What happens after a Chain Split?

in #steemit10 months ago (edited)

Hi, @jayplayco here.

There is a lot going on with Steem and it is worrying and also tiring for a lot of users and investors.
Steemit Inc., Witnesses, and a divided community are currently not really finding a hot spot to agree on and each side is in the moment busy to convince each other. As far as I have seen these kinds of negotiations in my career it will end somehow with the fact that everybody will also lose a big part.


1. Short summary only with facts about what happened.

  • Steemit Inc. is sold to Tron.
  • Tron announces partnership and release information like Token swaps and migrating Steemit to the Tron Network. Most of the information that has been released on Medium or Twitter is now deleted but can be found on several sources.
  • Witnesses decide to soft-fork and release 0.22.2 which disable Steemit Inc.'s related accounts to vote for witnesses, powerdown or move liquidity.
  • Steemit Inc. (Tron) partners with exchanges, let them powerup and setup sock puppet as witnesses to release a 0.22.5 version, which is reverting the measurements of 0.22.2
  • Witnesses and community members are gearing their Steempower to avoid a forced hardfork.
  • Several meetings between Witnesses and Tron, Justin, etc. happen but don't really find consensus.

2. What do they want to say?

The emotions on this are high, so I tried to keep only the essence of it what each counterpart is trying to say.

1) Steemit Inc. (Tron)

  • Steem that has been bought with Steemit Inc. belongs to Steemit Inc and can and should be used as wanted.
  • Under the current circumstances, Steemit Inc. fears that as soon as the sock puppets are released their funds could be locked again.

2) Witnesses

  • Softfork 0.22.2 did not had any ill intentions.
  • Sock puppets are destroying the governance and the power should be given back to the community.
  • Steem that had been bought from Steemit Inc. can't be used for anything else than the Steem community.

3) Users

  • Divided into different opinions as it should be in a community.
  • Either choosing a side and making their comments on it.

4) Investors (non-preminded)

  • Heavily concerned about the current situation.
  • Two bigger investor groups(?) are speaking out (@theycallmedan and the KR community)

2. Where we stand.


The situation is changing each single day, but each countersides are currently staying on their arguments not backing up. There are mainly requests from both sides but even baby steps are not sure as also the voices from the witnesses may not be united in a short period of time, which may be the difficulty, beauty and downside of consensus.

Also the witnesses came to a conclusion that it is better to let a representative speak for all, then having everybody their individual sayings to be able to move forward.

3. What are the scenarios after a Chain split?

Please be aware that these Chain Split scenarios are from now all personal views counting different influences into it.

1) General parts

There are small differences which part would fork themselves out, but we keep that detail just aside.

  • Normally there would be a snap shot from point X, where a sisterchain would start the chain with their own witnesses.
  • If we call the divided chains as Steem-A and Steem-B, users should (would) have from that moment both Steem-A and Steem-B available.

But there could be also a setup, where the sisterchain allows only to MOVE Steem as atomic swap to another chain. This could as an example prevent having Steemit Inc. any influence without the need to fork any specific stake out of the chain.

2) The future of a Steem under Steemit Inc.


I see the following scenarios are possible because there is no other way than to give up on the investment on Steemit or to increase the value of it. And the chain would not be able to increase value when there are no resources put into it to increase the overall number of users.

  • At least 30% of the user base will boycott the platform and move on to the sister chain. (USA, Germany, Canada,etc.)
  • Steemit Inc. will have to utilize one of their highest assets, www.steemit.com and make changes.
  • Engineers will need time and effort to get into the Code behind Steem but resources should be not a problem.
  • Steemit Inc. under Tron will move on with easier logins, instant signups, etc.
  • Resources to bring changes to the UI that are needed for Steemit Inc. would be also something where resources would be put in.
  • Marketing, Events and stabilizing the price with their resources to increase users.
  • Pushing to get Steem on more exchanges.
  • Keeping Steem on bigger exchanges.
  • Witnesses would be probably new ones, as the current witnesses would never support it.
  • If Steemit Inc. is not able to bring new users and a new dynamic on board, the community will not survive.

3) The future of Steem under the Community.

