemInc supports bidbots so much, even deletaing to the bidbots.
They don’t see the problem or they just don’t care?
I agree with your points, aside from Steemit delegating to bots, I don't think they do
Unfortunately there are relatively few of us who see the problem this way. Any solution will have its trade offs, the idea is to minimize the costs while having an economic system that's sufficient to topple the current content indifferent form of profit maximization. That is to say, we need a new system that rewards good curation better than vote selling/self voting while still leaving enough for content creators and not shafting minnows too hard.
I truly believe a combination of slight superlinear, added downvote incentives and higher curation will do just that. No more than necessary in terms of extent.
Delegation was my misunderstanding.
One thing I don’t get is, since linear doesn’t work (everyone agrees right? Or not?), how difficult it is to give another option a try.
It really should be trivially easy
It's a very urgent problem that is fairly easy to identify and fix by competent people if indeed we are correct
So either we're wrong or, well, the people are all over the place, as we've been here for over a year with no agreement on a solution or even what the problem is
No. Many say linear is fine. I say make it 0
Why though? How would that even remotely motivate to curate. People would have literally no reason to not vote only themselves.
You are not given a curation reward for voting yourself, unless your work becomes popular. It would make things a game of voting what will get popular. Copy and pasting my articles gives them nothing, when they can just upvote the original. There would be no need to penalize link sharing because they wouldnt be getting author rewards for creation but the reward is for finding it. So if something really useful shows up in an obscure place on the Internet, it is a service to users of Steem the blockchain and would help user adoption. It could help counteract the extreme sell pressure on Steem.
I don't quite get what's wrong with linear. Wouldn't over-linear rewards be a great subsidy of the greatest whales and the biggest bid-bots?
Non-linear makes it more difficult to calculate bidding price and voting amount for bidbots. Say, if a bot has 100sp, under linear, if 10 ppl bid the same amount, they all get the 10sp equality of voting amount from that bot, whigh is 1/10 of its full voting amount. Win-win for all.
But under n^2 for example, the voting amount 10sp generates only equals to 1/100 of that from 100sp, which makes bidbots less attractive to use. I mean you can still use it for promo but looks far less attractive as Some bidders are gonna lose money by bidding.
With non-linear voting, we could actually see some bidding for the bidbot votes, as the bidbot would only be giving one 100%-vote every second hour :-)
Agreed, but I'm not sure if Steemit Inc is delegating to bidbots. I don't think so. But again it's the smartest move so they'll eventually do it as well even if the situation is created by their change in Steem's econs in the first place.
It's not the smartest move when you're the largest stakeholder. You or I as smaller stakeholders can grow our holdings by undermining the network at the expense of the larger stakeholders, and get a higher dollar value. The only way for the largest stakeholders to gain is to increase the value of the network. There's no getting around that, there's no way self voting becomes rational when you've got a major fraction of the total stake.
Although, in practice, even the smaller stakeholders have virtually all lost $ value in recent months, even with 100% self voting.
Hmm under linear, it's hard to trust other stakeholders not to vote-farm to outgrow their stakes disproportionately, so in the end, everyone does it taking the bet that the econs will be fixed at some point.
This is assuming that vote farming has 0 impact on the market value of the network. Which can be true temporarily, but is unlikely to be true for long. The market value of the network has far more impact on your net value as a large stakeholder than attempts to increase or maintain a % share.
The largest stakeholders don't actually have to trust that smaller stakeholders will not vote farm. They have the power to enforce it now, although I do agree that power could and should be made less costly (IMO the major costs are either human time or network resources, however Steemit Inc has not even really tried. @dan did in the past, and he tried to make it easier to enforce)
The point made by @smooth is not factored in to your analysis: concentrating SP rewards large accounts more than network effects diminish them presently.
An essential - and existential - problem is that stake-weighting forces all value other than financial to zero, both on Steemit and in the real world. It is necessary to measure and weight other values to effect rational society. Simply attending to finance alone creates a society of bots that have no other purpose.
People have other values, and many of those values are far more important than money.
My apologies to SteemInc if they didn’t lol. At least they somewhat support the business already.
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Who owns the 'alpha' account?
The alpha account is receiving (daily) funds from two of the largest bidbots on our blockchain. Very large sums (300k+ Steem per transaction) are received regularly from 'steemit2' account totalling more than 2M Steem. The 'steemit2' account in its turn gets really large sums from 'steemit' account. Just check their wallets.
Unless I’m mistaken, I believe alpha is owned by Blocktrades.
Ok, that is a better use for that account
Yes, it is one of our accounts. I use it for manual trades and other purchase arrangements to simplify accounting versus the automated trades done on our "blocktrades" account.
May I ask why steemit sent you that much steem over the course of alpha's existence? Is it something like an incentive for you being one of the few exchanges trading steem?
