The Economic Improvement Proposal is a rather controversial set of changes to the STEEM blockchain that seem to be primarily aimed at incentifying passive stakeholders to use their stake for discriminate curation rather than self upvotes or running/delegating-to bid bots.
With the EIP about to hit us with the upcoming HF21, there are a few concerns how HF21 could backfire, or could end up not working as desired.
In this post I want to discuss possible post HF21 fixes and improvements that could and probably should find their way into an EIP 2.0 for HF22.
I want to do this by taking the seven ways HF21 could backfire, and discussing a potential EIP 2.0 feature that could help either attenuate of fix the specific issue if it arises.
In this post I propose a set of five measures, three of them for the block chain, and two of them that could either be implemented on-chain or in some kind of 3th party DApp. For the later two I want to argue that they are sufficiently fundamental for on-chain implementation within the context of an EIP-2.0.
1) Reduce dust-level treshold.
A huge concern with HF21 is that it might kill of social interaction, partially by dustifying all comment upvotes in the $0.023 .. $0.090 range of current pre-HF21 value and partially by reducing pay-out for comment up votes in the $0.09 .. $1.00 range with up to 70% of their current value.
The second part basically can't be fixed without going back to a linear reward curve, but the first part can. If we reduce the dust-level from $0.02 (after curration) to $0.006, no comment that currently gets rewarded will get pushed below dust level. The pay out will still be 70% lower, but at least there will be a pay out. It might even be desirable to push down the threshold a little bit further down in order to promote social interaction on the post of larger red fish and smaller minnows currently already unable to break through dust level with a single vote. I would like to propose a new dust level threshold of $0.002.
2) STEEM-burning bid-based add-revenue sharing
When discussing economic improvement, there are two issues we need to give attention to that either aren't covered in HF21 or are actually partially hindered by it:
To look at these two, we first should discuss why they are important.
When it comes to the economic aspects of the EIP, it is important to realize that the intrinsic value of STEEM is determined by the value of the STEEM platform. STEEM as a content publishing platform derives most of its value from the quality and reach of the content published on the platform, and as such, and this is often ignored when discussing the STEEM economy, STEEM competed directly with ad revenue sharing platforms for top content creators. If we are honest, we must admit that STEEM is doing a horrible job at onboarding top content creators, and that some of the measures in HF21 aren't helping in bridging the huge gap that migrating content creators will need to overcome after making the switch. In fact, the EIP is widening this gap.
A second thought we should examine is what inflation does to the value of STEEM. When traded, STEEM is competing with many alt coins that don't have build in inflation levels, and to be frank, traders don't like coins that are merely money printing machines and that is how STEEM is currently viewed by many traders. The fact that we have an EIP in HF21 and this EIP doesn't adress inflation in any way might be a blow to what remains of the confidence some traders might still have in the STEEM coin.
If we combine these two issues, and if we remember the (barely used) promoted tab on steemit that aimed to provide exposure in exchange for an action (burning STEEM) that reduces inflation, then a single potential solution to both problems shows itself.
What if we could create an-add revenue sharing platform for STEEM. An ad revenue sharing platform that allows bid based add revenue sharing where ad revenues aren't shared between some DApp owner and the content creator, but one where add revenues are shared (primarily) between the content creator and @null. Where a facility that helps onboard top content creators also helps in reducing inflation by burning STEEM.
While this one could be implemented as a DApp without specific block-chain support (I am currently in the planing phase for such a DApp), the idea should be sufficiently fundamental to the STEEM economy that there would be advantages to doing it in-chain.
3) Post upvote/downvote buckets
While some fail to recognize the value of old-data based simulations of new rules, such simulations currently clearly show that HF21 is highly likely to incentify an unintended growth to the current bid-bot economy. In a post I did earlier, I discussed one important tweak to the current EIP to address this problem.
The idea is to put up-votes and down-votes for a post into two different buckets, and use a different reward split between authors and curators for each. We increase the author split for up-votes and increase the curator split for down votes in order to disincentify false curation in a way much stronger than just having a few free down votes on its own. It is the combination of the down-vote pool with the asymetry of the buckets that should incentify passive stake holders to move to true curation or at least content oriented algorithmic curation over the use of bots that indiscriminately upvote.
Only when the curator share ends up negative, does the negative part overflow to the author. This means the bucket system shouldn't hurt policing services flagging plagiarism down to zero. The only true scenario where the bucket system makes a huge difference is in countering the use of false curation.
4) A scaling curve
A second measure I proposed before is the use of a scaling reward curve. One potential problem with the convergent linear reward curve arises from the fact that the curve is a non-scaling function that incentifies a shift of bad behavior to a higher point on the reward curve. That is, bad behaviour that currently happens at for example $0.50..$5.0 level is likely to shift to $5.00..$50.00. Wherever the curve starts to approach linearity will be the central point where abuse will move to.
A good alternative curve that does scale would be one of the shape:
n x S^log(n)
To stay close in impact to the now proposed curve, I would sugest to use the following reward curve function:
n x 1.19^log10(n)
5) A tradable STEEM-ONBOARD token
Other than the four measures above, this one is a really rough idea that might have drawbacks I didn't think of. I still want to put it out there though because I feel it is a measure that might have merit and needs to be debated.
A final measure, and one that partially addresses the social interaction problem and the problem with the bridgeable gap for onboarding good content creators, addresses the damage done by the EIP to smaller accounts in a market ruled way.
Imagine we double down on the negative impact from the EIP in terms of both reward curve and reward split. Now imagine a new token used in rewarding where both the reward curve and reward split counter that of the doubled down EIP. Now we divide the reward pool up in two parts. One part as regular STEEM reward pool and the other part as STEEM-ONBOARD token reward pool. Then we simply let the market decide on the reward curve and reward split.
This could be dimentioned in different ways, for example in such a way that if the market wants the current EIP, one STEEM-ONBOARD will be worth one half a STEEM. If the market wants the old linear curve with a 75/25 split, one STEEM-ONBOARD could end up being worth 10 STEEM. There are just examples, and a lot of work would be needed to pick appropriate values for a feature like this, but I do think there is much potential for a market driven curve and split that could be brought about by creating an extra reward curve.
As with the SteemSense example, this part could be implemented outside of the chain in a way similar to how #palnet is currently implemented. In fact, you could look at it as a reverse palnet.
Scenarios not adressed
The above combination of five measures could potentially help attenuate or solve five of the seven potenial ways that HF21 could backfire. Two remaining scenarios that deserve due attention and should be looked at for an EIP 2.0 are:
- Escalating flag wars
- Passive stake holders selling
With HF21 being basically a done deal and a high potential that at least part of the seven ways this HF could backfire will become a reality soon, I feel it isn't too soon to start thinking about an EIP 2.0. To start thinking about a possible emergency HF22 when things turn out badly. And maybe start building on contingency DApps like a reverse palnet and like a SteemSense proof of concept add revenue sharing platform.
(For those who want to support work on SteemSense for this purpose, buy some STEEMSENSE on steem-engine or drop me a message if you have Python and Twisted skills and would like to contribute to this project that is currently in early planning stage).