This Proposal Is An Attack On SBD... Sound The Alarm!
Do you enjoy using SBD? Do you appreciate having a stable currency?
I know I do! In fact, SBD was one of the reasons that I enjoyed using the platform from the very beginning. In a very real way, SBD was the very thing which gave me faith in the platform. I didn't feel like I had to rush to cash out my earnings and put them somewhere safe. With the confidence that SBD instilled in me, I was able to settle in and consider my involvement worthwhile in the long term.
I even posted about it not long after joining.
I am quite sure that SBD helps to provide the conditions that will enable robust growth of the platform when the time comes. Users like me, with years of experience using bitcoin, can appreciate the insulation from volatility. And it will be a great advantage when bringing new users from outside of crypto, that we don't force them to confront the daunting prospect of wild swings in the real value of their accounts.
Growth of social platforms relies at least as much on user retention as it does on acquisition. Driving away potential users who aren't prepared to assume a significant amount of risk sabotages our potential to grow and increase the value of the platform.
And speaking of value... SBD helps retain the value of the platform. In the absence of SBD, the only way for users to realize the value of their account is to sell their STEEM on an exchange for fiat or bitcoin. The price of STEEM faces downward pressure when this occurs. Alternatively, if a user has SBD that they would like to trade for an external currency, the STEEM price is hardly impacted by the transaction. SBD allows users to realize the value of their Steem holdings without negatively impacting the market cap of the platform. That's no small thing.
Witnesses have been working diligently for months to ensure the stability of SBD. We've done so under the assumption that SBD is critical to the success of the platform.
In fact, one of the most moving articulations of the vision of Steemit is Dan's plan for world domination.
Under no uncertain terms, the establishment of a stable currency was a prerequisite for the other revolutionary goals of the platform.
In light of that, I was alarmed to learn about a recent suggestion to remove the option for Steemit posters to select a liquid payout.
The proposal suggests limiting the options of Steemit posters to receiving either entirely SP or no payout at all.
If the proposal were to go through, authors would receive no liquid post rewards.
Currently, authors receive liquid rewards as a combination of SBD and liquid STEEM, determined by the debt load. The debt load is largely a function of the market price of STEEM. In order to prevent the debt load from climbing too high, SBD rewards are throttled when the debt ratio increases (typically due to a falling STEEM price).
Under the proposal, users of steemit.com will no longer receive liquid rewards at all. If this were to be adopted, no new SBD would be produced aside from interest payments on existing balances.
In order to establish SBD as a viable currency, it must be created and distributed widely across the platform. Halting SBD production regardless of the debt load is an obvious step towards eliminating SBD entirely. The existing supply will soon become concentrated in too few hands to function as a currency.
The proposal is deeply flawed even without considering the existential risk it poses to SBD. It doesn't have to be viewed in the context of a larger strategy of eliminating SBD. However, I feel that is the most alarming aspect of the issue.
I would encourage everyone to view the proposal, and examine the rationale that Val provides (citing Dan). Read through the concerns that have already been raised in response... And since the issue has been tagged "feedback-requested", feel free to add your own remarks... Hopefully in support of SBD! ;)
So I don't disagree with the theme of your post (keeping SBD) but I do want to point out a small technicality.
Technically under the GitHub proposal, users who posted via other interfaces besides Steemit (like Busy.com, or the command line) would still generate new SBD and liquid rewards. The issue is only proposing to change the rewards for posts created via the Steemit.com interface.
There is still the "slipperly slope" argument, but at least as far as what is in the actual GitHub proposal, it is not talking about removing liquid rewards entirely.
The post points out that "it must be created and distributed widely across the platform" [emphasis in original]
The proposal threatens that, to the extent that alternate interfaces are not widely enough used, which is at this point extremely uncertain (no widely used alternate interfaces exist at all).
I don't disagree with that at all. I was just pointing out a technicality in wording. The post said that the proposal would cause "no new SBD would be produced aside from interest payments on existing balances". This is technically not correct, at least based on what is being discussed in the specific GitHub issue that is being referred to.
Thats true. I was trying not to get into the weeds. The vast majority of posts are made through steemit.com anyway, and will continue to be for the foreseeable future.
Agreed, although that could change with Busy. A change like this could actually (intentionally or unintentionally) speed up the migration to other platforms too. I'm not saying it is a good thing, but I suspect if users could get liquid rewards on some other site (and not on Steemit), a lot of them would post there rather than here.
