In this post, wanted to brainstorm the idea of simplifying Steem staking mechanism, if not Steem then could be adopted into some Smart Media Tokens or ESTM.
Right now, we have STEEM, SBD and STEEM POWER and with introduction of SMTs, there will be dozen more tokens, each might have their own multiple tokens (power token, liquid token and stable token).
More complexity for users... Of course, tokenizing web is unavoidable and many users already have many different tokens but what if we can simplify staking or core of Steem.
I was thinking of the idea of having one liquid token which can be used as an influence as well as stay liquid.
Many have argued in a past that we need stable tokens. Market have shown interest in this area as well, year 2019 with creation of many stable tokens. It helps to avoid fluctuations during bear/bull markets also gives user much more confidence holding stable token, stable utility/use. Most of them does stay stable compare to other forms token. In my opinion, when token mature enough, it won't need stable token. Liquid token will be much more stable and slower to move upward and downward when it reaches certain point.
When does token mature, where is that certain point?! That is another question which I don't have answer for and from looks of it even BTC is not mature enough yet. But until maturity is achieved user can always use other stable coins or hold plain old fiat/digital cash.
For almost a year, there wasn't any SBD printed and network still continue to function as normal and existing SBD didn't get any traction in terms of utility or use. So one can argue removing SBD will not be big issue and it will help simplifying system.
This is really controversial subject that has been discussed since the start of Steem by multiple respected community members. Pros and cons are weighted in different directions. We have even tried different lockup schedule, new proposal being discussed, which seem promising.
What best utility STEEM POWER gives?
Most agree that major utilities are: a) it gives extra security for user in case of hack, b) influence for allocation of reward pool.
BTC, ETH many tokens doesn't require to be locked in to be safe. Security is built-in in user's behavior, so user is careful to take care of their own tokens. Of course, people learn lessons hard way and same is happening with Steem users as well. Influence on reward allocation, this can be improved and it is working quite good with recent EIP and doesn't require tokens to be locked, imho. So one can argue this complexity is also unnecessary. How to improve influence on network without token lockup?
Influence on network can be achieved in many ways with only 1 token. And it is simpler to understand and explain, onboard users without complexity and it also increases liquidity on market for single token, it attracts more users because user can get in and out instantly.
Let's imagine scenario, where we have only one token STEEM. Numbers below are just examples...
User transfers in or earns 3000 STEEM
Liquid token matures daily upto 30 days or at once after 30 days.
If user transfers out all or part of STEEM, it would still continue to calculate effective influence and eventually decay.
This would allow user to stay liquid but influence would still be core of the Steem that decay and mature depending on liquid token moving average balance.
Simplification would, not only improve user experience and understanding of economics in much simpler way, unified utility, etc. but also create demand for single token.
Technically, making this type of change on Steem probably will require quite a lot of refactoring.
So let's brainstorm this for now and see if it is any better or viable. Curious to know what you think, leave a comment...
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Nice logical approach here, I can really see the argument for getting rid of SBDs now that we've functioned without them for so long. Might be a bit of a shock to short term Steem price converting them all though.
While I like your thinking behind the automatic 'powering up without powering up' option as it's simple, I don't think it's necessary - I think maybe changing the terms like @therealwolf and others have suggested to 'staking' makes more sense, but I don't really conceive of staked steem (let's start calling it that!) as a different type of token to liquid steem.
But the idea of fewer tokens/ less complexity is definitely something that I think would help popularise Steem.
I guess communities can make things as complex as they like!
Your proposal is not simpler then the current state of affairs, one could argue that it has more cognitive load on end-users. I think that you are just expressing your desire to be able to sell quickly when the market goes bullish.
It is my opinion that DPOS governance works "better" when staking is used as the key that opens the voting for block-producers. Having a totally liquid token opens up some avenues for malicious witness voting (especially when the market cap is low).
This is especially true with steem since staking also gives you the ability to distribute the inflation.
What would be the benefit of your proposal? Can you quantify it or measure it's effects? Is their empirical data that sugests that it would have a positive influence on the price or token distribution?