No, currently our listing process doesn't include any form of incentives from listed coins.
This is probably steemit and the bid bots selling steem.
Thanks for the clarification
It has gone to a point where people actually have the galls to complain about "not getting good ROI on bidbots". What a travesty.
This needs to change and soon. Otherwise, user attrition will leave Steem only with the ones who already had stake.
Pretty much every top post seems to be using voting bots at the moment. If you don't use them then you don't stand a chance - especially as a new user on the network. This is a broken system
Yea, vote buying/exchange and promo is normal on traditional social media but Steem is not there yet. Right now if encouraging pure bidbot promo, it will only cause more spams.
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First of all I want to say that I am very glad for the work being done by @kevinwong and @trafalgar to enable participation on the current Steem economics, while also pushing solutions forward. I very well agree with most of the points brought up here. The increase in curation rewards and downvotes incentives are particularly significant, as we tried several attempts to overcome those in our product development. The lack of proper curation incentives drove us to tricky implementations which we had to tweak continuously in the way we reward our curators/moderators. The lack of downvotes incentives made us think of complete different ways to sort our contents, compared to what the blockchain can offer. Built-in solutions, like the ones aligned here, are ideal and could lower the hassle significantly.
I am collecting inputs, like this one, trying to have an overview of the hottest community requirements. Utopian supports the maintenance of Steem forks (see @reggaemuffin ' s one) which enable proposals and testing of disruptive changes. It makes sense to bring such inputs in the right places (github issues) and incentivise the development, via community participation.
Thanks a lot for taking this up @elear. Much appreciated. It would seem like a great time to be setting up extraneous protocols to get important discussions going on with good info, and tying it along with development / testnet
Can you elaborate on this? Do you mean to say that if curation rewards were higher, you would spent less on incentives for your curators?
As you clearly agree with the points in the post, could you give more details on your comment? I feel that your words are too broad and don't know what to take from them.
There is an entirely different way to supplement the voting pool while implementing restrictions for self voting and vote selling. If the voting pool is reduced, there would little to no incentive to use the platform. After all it is slow, clunky and has a very small population with respect to other social platforms. Better rewards with incentives to do good or restrictions for bad actors could be implemented. But where would we get the extra revenue to do this?
Here is the idea:
Start a centralized exchange to complete with the likes of Binance, UpBit, Coinbase, Poloniex etc. yet have STEEM and SBD as the common trading pairs. If Steemit Inc were to create and run it, they can generate massive revenue to supplement their Software Engineers. Excess revenue can go toward supplementing the voting pool or towards rewarding good actors and good witnesses. There is no problem getting support and usership as All major exchanges can’t resync their nodes in a timely manor. People would use the new centralized exchange as they can’t use Binance or Poloniex. By the way both Binance and Poloniex STEEM wallets have down for a month. This isn’t the first time for Binance either. Their Steem wallets have been down for a full month before. Poloniex Steem wallets have been down for 6 months in recent past.
But get this, an exchange with all the major cryptocurrencies traded with STEEM and SBD can be created by anyone with the right technical knowledge. It doesn’t require Steemit Inc to do it. Whales could even pool their resources to fund startup costs They won’t need to self vote as the exchange will be so much more profitable.
I don't disagree with any points made here, I think its been obvious to anyone paying attention for way over a year.
Though I would have one major statement to make and one question.
There is no way you will keep profit seeking gamers away from working the system. It takes to long to implement hard forks and is to easy for a gamer to come up with work arounds. The problem is now how Steem works but how PEOPLE work.
This is never going to be fixed by trying to create rules that MAKE people do what we want... If anything it will only make them leave. Then the price of steem will crash and everyone will still be complaining as the rewards will be even worse than they were with people uprooting them selfs.
So the REAL question here is of which everyone actually needs to be asking. How do we provide a quality return (which means, reliable, easy and high enough %) on the investment whales make?
This is the answer. If we can find a way that is better for the over all eco system yet still provides a reliable, consistent and profitable return then its all taken care of.
Almost no investor is going to invest in a platform not to make money. Also most whales do NOT have the time nor desire to curate. Plus higher curation rewards wouldn't change anything anyways. Just use curation bots. Easy peasy.
Glad everyone is thinking about this, but simple economics shows that its the ones with money who hold the influence. So have to find a way to GIVE them INCENTIVE to move in the direction the community wants.
SteemOn!
Hey thanks for dropping by @quinneaker, I think it just takes a lot of repetition and refinement in arguments to get the points through. There's a bit of momentum this time around as ned has considered it in the comment section of his recent post.
Check out @trafalgar's response above. He's answered your concerns very well!
Yes, all progress takes vast amounts of collective discussion, meditation, pondering and even arguing. Thats why this is great. Though with that being said my statements/questions still seem to be the key in that process. I read a LOT of comments including many from @trafalgar but did not see one that answered clearly and specifically my questions/statements. I can look again as its a critical issue.
