Burn Credits: What if you were rewarded for burning tokens?

in #steemleolast year (edited)

BurnCredits.png

Before I even go into explaining this idea let me say I don't think this would work with Steem proper, but I think it would make for an interesting SMT or SE Token.

Anyway, I had an idea pop into my head. It started out with the thought, "What if you could power up permanently?" So there was another section to your wallet, I'll just use Steem as an example to make the concept easier to understand, but you have your liquid Steem, your Steem power, your savings, your SBD, then one more section, I eventually called "Burn Credits". This would make these tokens similar to the state of being powered up, only they can never be powered down.

For this you'd get extra perks. So Burn Credits would earn twice as much inflation, which would be earned into your regular SP, and would allow you to distribute twice as much from the reward pool. So to simplify the math, if 1 Steem gave you a .001 upvote, 1 BC would give you .002 upvote. This would give you an incentive to burn tokens because that's effectively what you'd be doing, just instead of sending them to @null, you'd be sending them to a forever locked part of your wallet, or maybe you do send them to @null and you get transferred a non-transferrable secondary token, whatever. I'm thinking you'd set up your inflation with another pool twice as big as your reward pool, then another one twice as big as your stakeholder pool that it would draw from.
-edit
@khaleelkazi has better ideas for implementation in the comments, check that out.

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I wonder how many people would use that if it were a feature? I wonder if it's even possible. Would you use it? I figure I know for a fact that some people would use it since some people burn tokens with no real benefit except a macro benefit to the overall system. If you could immediately increase your influence, but at the cost of any immediate profit would you?

I think I would for a least a portion of my stake, maybe 20-25% I think this would allow one more level of street cred to people that want to show their dedication to a project or token. For airdrops of a new token it would be great too because the founding team and all initial airdrop recipients could all be dropped Burn Credits instead of powered up token. This solves the early dumping problem.

What say you all? Want to see this in the next Steem Engine Hardfork? Added as a feature to SMT's? Let me know in the comments!

See you in the next post!

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I like this idea a lot. As far as implementing it goes, it's actually pretty easy to do with the current technology/feature set of an SE token. It should also be a similar (and relatively easy process) to do this with any SMT token.

If I were to do it with LEO -- for example -- I would just need to create a script that automatically tracked LEO being sent to null and the account that did the send transaction. From there, I just need to decide how to track & distribute inflation to "burn credit hodlers". 3 ways that come to mind:

  1. Do a simple airdrop script that checks the amount of LEO that was burned by each user and then distribute new inflation to those users each day/week, etc.
  2. Issue a new token in place of burn credits that have proof of stake rewards and auto divert x % of the inflation pool automatically
  3. Issue mining tokens (which many tribes already have setup) to serve as the "burn credit exchange" which essentially do the same thing as #2

I'm sure there are a dozen other ways to do it too. It's a cool idea. Something else that came to my mind when I was reading this was the audible listening credits -- I pay Amazon ~$25 a month or something along those lines and am issued 2 audio book credits in exchange which I can use at a later date to purchase 2 audiobooks.

A tribe/token could easily do that as well with people who burn their token and issue credits to be used at a later date for some form of value -- a product, service, upvote, etc.

Very cool, yea I don't know much about the technical implementation but that's cool that it's possible now without any additional development. I wonder how many people would do it if you did this to LEO? As I mentioned, I definitely would for at least a percentage.

An Amazon credit sort of system would be interesting too. I think both ideas just make for a way for token creators and holders to align incentives.

I like the idea "on paper," if there were a way to execute it in such a way that system abuse were minimized. Ideally, it would also be structured in such a way that becoming such a "permanent benefactor" would specifically offer perks for activities that included curation, commenting and community building... steer wide and clear of looking attractive to those who immediately think "How can I automate this to harvest as much as possible?"

I think it would also be nice if there were a way for the community/SMT to be able to "spread" these Burn Tokens to everyone in Steem world, regardless of whether or not they actually are current token holders. For example, I have this CCC curation account to help creative content... but it would be nice if I could also reward creative posts that do NOT use the creativecoin tag, and still have it mean something... perhaps along the lines of some of the "tipping" tokens like Tipu, Beer, Shade and so on.

Intriguing idea, all in all!

=^..^=

Great insight, I've rethought this idea with an updated version because of the "permanent benefactor" problem you mentioned. Will probably do a post about it soon.

This is an interesting concept. It is one that I have been toying around with and trying to figure out ways to get it to work and incentivize burning as well.

Yea I think it would be a good way to get the average user to burn tokens, which at scale would have a huge impact.

It would have to not allow delegations either. And vote trading would get a massive buff.

As you said, bad idea for Steem, interesting for token.

Ahh, that's true, also wouldn't work for witness voting or proposal voting now that you mention it, so yea as I mentioned, wouldn't work for Steem. I wonder though if it would increase vote trading, because you have to make a pretty big sacrifice for it to be worth it.

My thinking is that after a permanent conversion you cannot get out. People who are stuck have no incentive to behave.

I think the incentive to behave would be the exact thing that you're stuck. If you make a bad name for yourself and the community turns on you, as long as you're anonymous you can power down and create an alt, but if you had funds permanently powered up, if you get blacklisted you doom that account to only being able to earn inflation and curation rewards.

You'd have to take a huge amount of the token totally off the table for only inflation and curation to be of any benefit and I think in that case getting any sort of ROI would be impossible or improbable at least.

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Sounds like a very interesting idea! It's probably the best incentive I've heard to burn coins. Something 'permanent' gained for burning.

Honestly, I wish there was a way to burn most of the Steem out there. Just not mine. lol!

This is very interesting indeed.

At first read I believed giving BC double vote "worth" would create more inflation, but on second thought I realized the reward pool is the same, the vote influence just shifts from the token towards BC.

Other non-token and non-inflationary related perks as @khaleelkazi mentioned could be really cool. Like, for instance, the new BC would offer reward points which can only be exchanged for good or services (t-shirts, mugs, bags, advertising etc.)

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