  • There would be from Day 0 a small but very fine English speaking community available. (Estimated 500-800 active users)
  • They would probably fork the Steemit Inc. stake out and use it as SPS or similar for the community.
  • Frontends like Steempeak, esteem or busy.org would be used (when they move with the community)
  • The community would need to start to find exchanges supporting them. There are currently some that have expressed interest, but it should be carefully handled as they could also just use the noise marketing to profile themselves for the moment. The overhead cost to keep Steem on an exchange without enough traffic is a higher burden than normal users know.
  • It could be harder to find enough liquidity on any exchange that is handling the community Steem.
  • The community would need to find either an investor or crowdfund enough money to fund the development of the blockchain.
  • The idea to uses SPS funds for developing is interesting but only possible when the community finds enough investors to buy their token. Otherwise, the SPS amount would be to low in USD's to have developers attracted to the chain.
  • Most of the investors that bought Steem would rather rush to sell the community stake into any possible market, which would be a very heavy sell pressure when nobody is able to make a buy wall.
  • If somebody is interested in how community-based token prices are evolving, just need to look at the wide base of Steem-Engine Tribes, price, and volumes.
  • Witnesses would need at least 5-600USD converted from their activity to keep their servers running. If the logic doesn't change for the community chain and witness rewards, they would need at least a price of 0.07USD per Token to keep it even.
  • The only source of money would be either to squeeze the community itself or get funding for the community from outside. And for that, the community would need a dedicated person who is doing the funding for them.
  • A bigger investor group like the KR community and Korean investors (who are not always Steem Users) would be not likely part as investors on this chain. (which would eliminate about 50% of the volume)

4. What should we do?

I can't give you an answer on that, because everybody (including Steemit Inc.) will and is going to decide with their SP and vote on the future. I just know what will happen under the current circumstances and that a community chain is indeed a cool thing, but without the needed resources just cool.

As a content creator, I would have to choose the right platform for me where I can reach more people and increase my visibility. As an investor, I would need to choose the platform where I can see that my investments will grow. Maybe this interest needs to be split within our reality. But maybe, each parties will find a way to live together.

Beneficiaries to Steem.dao.


Thanks @jayplayco, a great analysis and prediction for the FORK.

Although I predicted that a FORK is NOT avoidable upon Steemit Inc's acquisition around one month ago, and the competition in the future will happens among Tron-Steem, Steem Classic and EOS Voice, in my post 失名器天下三分,拾真魂同结一心 | 在Tron收购Steemit之后, in the reality, I would like to try the best to let us go against that ending.

In another word, we need to re-unite the community and stakeholders. We all know this has been very challenging, but we still need to take actions. Korean community have done a very great job for that already. Instead of focusing on the different opinions, we may focus more on the common ground:

  1. Vision: It's actually a great time to retrospect what's the true vision and value of Steem itself. If SMT is the thing everybody wants, then make it. If we want to Tokenizing the Web, then remove the road blocks such as poor signup experience.
  2. Threats: We should not ignore the outer threats including Voice, though in its baby time. When Steem communities are fighting here, other forces are growing. Have we heard about how the Voice (beta) community react to these dramas?
  3. Money: The community have shared investment benefits (the STEEM price at least), and everybody wants to gain more. A fork is really hard to be economically beneficial for its followers (maybe good for seldom in the forked chain, but not for the majority).

I don't have concrete plan about how to move on yet. At least one thing I'll work on is to call for the community forces to help with the SMT build, testing and release.

Finally I believe we need wisdom to go through the hard time, and a new era will arrive anyway.

It is indeed a hard time for the community and I also do think that we are in moving to another era. Thanks a lot for your in-depth insight.

Thank you for ironing out current situation based on how things will unfold in consequential base. People need to think rational here. 👍

Sometimes ideology can't be combined with rational thinking and that is maybe a point that has to be accepted as it is. But we will need to prepare for the outcomes due to these facts.

Absent from your assessment, one main criticism I hear from outside people is how the voting system of Steem is currently rigged in many ways. Shamefully, I cannot disagree.

If a fork happens, that reputation will grow and it will need to be healed.