Best regards and SteemOn!
indeed,most of big stakeholder of sp are self voting on their own post,but we can't blame them if they run and act like that on the steem blockchain.
Because they are investing and spend their own money to raise their SP to do some propits of it's own post.
But still we are glad that some community giving a free curations specially to minnows and new comers with good article and writing.
like @curie , @acidyo specially you and to other steemians who support those good author..
Happy to know it also that you finally run your own thread and being one of my new witnesses @kevinwong
If you don't mind can i know you witnesses too! because i have special witness that i supported if you my 2 witness count's on you i'll take your proxy if not i give you a vote alone.. :))
The past 2 weeks have been brutal for minnows. Our post payout are decreasing by the hour and by the end of 7 days it's probably gone down at least 15%.
Due to this factor, many have chosen to leave and not waste anymore time on STEEM. Out of 15 friends I've gotten on to STEEM, only 4 remain and only 2 of the 4 are active everyday posting contents and engaging with other people.
So I think it is a huge problem from the way the way things are now and I don't think STEEM will achieve it's potential we all hope for. Even when SMT starts, I don't think it'll make much of a difference. More stuff on a broken system doesn't fix anything.
Flagging content is all we can do and as minnows, nobody actually wants to flag because of the fear that we'll get flag too. And whale flags are obviously way more powerful than minnows. I personally think flagging can solve this problem as only "content with effort" (like this post) will be valued. However seems like minnows doesn't see this as their problem. They see it as "the whales will sort it out" problem. I think everyone has to take ownership of this and be more responsible on this whole issue or else we're doomed.
From since I've known you which is January, you have not done what most have done which is self-voting and that's like 10 months. You've waited long enough for something to happen and have been vocal about this issue. I'm with you in this even though I'm directly affected by vote farming.
I'm just praying this changes happens sooner rather than later. Bless ya man!
Yes, the flagging is not effective over the long-term mostly because of linear. When everyone can reach for the nearest switch for max profit on nothing to do with content, there'll be too many people doing it. If you're not joining, you're losing out over time. If you're flagging, you're losing out over time too.
Edit: Flagging should be contingent though. It has some social cost attached to it. That's why it's better to have an aligned economy and just a small amount of free downvotes.
Yeah that way of flagging would make much more sense. If flagging is costing me my upvotes, why not just upvote someone else or myself? If this method of flagging was implemented, I think it would solve a lot of problems with this issue of rewards and upvotes.
You summed it up perfectly Kevin. It's why I have delegated a lot of my SP to a bidbot. I regret not doing it a long time ago, as I was just wasting the earnings potential of my SP. You're also right that this is a big issue and generally symptomatic of the broken economics that have plagued steem, for a long time. I am not certain what the correct equation is for effect of stake on the reward pool, but it's very clear it's not linear. (Though this was clear when linear was implemented from the original mechanism).
Hopefully you can use your influence to get more people onboard with creating a fix. It doesn't even need to be the optimal fix (as we may not know what that is until further experimentation), but at least some iterative progression would be nice.
@elear of Utopian is helping coordinate this matter, hopefully getting the ball rolling etc. The other side effect of the current economy is that nobody cares. Every second you care, the more you lose out lol. I hope the top witnesses are compensated well enough to do so. I wonder if I should make another move to only support witnesses that prioritise what some of us think is the most urgent matter that doesn’t require immense R&D to fix.
Sums up my entire experience with this platform.
Good to hear that Elear is also on board.
Only you can tell you what to do with your stake. :)
From a human standpoint, it's always worth caring. Whether this results in money or recognition, however, is another matter. In it, everyone is himself the best psychoanalyst, how he deals with a situation that depresses him or does not bring him enough profit. The question was always "How much is good enough?" and will always be the same. But one has to face it and not on the surface. To do this, one has to go deep and deeper into what is called self-knowledge.
To sprinkle in a little bit of philosophy here.
;-)
It's a solid proposal and worth a big vote. I don't necessarily agree with all parts of it, but I like your contribution to the discussion.
First, I think passive investors should be paid a return to keep them from mucking with the content through either posting or voting. If the rewards must go through the system, then higher curation rewards certainly would be preferable to expecting people to post junk for reward votes. But it still perverts things somewhat. I'd support it if there's no realistic option to simply pay passive investors some return, but I'd much rather pay them to stay on the sidelines and not feel like they need to post or vote on junk.
As for the downvotes, I think it could be abused unless the rep score accounts for voting behavior somehow. I'm not against your suggestion, but I'd have to think about it more, and I suspect it would need another component to be successful.