The implications for SBD still remain.
I would like to see more businesses start growing from steemit and to do that I feel it is best that SBD continue to be distributed!
I don't see why 50% of the rewards should be powered up. Can somebody justify it for me?
I like the idea of the users becoming stakeholders, but there's currently nothing to make me want to stay powered up, and for that reason forcing power ups is only delaying payment of liquid rewards by 13 weeks.
Some people will forever power down and whether those people get their liquid rewards today or in 13 weeks makes very little difference. Powering up should be incentivised, not enforced.
(I'm not convinced the aim is to get rid of SBD)
I think the most important reason is to make the SBD debt level of blockchain to go lower. So probably this would be only a temporary solution until the level is again more sustainable.
It was stated in the github issue discussion that part of the reason was to support the STEEM price by shifting more rewards to power up. I agree with you that with 13 week power down, this is simply annoying and has negligible real effect, if not counterproductive.
I'd personally like to see no required power up on author rewards. Set the default at the current 50% or 20% or something and let people change this as an account setting according to their own preferences. Users and authors should not be pressured or forced to be investors if they don't want to be.
we need SBD to stay!
SteemPoll results suggest that majority prefer using SBD daily.
Check out this post or this one for outcome!
I have barely begun to post anything here due to my full-time involvement in other cash paying projects, but I have always planned to turn 50% of my payouts into Steem and 50% into SP, then convert all Steem into SBD for security. Without SBD I would convert Steem into Bitcoin and that into USDT (Tether) for the same purpose. But not everyone would know how nor be willing to take these extra steps.
Therefore, my opinion is to keep SBD to simplify securing payouts.
SBD are great, why people want to get rid of it as feature is beyond my understanding.
Voting up for bringing attention to an interesting discussion, but it's an early stage discussion on an early stage platform. The world domination strategy was certainly something I was most excited about, but until the platform grows and there's the potential to create a viable marketplace for SBD, it's just kind of a tease right now. I use it a bit to play the internal market, but that's basically it. I haven't powered down once in 6 months because I believe in the long term success of this platform. I like a liquid token, but with 7 day power down, it's not really that huge of a deal anymore. I want SBD and liquid STEEM, but I also don't think this would be the end of the world if they did want to explore it as an option. Again, it's early days here. I'd rather they tinker with stuff now before things get so big that consensus would be very difficult to obtain for any major changes (see Bitcoin).
Just to be clear... It seems like you aren't really coming down firmly on either side of this. You just want the team to be free to experiment with the platform? That's not unreasonable. But to the extent that I can influence the direction of the platform, I feel an obligation to speak out against developments that I consider harmful.
Ah, don't kid me. You live, breathe, and adore the drama. :)
This is a github ticket for discussion, not even a post by Dan or the Steemitblog for serious consideration. It's a discussion. "Sounding the alarm!" every time someone opens up a discussion stifles good discussion and exploration of new ideas.
I want them (and everyone else) to be absolutely free to discuss ideas. As to actual implemented code changes, if the witnesses agree, then yes. I'd much rather they experiment now and learn things early on then not experiment and be forced into a corner later when it's too hard to fix them (again, see Bitcoin).
I'm here for the long term. Short term adjustments while in beta don't concern me and I see them (and the willingness to try them) as good and healthy.
You feel obligated to sound alarms. Maybe try a more even, conversational tone and consider there may be new ideas you can learn from that you don't currently agree with. You've had to apologize in the past. Taking a more neutral tone and approach not only opens you to obtaining new information, but also to having fewer reasons to apologize.
Again, I voted this up because it's a good discussion to have. I don't think any alarm needs to be sounded though.
I don't think that is fair. There is ambivalence towards the very existence of SBD that extends to the highest levels of the dev team and steemit, inc. The tone of this post is entirely appropriate. Anyone in the community who cherishes SBD should be encouraged to make it known.
The problem with threatening SBD now is precisely that it may become too hard to fix that error later.
Replying to your earlier comment:
This is a classic chicken and egg problem. Such a marketplace will never be developed on the premise of serving a customer base that does not exist. Since paying SBD out to users even if they are just going to cash it in is basically harmless and nearly costless as described in the post (while developing a marketplace with no customers is neither), this is a case where the egg (paying out SBD to users) must come before the chicken (marketplace and other commerce involving users)
I agree, and it's why I'm a fan of the SBD (though a little selfishly sad the interest rate has gone down, though I do get the reasoning behind it).