I think a community fork will address this issue of fairness better than the Tron/Steemit fork (maybe I'm wrong).

Top down approach (Tron/Steemit) vs Grassroots approach (community). Hard to say which is better.

Thanks a lot for your input. Both approaches are valid. But the community approach does need from ground zero the support either from the community itself to buy up or locks up their stake or investors (from the community or outside) they would be ready to buy the tokens from the community. Because that is the result of the economics from POB.

Already having a very strong community with a DAU of 100K would make it quite easy, but at the moment we don't have that number of users available and would need to build it up.

It would be rather easier to build a community without any rewards and having the right issue like "decentralization" than to be able to reward everybody from the beginning without having the fundings behind.

We will see what the future brings to us. :)


Everyone is frustrated we had to wait too long for DAO and we are waiting longer for SMT.

I think using SMT wisely may resolve issue of rewards.

Dao proposals can potentially inject money into the popular communitied, projects and SMTs, and the reward pool can slowly be shut off (or send more % to dao).

Maybe some steemit steem can be delegated to community supported delegations (I'm not sure how it was decided before).

Hopefully trust can come again.

Few problems I see with your analysis are:

  1. You don’t mention that core Steem blockchain engineers resigned from Steemit Inc. So there really is no Steemit Inc engineering team currently.

  2. You say at least 30% will move to the new chain? What is that number based on?

  3. You are taking potentially false promises of Justin Sun as facts. At this point, I find it hard to believe JS is interested in contributing to Steem development, listing on exchanges, or onboarding, etc.

Hi Geekgirl,
Thanks for commenting.

  1. I do realize that and that is the reason I mentioned that the engineers will need time to look into the code to get used to it. (Because they will be coming probably from Tron)
  2. I estimated that at least the current US userbase, German and Canadian Userbase which are visible from the user % would move to the community-based chain. There should be of course more, but that is the reason I mentioned at least 30%. The reason why I am counting it that way is based on the reaction from those communities.
  3. The rational decision you can take is either to give up your money or invest in the product to increase the value. If Justin would give up on Steem then we will have no fork but also no money on our chain. Because we would not even have a weak Steemit Inc. nor developers or marketing. Justin could just decide to give up this project and send his stake to @null.

At this point, I find it hard to believe JS is interested in contributing to Steem development, listing on exchanges, or onboarding, etc.

Yes, understandable but that does not mean either it is a fact.

To your point #3, the most sincere and believable that Justin Sun has sounded to me was when he told witnesses during first chat after exchange takeover that (paraphrasing) he is "just a businessman, just wants to see the price of Steem raise high enough that he can sell his Steem and make a profit on his investment". That sounded like the truth to me. I don't believe he has any intention of further development of Steem beyond a pump and dump, made easier by a short powerdown which he will try to push through as soon as he is in control of the chain.

I appreciate your detailed analysis. We should hope for the best, but at the same time prepare for the worst.

Yes, I am also still hoping for the best, but the current situation do urge for preparation.

A nice write up, I really appreciated the source for the chart, I fount that to be pretty interesting link, Thank you.

You are welcome. There are different kinds of sources for this, but the attached link is showing the most countries without limiting it to a paywall. Also, Alexa and similarweb are sources for this kind of information.

Nah. What happens is that you get dumped on by Justin because he has no interest in a mangled chain with no users and no dapps following.

He will dump, your chain will die and all of us rest will fork not only Steemit. Inc stake but also all stake that supported his takeover.
The Koreans will lose everything.

Interesting view, but your insights are worthless.

Well, pull the trigger, see what happens. And who will run the 20 witnesses for your chain? Justin?
If the chain splits you will be the ones holding the bags.

Not a single soul that believes in decentralization will want a mangled chain, with no user base, with no dapps, with a tainted reputation controlled by 1 guy.
Ill bet anything he dumps, as he said he would, after he pushes a HF.

And what of the content? You really think anyone will care about your soup posts, because that is what your biggest accounts vote the most, lets be honest here for a second. Korean community is well known for its terrible content quality.

Im not saying do not use this stalemate for your benefit, im just telling you that what you wrote above is a very foolish assessment of things.