As for superlinear rewards, I just don't see it. I still think that would be a mistake because we've been there and seen that things work better with linear. Superlinear is a faster route to more concentration of wealth and power, which is the wrong direction. I think believing that superlinear would work also assumes that larger SP holders would vote for the best content, which is not necessarily the case, though I do appreciate that you are trying to find the right economic balance with curation rewards also. I'm probably one of the people who would benefit from superlinear, but I don't know that it's in the platform's best interest.
Would it be possible to fork some testnet where various ideas like these could be tested?
I've found a place for passive investors that doesn't involve messing with the natural flow of content production or consumption. I explain in detail within this post:
https://steemit.com/steemit/@nonameslefttouse/turning-rage-into-the-soothing-steem-now-blowing-out-my-butt-as-i-mince-my-words-for-you-the-reader-of-this
the common struggle someone like me faces as a content producer here after all these years and I offer a solution that could easily fit in with what @kevinwong talks about here. The post leads to other posts with more information. The comment sections are jammed with even more. People are scratching their heads wondering how to bring new money into the platform and I'm clearly stating the fact this is the entertainment industry and a functional promotional system using ads is one way to bring this new money in. I've explained how, but I need more people to see it.
Yes Utopian is working to setup a definitive place to study the proposal and read opinions about it. @reggaemuffin seems to be handling a testnet so it’s likely we can test these things.
The same problem is going to persist unfortunately, as we’re only effectively shrinking the rewards pool for the passive staking allocation, while the economic incentives for the rest of the users remain the same.
Previously we were at superlinear (n^2). Today we are at linear (n). The proposal suggests somewhere in between (n^1.3) which should be more balanced while making it less predictable for people to put a price on votes, providing variance/contrast, and abuses would only be possible by piling up votes for a more substantial payout so its more manageable for the community.
Cheaper downvotes is more for contingency as most wouldn’t practice it anyway. It just makes it easier to take down abuses or overvalued posts from any gaming. All said, there’s some social cost to cheaper downvotes, but I think the benefits outweigh the downsides of this proposal.
I would prefer a curve which started as n^2 / exponential (thus flat), and then later changed into linear which would work against self-voting as well as excessive rewards.
@clayop had a similar idea.
It's a reasonable set of rules to try, IMO (mostly, see my primary objection in last paragraph).
I've been in favor of the 50% curation rewards all along, as mentioned in my long ago post on this very same issue.
One thing to point out though is that curation rewards are already non-linear: early curators get more curation than later ones. It's only author rewards that are truly linear. Based on that, I'm not sure the n^1.3 is strictly necessary and I'm concerned that it might cause more harm than good by favoring votes by large stakeholders too much. The current form of non-linearity is more "stake" neutral as it's just based on upvoting the content before other people do.
I gave a more detailed explanation of the benefits of slight superlinear in my reply to smooth above, but in a nutshell: forces all profitable voting behavior into the light (wack a mole with 1 hole), disincnetivize profit based spamming and micro voting, make it more difficult for bid bots to accurate place a price on votes and hence increase the cost of content indifferent behavior, helps make good curation more competitive in terms of returns etc.
The superlinear proposed can be probably as low as n^1.2, and even have a linear tail, so in case the added downvote incentives (proposed 10% free downvotes) aren't sufficient in deterring all 'pile on' behavior, the damage will still be in check.
I honestly believe the benefits we can enjoy most of the benefits of n^2 with only a fraction of the detriments in terms of inequality under n^~1.2.
I share your concern with the detriments of all of these measures. I understand that all else being equal, favoring larger stakeholder's vote is certainly an undesirable feature. Similarly, additional downvote incentives can potentially greatly increase the toxic behavior on here. However, bad it is to face an aggressive whale as a smaller stakeholder is going to be compounded when the gloves come off and he's given free downvote stakes. Also, lowering author incentives isn't ideal either and we wouldn't consider it if the current economy worked.
But look at what we're fighting: an economic system that rewards content indifferent voting behavior roughly 4x more than 'desirable' voting behavior. To win, we need to not just shrink that gap but allow content reflective voting to provide similar or even higher returns than vote selling/farming.
The idea is to come up with an alternative system that does just that while doing the least harm to the system in terms of added inequality, toxicity and lower proportion of author rewards. I think our proposal of n^1.3, 50% curation and 10% free additional downvotes is perhaps JUST enough to do that while introducing the least costs.
Some say just the latter 2 measures should be sufficient. I strongly believe we're suffering from n^2 PTSD. Saying the slight superlinear wouldn't work because n^2 failed is like saying that inflation doesn't work because 100% hyperinflation failed. We should consider the benefits/cost ratio of slight superlinear more carefully.
I'm not saying I'm completely opposed to "voting stake based slight superlinearity" as a step beyond the existing "temporal superlinearity" for curation rewards that I mentioned above, but I'd rather try smaller steps first, especially as I'm not certain that the existing superlinearity isn't sufficient. One annoyance for me is that I'm not even sure what the curve looks like for the temporal superlinearity, so it's hard to guess its impact.
