What I'm Doing as A Witness to Fix the STEEM & SBD Value (what YOU should do too.. maybe)

in #steem8 years ago (edited)

We're facing a small crisis in regards to the current situation with STEEM and SBD value, Steemit user retention as well as resistance towards ideal conditions for investors to enter. While plenty of talk has been seen in various posts here on steemit and in the chat channels a lack of actual action continues to see the price of both STEEM & SBD fall. It's time as a community to change this immediately.

I'm writing this post as a proposal to my fellow STEEM network inhabitants, witnesses and developers to follow my lead if they agree that STEEM & SBD have future value.

What Can Be Done About This?!

For starters one thing to keep in mind is that STEEM is still a very new platform and economy and part of any newly designed system is calibrating it and fine tuning the necessary parameters in order to ensure both current and future success.

We're still very much on the "maiden voyage" of the STEEM platform, with the high post payout honeymoon phase now over and fading in peoples minds we've got to shift our focus into the longterm game plan: start offering more lucrative incentives for both current and future readers, curators, content creators and investors.

Setting the Steem Dollar Interest Rate Higher
Scaling the Account Creation Fee up too!


What that picture above is my latest witness update today. I've set the Steem Dollar yearly gain to 20% APR as well as scaled the account creation fee to 51.337 STEEM worth around $6.85 USD at the time of writing this post. Not only will this encourage people to convert their STEEM payouts to SBD and hold for more profits but also help enforce the peg as well as create demand and stronger hands.

This change across the network would see people gaining 1.66666667% on SBD balances monthly and have the account creation fee Just under $7.00 USD of STEEM.

Converting STEEM Payouts to SBD in the Internal Market
Help Fight STEEM Inflation Instead of Dumping



The Problem: People are taking their STEEM and dumping it on the market rather than holding on for a large reward later. This causes the STEEM price to plummet.

Solution: Instead of taking your STEEM and Converting it to BTC consider instead swapping it for SBD on the internal market to collect interest paid out monthly.

Powering Up STEEM Rather Than Selling Helps Everyone
By Powering up Your STEEM Payouts Vote Power Grows



The Problem: Content creators are preferring to liquidate their payouts for BTC instead of powering up or converting to SBD and holding. This strains prices.

Solution: Instead of taking your STEEM and selling on the market it consider powering up your or converting to SBD and holding for the interest paid monthly.

A Call to All Users, Witnesses and Developers

Please consider mirroring the above when you find yourself with more liquid STEEM than you need to cover your monthly expenses and time spent creating content.

Converting STEEM to SBD in the internal market greatly helps balance out the hyper inflation we see with STEEM. Do your part where you can. Every little bit helps.

Fellow Witnesses: Please consider adjusting your APR rate to 20% or more and upping creation fees! We're the ones who need to lead by example. Help me Help STEEM.

(all images are screenshots from http://steemstats.com by @jesta)


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https://steemit.com/~witnesses

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Since we don't have as many options we have been doing the following.

  1. Buying STEEM on the way down with Bitcoin mining profits
  2. Converting some STEEM to SD
  3. Sending STEEM to others
  4. Powering up STEEM
    Is there anything else our small team should be doing?

Sounds like you're doing your part! You're an asset to the network sir.

We do have some extra computers from our old servers should we consider mining STEEM or something?

You could! With the patch to the mining code recently it appears that more users have been successful in mining blocks. However I'm not entirely sure at this point a miner would run in profit.. Perhaps if you have cheap / free electricity.

No not cheap unless we move to China :-) Is there any added value if we become a witness or are there plenty already?

I love your posts mainly because they are slightly absurd......I see your points here which seem good.......what about user retention????

This is all incredibly confusing to me, as a noob (I am reading and learning). But assuming I just believe you know what you are saying, since I have no steem or anything else, how do I help? I really don't care about bitcoins or Steem Dollars, I just want to help (I came here because of the distributed nature of it and the emphasis on authorship and avoiding censorship).

As an author, just keep writing. Not everyone can contribute in every possible way, but that does not mean your contributions are unwelcome. If one of your posts becomes popular then you will earn some rewards and then you can consider trading them for SBD or powering them up. Until then, welcome to steem. As you say, it can be confusing, but just take things in at your own pace.

Sounds like you are here for the right reasons!