Because of our strong twitter push, the whole crypto world will KNOW which chain is which in case of a split.


  • Where does your base is coming from that the chain would not have any users?
  • Yes, Dapps is another part, as 3rd party tools would mainly move to the community chain. Business based Dapps, I am not sure.
  • If you have at least the slightest idea how economics work, you would know that it is not possible to dumb that amount of Steem on the market. All investors would immediately bank run when they see that much of quantity moving. Either it has to be done very slowly, or the other way increase the value and try to exit (as every startup would do). The last option would be to give up on Steem, but that would be also a game over sign for Steem, as we would be a chain without money, without development but at least decentralized.
  • Ok, you are insulting me and the Korean community member having terrible content quality. Understood.
  • You are aware that you are generalizing the people of a whole community with an argument that is not true?
  • You are free to think whatever it is about the text I wrote. That is your freedom. But to make it clear, I personally don't think it is foolish.
  • It is indeed true that Twitter is having an effect. But nobody is thinking about how sad it is that we have to shout out at Twitter to get heard.

I would like to forward the information that this is the last reply I will make to you as I honestly don't consider any of your feedback valuable for me enough to spend more time on it. You may be right, nobody knows, but the way how you try to argue is on a level I do not want to spend any second of my time.

  1. From the overwhelming support for decentralization here and on twitter. From all the witness votes for the community witnesses, from all the posts in favor of our witnesses. People might disagree on the Soft Fork but no one outside you thinks that Justin taking over the chain is in any way shape or form a good idea.

  2. Whats a business based dapp? A dapp with no users is vaporware.

  3. Yes, all investors would immediately bank run. Im glad you are aware of that. All of us would dump Justins Steem and move over to the community chain once its up and running. Justin bought tainted stake at a discount, he can dump and get most of it back. At this point he just wants out. Do you follow the insane tweets he makes on twitter and how openly he lies? And you will trust that guy .

  4. How is that insulting? The whole reason you dont support community witnesses is because your biggest whales like virus upvote literal junk to farm STEEM and the abuse fighters downvote them. If you guys didnt farm (not all of you) STEEM and get downvoted for it we wouldnt even have this conversation. All would be well in the land of STEEM and we would all be united in fighting this pestilence called Justin Sun. You guys not accepting that SOME PEOPLE DONT LIKE YOUR POSTS and because you cant take a downvote is what is threatening the survival of STEEM atm.

  5. Im not generalizing anything. Your whale track record and community account record is easily seen on chain. Its the guys with all the stake in your community that are making you look bad because of their voting patterns. Dont blame me for pointing that out. If they started upvoting quality content (not single pictures) that perception would quickly change.

  6. I know you dont think its foolish. Id assume you wouldnt have written it had you thought it was foolish.

  7. Its not sad having to go out on twitter. Going out on twitter is what we should have been doing from the get go, getting the word out. All of you should also be on twitter as well.
    Twitter is essential for crypto! We need influencers, we need the STEEM name to be recognized and we can use the power of our UNITED community to spread the word like we have been doing. Look how much we accomplished. The whole crypto community at large is supporting us over Justin Sun. We got more marketing out of this then in the last 4 years

Fair enough. This will remain here for anyone else to read it. Never has anyone convinced the other side of their position. The discussion is for others reading it to make their own mind up.
Good luck with whatever. Just so you know, if you play this stupidly (which i hope you wont) you screw us all over.

All of us would dump Justins Steem and move over to the community chain once its up and running.

Who is "all" and how do you want to know?

Everyone that supports community elected witnesses.
We are fighting against losing our independence and against centralization. It would be foolish to assume that those that fight against TRON will join TRON.
That would make 0 sense.

lordbutterfly analyses the whole situation quite well in my opinion

Way too aggressive. :(

How aggressive would you say is the right amount towards those that support complete centralization of the chain, that accept bribes, that support sock puppet witnesses?
Lol. I dont think im nearly aggressive enough.

I think the key issue or topic to many on Steem is Decentralization. Steem is all about Decentralization. It is not about that money and that is where JS is getting it wrong.