50% curation rewards + a change to put downvoting on an even footing with upvoting seems like a simple first try, although I'm not really a big fan of downvoting as I think it has emotional effects beyond the simple math itself.
Also, once any change is made, I think it will take a month or two for people to modify their behavior to the new economics. At this point, I doubt most users have even optimized their voting for HF20 effects yet.
But despite that, I would certainly be happy to move now to a new version of the blockchain rules that supported some of these changes (50% curation being the one that seems "safest" to me).
I think I've read all of your replies here. I share some of your concerns but not all of your conclusions
Firstly I want to clearly spell out the problem: Under our current economy of linear and 25% curation, it is roughly 4x more financially rewarding to participate in content indifferent voting behavior than content reflective voting behavior. This has lead to a complete failure in our ability to function as a content discovery and rewards platform.
The solution therefore is as follows: We need to introduce a new economic scheme that incentivizes content reflective voting by rewarding it at least as much as content indifferent voting.
Higher curation seems like it'll at least be part of the solution. Note that curation % is sort of a soft parameter because the market itself can in many ways circumvent it and set their own curation %. For example, you can view bid bots as offering 80-110% to sellers, undercutting the 25% we've set. That being said, I don't know if there are market incentives to negotiate a lower curation % than the official one (I need more thought here)
Having said that, 50% curation is probably insufficient by itself to compete platform wide against vote farming. Much higher and we risk removing too much financial incentive for content creators. I know there are arguments suggesting we can try curation as high as 100% but lets try leaving a healthy dose to content creators for now and see if we can make up the other 30-50% by other means. I do however view curation as a 'cost' because the $ that finds its way back to the voter is a pointless use of inflation in and of itself. It's the competition of this money that will bring value, and for that to happen it has to be significant, which is why we propose 50%.
I share your concern about downvoting, far more than smooth and a lot of others. However toxic it has been in the past, with something like 10% free downvotes, it will be a lot worse. There are some larger stakeholders here who are somewhat pre disposed to what I would consider needlessly adversarial behavior, and at times with much smaller steemians. However suffocating it must feel for them to be on the wrong end of a downvote chokehold for sometimes weeks on end, it will likely be much more painful. We're all human, this place can take a mental toll on me even if downvotes are financially negligible, maybe you can relate, so I can imagine what it's like to be a smaller account getting pinned down without reprieve. However, even knowing all this I still relunctantly support something like 10% free/separate downvotes. As we remove the lost opportunity cost to casting a downvote, I'd imagine most downvotes would be exercised in good faith. We need an extra force to bring down the rewards of vote farming so that 50% curation rewards can be the most competitive form of returns. Only then can our platform succeed.
This leaves superlinear. I understand the inequality that comes with superlinear, nevertheless I'm surprised at the resistance this is getting compared to greater downvote incentives. I would strongly wager that at the ground level, the detriments of downvotes outlined above would be felt far harder than the inequality of something like n^1.2-1.3.
But why have them at all? Well there are many benefits including making it far more costly to price a vote (as value is now dependent on popularity), making it no longer profitable to micro farm spam posts (100 1% votes are way less rewarding than 1 100% vote), basically it brings all profitable behavior into the light. Notice that while 10% of downvotes are free, unlike upvotes which has curation, there is no direct economic incentive to cast them carefully and precisely. Under linear, if people decide to spam and farm comments instead of playing the game fairly, there isn't an incentive to spend the effort to track them down with your downvotes. But this is impossible with a bit of superlinear.
It basically patches up a loophole that would otherwise exist, as well as reward curation more, facilitate downvotes by drawing easy targets around abuse and makes it difficult for bid bots to accurately price votes. As for its costs, I'd say that n^1.2 is no where near as bad as n^2. The collaborative effort of large players colluding to farm mega votes is greatly disincentivzed by a much more modest curve (compared to n^2), as well as the looming threat of downvotes also being proposed. If I'm right on this, then we get to patch up our loopholes in spam farming and enjoy other benefits of superlinear at the cost of pretty modest inequality. I think it's worth it.
The changes are somewhat drastic by necessity because we're replacing a system that rewards something we don't want 4x as much as something we do. The measures all have their costs, higher curation means superficially more redundant use of inflation, more downvotes will be painful, and superlinear, however mild, is unfair to smaller players. But I'm going for the minimum amount of evil necessary to get us to a functioning content curation system.
I know this has always been a concern of yours but at some point we need to look at the game theory reality of the situation. I'm pretty convinced that ONLY enhanced downvoting (at least a component, if not the only change) can possibly solve the problem when it comes to content agnostic reward-extraction voting. I know that is a strong statement but I'm very confident of it, and I will try to present the logical argument here.
