RE: Where are the Votes (SP) going?

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(Edited)

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The options are purely theoretical of course. We could use the inflation rate to calculate the theoretical distribution curve over time using each of the options, where option 3 could be split in a lot of different subcurves. But what would that show?

I don't have the exact numbers at hand, but roundabout they should be fine:
inflation rate: 10% (for the sake of rounding, it's actually lower)
a) dao 10%
b) witness 10%
c) inflation on SP 15%
d) curation 32.5%
e) posts 32.5%

Self voters receive 80% (c+d+e) of the total inflation and leave 20% for witnesses and the dao - both basically developers and (self-)marketers.

Burning the posting rewards removes e) and changes the remaining as follows:
inflation rate: 6.75%
a) 14.8%
b) 14.8%
c) 22.2%
d) 48.1%

Now we have 70% of the inflation for the burn voters, and 30% for witnesses and the dao. Not a huge change in percentages and still no distribution outside of those two groups.

For option 3 let's assume curators who vote 50% established, 50% new users (which is pretty optimistic). The percentages are the same as for option 1, so:
20% for witnesses and dao, 63.75% for stakeholders and 16.25% for new users.
16.25% of 10% inflation mean a dilution of 1.625%.
With votes going 100% to non-stakeholders that would switch to 47.5:32.5, bringing the maximum possible dilution to 3.25%

Okay, now to the interesting part :D To calculate the real effect regarding dilution of stake, we need to include the vesting ratio. Hopefully more or less accurate numbers I found quickly state that 210M Steem are powered up, at a total of 360M, which results in a ratio of 58.3%, let's say 60. This means that 40% of stake which the inflation rate is based on gives up on their share on c and d, leaving it for the rest to grab. It factually raises the rewards, giving the ones using c and d 66% more rewards than if all stake was active.

1000 STEEM created actually distribute the following way:

option 1&3:
a) 76
b) 76
c) 189
d) 412
e) 247

option 2:
a) 101
b) 101
c) 252
d) 546

So - while option 1 leads to a self-allocation of 85%, option 2 lowers that to 80%, leaving the other 5% to witnesses and the dao.
Option 3 allocates 60% of the inflation to the voters.

Conclusions:

I) The maximum distribution rate if all votes would go to non-stakeholders is 2.5% of the total stake per year, plus 1.5% via witnesses and dao, resulting in a total maximum dilution of 4% per year. All those values are actually lower, because I think the inflation rate is closer to 8% than 10%.

II) Burning post rewards only has a minimal effect on self-allocation of inflation compared to self-voting. In this purely theoretic scenario at least. In reality there are a lot more factors, for example that an individual using option 1 hurts everyone else, while option 2 is neutral in that regard.



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Holy shit. I got carried away I think :D

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(Edited)

I need to write this down on paper and pencil and digest. Thanks, both of you @smooth and @pharesim!!

and I know you hate them tokens :) But I got a new toy and I will use it!!

!ENGAGE 50

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(Edited)

I need to write this down on paper and pencil and digest

That, and posting about it, would probably be helpful.

That's pretty much what I was referring to when I was commenting about marginal value and such, and one can turn some of this into fairly simple equations that could help improve understanding. I'm as guilty of anyone of throwing a lot of opinions around without really doing the "homework".

The thing about most (not all) of the milking/self-voting posts is they actually have some positive value to Steem, it is just that they are grossly over-rewarded. And many sincere (not intended as milking) contributions likewise have very low value. If they are getting nothing, that can be improved, but if they are getting too much, that's not good either. As with most economics, the questions are more on the margin than of absolutes.

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(Edited)

for example that an individual using option 1 hurts everyone else, while option 2 is neutral in that regard.

I think that is actually a huge distinction, not a minimal effect.

That's not even the full extent of it either. Self-voting is "sticky" in a way that burnpost is not. Someone voting for burnpost need only see something with some sort of vaguely positive value to rationally decide to vote for that instead, but a self-voter won't because they would be giving up their own rewards.

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