As to it being too hard to fix, I don't know about that. If a marketplace with STEEM (as an example) didn't work out, I'm not sure why they wouldn't be able to re-introduce SBD? I'm talking about something I have very little experience on here, and I know you have been very active in supporting the peg. If you feel even discussing this is reason to raise an "alarm" then I'm misunderstanding something.
Debt always creates some risk. Not too long ago @bacchist was freaking out (from perspective) on the amount of debt being too high and encouraging people to burn their SBD and/or go full SP on payouts.
At some point it seems to me like every change (even a discussion of a change) creates dramatic alarms. That's too emotionally charged for my tastes. Discussing ideas is a good thing, and we should encourage ideas and changes while the platform is small, and mistakes are easily fixable. If we get things wrong, it won't matter anyway because the platform won't grow to the point where enough people really care.
Either way, thanks for chiming in, @smooth. As I've said before, I greatly appreciate the work you've done to make the SBD peg work.
Because it would be much farther along with more competing interests and justifiable reasons to not want to make major changes. That is the nature of these systems as they mature, as you pointed out in your comment above. Keeping an undefined "beta" label on it indefinitely does not resolve that issue.
Take that in context along with "sound the alarm!"
That said, what was the debt ratio when that was happening? I suspect a lot higher, in which case freaking out may have been somewhat reasonable. We've learned a lot about how to manage the risks, including taking action well before the debt level reaches the previous high levels (as was not done previously), and I'm convinced now that it is quite manageable. Yes not zero cost or risk as you correctly pointed out, but quite low.
I agree about the tone of this post (especially the title) being too dramatic for reasonable discussion. Stuff like this tends to polarize people which is not productive. However, the removal of a liquid post payout option on steemit.com could potentially happen sooner than you're thinking without opposing feedback.
I am missing something? Isn't the powerdown period 13 weeks not seven days?
You can get a portion of your SP holdings as a liquid token (1, 13th to be exact) in 7 days.
I understand that. Before you could get 104 weekly "payments". and now it's 13. On your comment it sounds like you can power down in seven days.
This proposal will motivate users to be in permanent powerdown mode in case anyone needs to access their funds for an emergency.
I am guessing it will have the opposite effect of it's intention.
I see people being in a permanent power down mode to access their money. Right now, the money is the reason to post on Steemit.
In the future, that could change, and perhaps will change with the new communities feature, but I could see this have a negative effect on the community.
Even if the reasoning is sound.
The proposal puts small stakeholders at a disadvantage. You are only able to power down if you have 10x the account creation fee if I recall corrrectly. In the event of a price crash large stakeholders in powerdown mode would be able to cash out leaving the little guys holding the bag.
If Steemit.com wants to give the appearance of a Ponzi by locking 100% of the author rewards by all means. Please remember that perception goes a long way.
Talk about a shortsighted proposal...ugh!
The minimum balance for power down is denominated in SP or VESTs... The market price is irrelevant. If the price crashes, it won't prevent anybody from powering down if they would otherwise be able.
This isn't entirely accurate as the minimum power down balance is based on the current minimum account balance, not the minimum when the account was created. When the price crashes and the minimum expressed in STEEM is increased as a result, it becomes even harder for existing users to power down.
I see... That could adversely affect users. I'm not sure why the fee paid at account creation isn't the basis of that calculation.
There is no logical reason, that is just how it is implemented.
I never mentioned the market price. The account creation fee is denominated in Steem. When I joined in July it was 10 SP and now it's 30 last time I saw. Some witnesses have it set as high as 50.
That is a function of the market price of STEEM. The intent of witnesses who have raised it is to ensure that the "get $X.XX of Steem Power" offer to new users is at least reasonably attractive, and not just a few cents.
It's not something that has come up for me, since I joined back in July... I was under the impression that the power down minimum was based on a multiple of the amount the particular account was seeded with. If it is pegged to the witness parameter, I can see how that would be an issue for very small accounts...
I don't see it as something that would affect most users, though.
It is pegged to the witness parameter.
What is the current SP balance you need to initiate a power down?
It is around 300 SP