First, we need to recognize that anything else other than downvoting can easily be turned into a vehicle for converting votes into profit in a content-agnostic manner. Curation rewards and superlinear curves don't really reward quality or value add. Rather, they reward concentration (voting for what other people vote for). By either being a very large stakeholder or working together with other stakeholders through trails, delegation, teams, games, side payments, or even reciprocal social convention, it is always possible to arrange for concentration that mutually benefits all of the participants on a content-agnostic basis. Since downvotes don't generate or direct rewards but merely scatter rewards to the rest of the community, they are essentially immune to this effect. There are really two reasons to downvote: 1) malicious/trolling, which is unfortunate but doesn't have a systemic effect on reward distribution; and 2) altruistic/community-motivated downvoting of over-rewarded content, which does have a (positive) systemic effect on reward distribution, but must be free or extremely cheap if you want it to happen on a significant scale (which, currently, it is not)
I think if we want a quality- or value-based voting system we have to take the bitter medicine of downvotes that are cheap, free, and even encouraged (because this is the only way you get people to contribute, at scale, to a social good that relies on altruism). Ideally, we should absolutely work to minimize the emotional cost of it however we can, of course, but that must be a secondary consideration if we want a rewarding system that works. Failing that, I believe Steem will need to just pivot away from voted rewards altogether at some point, or continue with a useless failed/failing system that does not contribute to its success in the crowded and competitive markets in which it operates.
It's a simple fact that superlinear curves reward concentration, as you say. And naturally this can be exploited. The obvious exploitation method is pre-agreements of one sort or another to vote on the same posts in a way that generates reciprocal shares of the resulting rewards over time. If a sufficient amount of stake becomes involved in such arrangements, then the reward system by itself no longer incentivizes upvoting based on content.
Note that this doesn't necessarily guarantee bad curation by such groups. The people acting in such group do still have a reasonable financial motivate for good curation if we assume that good curation makes the coin more attractive to holders. If the group is curating badly, I think it's reasonable that competing groups will arise that "do a better job".
And I think it's also reasonable to assume that a certain amount of people will decide that they would rather vote the way they like, rather than join such a group, in which case they will lessen the rewards of joining such groups.
I don't see how the mere existence of cheaper downvoting necessarily changes the economics above. You've already described it as "altruistic/community-motivated" downvoting. So altruism or like-mindendess is already assumed as a force that exists on the platform (I agree with this assessment, btw).
But altruistic "voting your conscience" also redistributes the rewards, just like downvoting does. It's true that voting "can" be directed towards one's own posts, but if it's altruistic, it certainly doesn't have to be.
The best argument for downvoting from a curation perspective is only that it allows you to actively distribute the rewards away from a particularly bad post that is being upvoted for selfish reasons.
In a system with lots of voters and posts and with a more distributed stake, I'm not sure downvoting would have much benefit at all.
I think in such system, the type of bad "self-voted" post I'm talking about would never get enough rshares behind it to get much value. The only way I could see it happening would be the rise of a mutual-voting group of the type I described at the beginning and the only real counter for such groups is a sufficient group of people who vote differently.
The difference is that this has a huge opportunity cost compared to voting to maximize your own reward (either directly or via some scheme). Since the cost is very high, it is unlikely to see such altruism persist. Sure, not everyone will maximize their own reward, but when the incentives are misaligned in this manner you expect the economy to shift more and more in that direction over time, which is exactly what has happened. I don't believe this has anything to do with stake distribution or the number of voters or any such thing. It is more that it is baked into economic design.
By contrast, once the high cost of downvotes themselves is removed, good downvoting vs. no downvoting vs. bad downvoting does not have a high opportunity cost (in effect virtually none), so it is far more likely that altrusim will succeed. If people had to pay money (or forgo a significant payment) every time they edited wikipedia, hardly anyone would ever do it (in fact, those who did would be more likely to be promoting some sort of manipulative agenda and often damaging the end product). But because editing wikipedia is very cheap/free and frictionless, you do get altruism on a large scale. Crowdsourcing works, but not if you expect people to pay a lot to participate. The only way to get this with Steem is by crowdsourcing downvotes.
This not just a question of downvoting being used actively to 'fight abuse', which is the traditional way we have looked at it. It is a profoundly different setup of the incentives, which can't be accomplished by upvoting, because the economic 'pull' of voting to direct rewards toward oneself and/or one or more collaborators is always there with upvotes. With downvotes it is not.
Such groups would certainly arise if there were significant money at stake, probably cleverly packaged into a game, challenge, service, meme, corporation, investment fund, etc. That is the nature of human creativity.
In any case, we can't simply wish ourselves into a system with evenly distributed stake and billions of users either, even if that would somehow manage to work. We have to need to have economic rules which are robust to real world conditions. Which means downvotes.