I still like SBD and I think it can be pegged again along with SMT's it will be the basis of our internal arbitrage can be done and make trading within the steem ecosystem with fee-less transactions quite popular.
What you pitch is a very interesting concept I think you will get a lot of resistance from advocates of the system thinking that people would just want to earn and dump which will for sure be the case and abusers could misuse it for short term gains but I don't think it would be all that bad. I think if the system can dynamically/real-time allocate influence as well as interest on your stake I think it could be a cool option.
As for the whole of steem being this way, not so sure, people are quite tied to the system. I'd say this would be more of a forked/side-chain tribe style where those who prefer this method can use it
Giving influence to liquid token breaks Steem blockchain's security. e.g. exchanges can manipulate witness votes. (I might be wrong but I think exchanges hold more than 70% of liquid STEEM)
I'm somewhat neutral regarding SBD. I do see its potential, but I wouldn't mind if it were to be removed.
Also, I'm wondering whether this would result in a huge pump and a mutation of a "stable coin" to a value storage, as removing SBD inflation, would craft a deflationary currency. (conversion from SBD to STEEM has to be supported)
My main pain-point with Steempower, is the underlying VESTS currency. It creates accounting overhead (powerdown/powerup is a conversion of currency = STEEM <> VESTS), which is absolutely unnecessary.
The basic idea with VESTS, if I'm correct, was it, to have a currency similar to how a startup's vesting shares. This also explains the previous 2 year lockup period.
Ever since the reduction of 2 years to 13 weeks, it's quite clear that this experiment didn't work out. And now with talks around reducing it even further, or making it dynamic, we should question whether we should keep that logic around.
Looking forward to more comments around this, but I'm intrigued. Having only one token would simplify things a lot, but of course, also create quite a lot of refactoring work and potential bugs.
"Removing" STEEM Power is the easiest thing to do. It's just a matter of rewording it, as quite a few people remarked. We just call it 'staked STEEM'.
Unless some major set backs would come up from removing SBD, I'm in favor. The problem I can think of is what do you do with SBD on exchanges? People would need to transfer that to Steem wallets (if they have them) and exchanges would need to delist SBD. I doubt the conversion can take place at exchanges.
I'm not sure I understood exactly from your post if you said maturity of liquid STEEM only affects voting for reward pool or witnesses and STEEM.DAO as well. If it's just the first, I'm not ok with it, if they are both, that's something that can be a solution. Term for full maturity can be talked some more. I'm in favor of a longer term.
We also have two other things to think about: do short term holders of the liquid STEEM care about the long term future of the blockchain? Some do, I'm sure of that, but will they be the majority? Don't get me wrong, I believe STEEM needs a higher liquidity. It also needs protection from predators.
The second question: What do we do with interest? Keep it as is? Remove it? You said simpler, so I guess you are not in favor of progressive interest, based on holding time (maybe not necessarily locked in?).
Actually a third question: what do we do with the Savings account? Do we remove it? Do we revamp it to something truly useful?
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I definitely think you are on the right path here with simplifying the STEEM tokens, but I feel that its almost impossible to standardize one token for the entire community without a major upheaval. I do agree that the STEEM tokens would benefit greatly from simplification and would allow for easier and more common use.
Wow! This is really awesome, thanks for the comprehensive lecture. @good-karma It's really a great knowledge.
On one hand, tokenizing web (I just heard this term) provides convenience in one-time transactions with the concept of one for all and all for one. But on the other hand, I see too many tokens that have no value, making the web look like a receiving engine.
I agree more with quality than quantity. Better to have a limited number of tokens but have value in the market, than we collect garbage and process it into compost.
I can understand how people are confused into thinking it's a separate token.
It's "Activated Steem"
Its unfortunate that SBD doesn't normally keep its peg.
I like the liquid steem or one currency principle. The multiple coin create confusion to new user to understand the things. I very much like this type of principle. But now the question is, can this will be possible at steem blockchain / community?
If one coin with liquid option is available that is great idea for everyone in long run. It require out of box thinking.
Where does this Top 20 Witness stand on Tron possession of Steemit Inc.?