You can help by simply logging in every day, making a post or 2 and voting on others stuff.
More active engagement we see on site the more likely you are to see folks stay. :)

Here's what I have done and am doing:

  1. Invested a lot of my time studying and thinking about the STEEM and SBD markets as well as the SBD pegging mechanism. That led to my recommendation to raise the SBD interest rate and to discussions about it and related topics both the #price and #witness steemit.chat channels, and privately with other developers and witnesses.
  2. Risked my own capital by engaging in trading in both internal and external markets to support the SBD peg and reduce SBD debt. I've also spent a lot of time discussing these strategies with other traders on the #price channel. I encourage others to participate but also want people to be informed that these strategies are risky and can (and do) lead to frequent losses.
  3. Developed the teamsmooth internal market market bot (currently in pre-release testing) which your screen shot above shows that you successful used for trading there. This makes using the internal market instant, easy, and cheap for users wanting to exchange modest amounts of STEEM and SBD. The nature of the service and the Steem system mean this market maker is expected to lose money and is (as with all teamsmooth initiatives) subsidized by my witness rewards.
  4. Pledged to inject external capital to buy and hold at least 25000 SBD to support the peg, if and when the interest rate is raised to at least 15% (I do not feel that the risk of buying and holding SBD is justified at 10%).
  5. Voted for @klye as witness!!!

The platform needs more than just inflation and user growth. The systems that we compare to like Facebook, do now, after having lived on expectations for a while, have an economy based on commercials and big data collection. The latter is of course a no go zone, but advertising is not. They already discuss how to make a foundation to get fiat money into the steem system. When that happens Steem will again be interesting to investors an it will rise... If not we have wasted some time, but that happens every second. It's called life. Of course this aspect is scary for wage earners, but I have worked for free so many times in my life, and nothing really happens, except you continue to be a vagrant. This is just a crisis and if we get over it (and I think we will) there will be bonuses to all who stood it out.

For now I actually do follow your advice. I have only received Steem Power for my posts since the possibility for doing so was there. No need to speculate against Steemit when it is going downwards.

I like the 20% idea.

Another thing I think would be to maybe somewhere show in your wallet how much interest one is earning by day.

We do that with Steem Power, why not do it with SBD?

That would be a welcome GUI implementation!

Upvoted, but I don't actually agree with the idea of increasing SBD interest rates..
We're currently trying to lower the amount of SBD "debt" , and this would encourage SBD hoarding imo.

It would encourage people to hold. You're right.. But is retaining value on the network not worth reward?

As for SBD "debt" I'm not sure I follow you.. Care to TL;DR it?

Retaining value in Steem Power is what should be rewarded , this post from @timcliff (under heading "The SBD Debt Problem") explains it better then I could, but ..

TL;DR - If price continues to fall, big SBD holders cashing in will inflate the steem supply and create a feedback loop to push price down even further.

We also have measures in place that will break the SBD peg, making it even less desirable to hodl..
I think this possibility is already starting to be priced in over the last few days.

I don't know what the solution is - I'm mostly hoping new site and tech improvements, marketing efforts and steemfest hype help reverse the trend..

Hi @ausbitbank - I've actually talked this over with @kyle and @smooth in the witness and price channels and I support what they are doing. Raising the interest rate of SBD can be done in addition to what I was proposing in my post. (I suggested doing this in my post as well actually.)

There are actually multiple problems all trying to be solved at once. There are things that people can do which are better than others. For example, if you have STEEM, buying SBD is better than selling it on the exchange. Technically powering it up is even better than that, but it is relative :)

[Edit] To provide a better example, buying SBD, converting to STEEM and powering up is probably one of the best things that can be done. Buying SBD and holding is not as good, but it is better than selling on the exchange :)

Aah okay good to know, with so many variables its getting hard to understand what we're supposed to do to help..

Yeah, I know. I actually started by proposing that we make the interest rate negative (to encourage users to burn it like a hot potato) but @smooth talked me out of it in that it could create too much burning / downward pressure all at once.

I think @timcliff summed it up in his reply better than I can! Thank you Tim!

There are multiple things that need to be tweaked. This is just the start. :)

I've been wondering, why has payout gone to full Steem and Steem power? Does that not just exacerbate the problem by diluting the supply of Steem on the market and forcing those who are selling to dump more and more and more? Wouldn't it make more sense to go the opposite direction and give more post rewards as SBD, thus removing more Steem from the diluted market, and slow down the selling rate? Am I crazy here or are we going in the complete opposite direction of where we should if we want the inflation to slow down?

It is because the "capacity" of the system to handle SBD has reached an exceeded its maximum. As some of the other comments noted, there are multiple challenges occurring at the same time and this is one of them.

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