Well, no. A superlinear reward system never, in and of itself, incentivizes upvoting based on content. Structurally it only incentivizes concentration. And concentration that rewards the voter is incentivized most of all. Content is actually irrelevant unless there is a large enough portion of the stake voting on an altrustic basis, and as I've argued above, it is very unlikely to see altruistic upvoters persist on a scaleable, sustained basis. (Things might start out that way, but they will surely devolve over time.) The only real hope we have is altruistic downvoters.
Please give this some more thought. It took me the better part of two years to finally reach the conclusion that downvotes are essential (and not just theoretically-possible expensive downvotes that are hardly ever used, the way we have now), but I'm now quite confident it is correct.
We could expect bid bots to decline rewards, this still trends the post but leaves those of us that don't buy our trophies alone instead of subsidizing proof of wallet.
The bots get their curation rewards upfront in the form of payment for services.
This should lower the price of hitting trending, and clearly labels ads.
I think we need a better assessment of how much of this is still going on. I've heard that it has been significantly reduced already with the changes in HF20 (which did indeed introduce a slight degree of non-linearity on the low end, in addition to the bandwidth->RC change; both probably reduced or eliminated spam profit on the low end).
This will already happen with the switch to 50% curation. Curation rewards are non-linear and I doubt it will be feasible for bid bots to continue to ignore that when curation is 50%.
Narcissism of small differences is a name of a study, I extended it, perhaps too liberally, to apply here. Apologies for the confusion, I certainly didn't intend to accuse you of being a narcissist.
I agree that hf20 likely reduced micro vote farming. But I suggested it as a precautionary measure in anticipation of behavior that may come with the other proposed changes. Assuming things are otherwise working fairly well and curation rewards becomes the dominant form of profit maximization, consistent losers in curation may turn to such behavior to hide vote farming. It's not as much of an issue now partly due to hf20 and partly because under current economics, one can do it openly. If things start working and people start downvoting open farming, this spamming fuckery would likely increase. As I mentioned before, due to the lack of direct rewards for good downvoting, we shouldn't expect immense effort for it to be done very well. Forcing profitable votes into the light will be far more important in the future as it'll improve downvoting immensely. I want to close this exploit tightly if the price isn't too steep.
I admit overlooked the effects of non linear curation. I did however, factor into consideration that higher curation itself, irrespective of the curve, will directly introduce significant price uncertainty to bid bots. As they run on a timer dependent on voting power regen, and bid transactions are announced beforehand, they'll likely be at a considerable disadvantage with higher curation. Nevertheless the effects of superlinear on this will be additive and very strong.
We have a laughably poor economy that rewards content indifferent behavior 4 times more than content reflective behavior. We want to introduce changes to make the latter to be at least roughly as lucrative as the former and hopefully have value adding voting behavior be dominant on the system. Every measure I can think of (including the 3 proposed) has it's downsides. So the idea is to use just enough force to make the necessary behavioral change and no more.
If we cut something on one end, we'd likely need to up our dosage of another poison elsewhere. For example, if we dismiss slight superlinear, then stakeholders may attempt to circumvent the intended way the game is to be played by spamming more posts and self voting the ones with the least potential curation rewards 'stolen' by others after 15 minutes. Now downvote incentives will have to do more of the heavy lifting here and would likely need to be higher than if we took some of that superlinear poison. As mentioned, in many cases, downvotes are a less consistent and softer counter to undesired behavior than superlinear, and of course it has it's own downsides.
My prediction is that the benefits of some superlinear (maybe as low as n^1.2) would considerably outweigh its cost in inequality, and should be part of the changes. I can of course understand if, after careful consideration, others such as yourself do not think this is the case. What I can't understand is how such a fundamental problem in the economic of Steem rewards which has lead to this platform being completely undermined has not been addressed in over a year. I don't even think most people, including those at the top, have a correct diagnosis of the problem; the confusion and inefficiency is truly depressing, especially as I believe this problem can be remedied. This is why I am very grateful for your help smooth, despite our small differences in opinion.
I know the reference and was simply building on it to make a point! I was not personally offended but I appreciate the clarification.
I would agree with this, but we simply don't know the necessary dosage overall. If you have done some sort of research to support that, quantitatively, your prescriptions in each of the three dimensions you propose as well as the combined effect result in some optimal outcome, you haven't shown it. As far as I can tell, you along with everyone are just guessing when it comes to the question of 'dosage'.
In that sense I would also agree with @blocktrades that it may be sufficient to be conservative in making too many changes at once and try just increasing curation first (even without downvote changes, which as you know by now are my personal view on the most important dimension here, by very, very far) and see what happens. If that doesn't produce the desired effect then we can consider how to up the dose in the most effective manner.