JS affirming that we should vote for his sock puppet witness, means he doesn't understand what decentralization is all about.

We might not like all out witnesses but they are there based on community consensus votes and when the community is not happy about anyone of them, they are voted out. And that is the beauty of decentralization.

JS is all about centralization and any thing he is involved with after any split is going to be centralized because he has the power.

And based on his initial post and other twits after buying over Steemit Inc, what makes you believe he has a future plan for Steem aside swapping it to Tron based token and converting the Dapps that follow him to Tron Dapps.

Have you read that he offered to sell his stake to theycallmedan at a discount?

The point I am trying to make is that JS likes power, is a crafty fellow based on his interviews and post that I have followed. And doesn't cut across to me as someone I can trust.

Some of the things he wants changed will cause great damage to the community and to see that his care is about settling his friends (the exchanges) and not the community says it all about what he wants.

I believe, if you are a true believer of decentralization then you'll see that most of your assumptions are not going to pan out the way you figure because it is not about the money, it is about decentralization. And it is not about the race either.

Thanks a lot for your input.

The traffic from India is quite interesting. With the crypto ban removed and exchanges coming back to life again there seems to be an exciting opportunity for Steem to gain deep footing here.

Yes, Indian traffic is indeed very interesting.

Here due to a resteem from @abitcoinskeptic. Thank you for writing up your perspective on this mess we find ourselves in here on our Steem blockchain @jayplayco. Seems pretty even-handed to me. As an investor first, I particularly appreciate you mentioning the costs associated with the Steem community starting from scratch, on a new blockchain. I think that is poorly understood and, as a direct result, likely underestimated.

On this ...

"Also the witnesses came to a conclusion that it is better to let a representative speak for all, then having everybody their individual sayings to be able to move forward."

... I have not heard of the witnesses selecting a representative to speak for them. Would you please let me know who this is or provide me a link to where you learned this?

Meanwhile, back at "the OK Corral", we have this:

@hkdev404 transfers in another "whale-sized" block of Steem - 2020-03-09 @ 05:53:45 (UTC)

By failing to lead with trust, the cost to everyone involved increased. In the ensuing see-saw battle back and forth, I guess we'll find out who wants it the most. By the only measure which counts ...

We will have to see what the outcomes are. Thanks for visiting and commenting.

The 2 groups have to talk with each other.
It is carzy to think that if justin sun removes his witnesses the community witnesses will HF his stake. Everyone is watching us in a crypto world so if they make it we are dead for sure.
Will be a nice decission and a win win option if JS remove his witnesses first and than they can talk whats next.
Or make a HF with the 10-10 witnesses so both sides can feel safe and they can start again to talk with each other.

Communication would be key. Thanks for stopping by.

I find your post very well thought through. I can understand the position of all the parties.
The biggest problem in my eyes that none of the parties know what they really want!

  • on one hand you see JS who is worried about his investment and doesn't know whether there is a future at all fot his implication in this project.
  • then we have a community that speaks with hundreds of voices. Many are ill informed or emotionals. Many have their own interests.

I believe that the first step for the parties would be to define what they really want. Without knowing this how can we negociate together?

Steem needs a protocol for decision making and this shouldn't be left to witnesses alone...

The KR community has a lot of stake here at steem so we just have to continue with talks with either side @jayplayco to make a win-win-win deal other than to result in burning our house down and no one wants it.

I guess nobody is interested in burning a house down, but hopefully, each side decides to keep the house intact.

thank you sharing

Thanks for visiting and reading!

@jayplayco. I think steemworld.org would be a better metric. I'm not sure what that looks like, but I think it would encompass a lot more users.

I appreciate that you tried to be objective, but your bias does come through. You seem to focus on mostly positive aspects for a Justin Sun owned blockchain and mostly negative for a non-justinsun owned blockchain. What are the negatives you see happening with the centralized blockchain and what are the positives you see with a decentralized blockchain?

Do you support a move of the Steem blockchain to tron as was announced by Tron after the purchase?Y2iXpRRkNSnseh3NuL6KUBitJTXrc5JycXrEqQQrQnfy8.jpeg