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It doesn't put potential abusers at a disadvantage.

yes it does

Of course it does. They are more likely to be downvoted. Even if it isn't 100% guaranteed it pushes their incentives toward better (less likely to be downvoted) behavior

True but under linear reward, the rewards returned would represent a growing % of the reward pool with ever-growing incentive to defect.

Under crowdsourced flags, this isn't so.

Crowd-sourced? Compared to what?

I'M really not sure I understood their crowdsource concept correctly but if so, flags would have a separate pool and would be non-linear.

I came up with the idea of independent flagging pool, Here's something I posted about it.

https://steemit.com/steem/@transisto/separate-downvoting-power-pool-concept-visualized

There is only one user involved when down-voting so there is no "crowd" per se.