HF20 made some very modest changes and it has apparently had an observable effect in terms of dust farming and spam. That's a good thing, and not necessarily a bad approach to continue (making incremental changes, one or a small number at a time, so we can observe their effects).
Likewise, and I absolutely agree that the lack of any sort of action on the clear failings (other than the very modest changes in HF20 which took an absurd 1.5 years to be deployed after being designed) is a travesty.
As a followup answer to my concern about superlinearity, please see my answer to @smooth in this thread. Super-linearity inherently increases the power of voting groups like the one I describe there, making it more difficult for them to be combatted by "dissenting voters" with lesser stake if those dissenters don't similarly band together. With a linear curve, such groups don't have to unify their voting to fight such tactics.
I disagree. Why should I get 50% back of a vote I give to you or any others?
It would only make whales like you and me very much richer.
Please Keep the CORE ECONOMY as it is.
@fyrstikken / @fyrst-witness
The original rules were in fact 50/50 between curation and author rewards. The "75% author, 25% curator" change and the "author gets most of rewards during first 30 minutes" change led to many of the abusive self-voting of contentless posts and comments that we see today, IMO. Fortunately, the "author gets most of the rewards during the first 30 minutes" was overturned with HF20. But the 75/25 change still exists.
IMO, changing back to 50/50 will lead to improved curation results (better posts will rise to the top again) which I think will lead to increased Steem prices (which will benefit all long term participants in the Steem economy). If you want to understand my rationale, I went into much more detail a long time ago in this post (it's a long post and note that some of the full explanations are in the comments):
https://steemit.com/steem/@blocktrades/voting-abuse-and-ineffective-curation-a-proposal-for-blockchain-level-change
Hello @blocktrades. I focus on content production mainly, but use the stake I've earned to curate manually. I do not purchase votes, ever. With this approach I'm able to speak from experience.
Recently, my content earned enough to generate roughly 50 SP for curators within a seven day time period with about 1 post per day. With 23500SP, I'm able to curate manually without paying much attention to timing and earn around 50 SP in curation rewards. Basically I'm getting the full value of my content because I'm curating to make up for what I lose to curators.
What I see with 50/50: More people voting, which equals higher rewards on posts. So curators can take 50 percent and in some cases, due to more incoming votes, people coming out with higher rewards than before. Then if they're in the position someone like me is in, they can make up for the 50 percent loss by curating others and seeing a larger portion of curation reward flow in. I can see myself earning more with 50/50 simply because of the added incentive to vote. It seems like the 50/50 would create enough incentive to lead up to a positive feedback loop. Purely speculation of course.
If others wanted to be in my situation, they could simply power up their earnings like I did. The incentive is there, and that also contributes to this positive feedback loop I speak of.
I also have a link to share with you. I offer the perspective of a content producer who's been around for over two years, what struggles we face. Sometimes we don't have much of a voice here, but this is mine. Near the bottom I offer a possible solution to some of the chaos we're experiencing and a way to bring in new money to the platform, the smart way, using a proven business model with some added innovation. Power through it if you have time. I feel it's worth it.
https://steemit.com/steemit/@nonameslefttouse/turning-rage-into-the-soothing-steem-now-blowing-out-my-butt-as-i-mince-my-words-for-you-the-reader-of-this
So many bloggers will be totally pisst, changing to 50% Curation would mean that authors get less money per article.
A very drastic and unnecessary move. I remember those days, and we did not have any quality articles. With few exceptions, it was for the most part "circle jerking" going on back then.
We want the people to thrive here, not so fun watching you $8 post, knowing you only going to get $4.
Let's forget about going back and instead speed up these account creation. That system works way too slow, rather fix that because we do want people to come here.
First, I disagree with your assessment of quality "now" vs "then", especially if we're talking about the trending page.
I think you're missing the key point of Kevin's post and my earlier one: the current 75/25 split encourages self-voting of nearly contentless posts over voting for quality posts written by others. The idea behind increasing rewards for curation is to reward voters who vote on quality posts (by which they gain curation rewards) rather than just voting for their own posts or their socket puppet posts (by which they gain author rewards).
The idea is to change the economic incentives to cause voters to behave in a way that better content rises to the top. At 75/25 the economics are totally weighted in favor of self-voters. If you follow that out to its long-term end, the self-voters end up with all the coin.
As far as upsetting bloggers, I believe the final result will be to make them happier (especially if they are good bloggers, as the change in voting will reward "better" content more than "crap" content). The primary driver for higher rewards for both authors and curators is a higher Steem price. Anything we can do that moves the price of Steem higher benefits everyone in the Steem community. Having Steem work properly as a efficient content curator will make the coin more attractive. The current self-voting issues are a big black eye for the coin.
I would be quite happy with that. Getting $4 from $8 is better than getting $3 from $4. However, I imagine it might create a little problem for bot owners.