As everyone must know by now, hardfork21 is coming into effect (if accepted by the consensus witnesses) on the 27th of August, a little over three weeks away. One of the major drawcards of the proposal is that there will be 2.5 "free" downvotes available for use each day. If you don't know, an applied downvote takes value from a post and sends it back into the pool to where it will be spread to all other posts that attract votes.
I think it is handy to see this part of the proposal in terms of distribution and redistribution votes where there are:
- 10x available for distribution
- 2.5x available for redistribution
What this means is that if there was 100 in the pool and all active accounts used all of their votes, 100 would come out of the pool and then, 25 would go back into the pool to be redistributed on what still has positive value. Of course, not all who vote are going to use their stake to downvote - as is their right to do with the stake they own. However, the hope is of course that people will use whatever value they have to redistribute the inflation pool from accounts they believe do not deserve the reward so that it can be applied to those who do.
But, the drawcard of the 2.5x votes for redistribution isn't the power it has to incentivize the community to clean our own house rather than ignore the mess or complain about others not doing the job for us, it is the randomization of it.
For the last two years, Steem has become far to "safe" where it has been far too predictable where the stake is going to be applied as the community has been largely taken away from the process and people can chose for themselves if they want to be voted upon with bidbots. With no direct incentive to curb abuse, this has spiraled and made it incredibly safe for both sellers and buyers to operate.
There is very little risk.
Once there is the introduction of 2.5 redistribution votes, the ecosystem becomes much more dynamic in nature as there is the chances of attracting re-distributive votes increases. This means that while previously a vote buyer had a chance of loss through the way most of the bidbots operate by bid process, there is much more exposure to loss imposed by the community.
Remember that for the buyers, they are not getting a reward at all, they are buying Steem on a market much like an exchange.
This is important to remember as for those who believe that downvoting is "taking away rewards", because when it is on a paid vote, it actually isn't. It is, increasing the cost of Steem purchased. Buy a vote for 100 Steem and get a 110 back in 7 days means that the buyer paid about 0.9 Steem for Steem worth 1.0 - If that same account paid 100 Steem for a vote and then after the downvotes come in the payout is 90 Steem, they have paid 1.0 Steem for Steem worth 0.9.
What is interesting to think about at this point is that the profit they would have got (the 10 Steem) goes to the pool, which means everyone else benefits a little from what the buyer paid for - they are paying to increase the rewards of others. The seller of course won't wear the loss so it becomes, buy at your own risk.
How many people are willing to pay 10% above the market price for Steem?
Now, that is with a 10% loss, how many will continue to buy after a 20% loss? For those who are buying votes on what the community would consider undeserving of that level of reward, they would be in a continual process of Steem bleed - as long as people knock it into a loss.
Undeserving of that level of reward is another important factor. This depends on the price of Steem as a 100 dollar post today takes 400+ steem from the pool, but a 100 dollar post when Steem is valued at 5 dollars takes 20 Steem from the pool. However, people need to look at the post value as if there are no paid votes on it as it all comes out of the Reward pool. This means that the market place buyers use has an added complication over an exchange as it is publicly open to the community to adjust the price paid for the Steem after the purchase.
If you buy 100 Steem on an exchange like Bittrex or Binance for 25 dollars, the price you paid is 25 cents - end of story.
If you buy 100 Steem on a bidbot exchange for 25 dollars, it has to run the community gauntlet for 7 days before the final price is known. If it takes 5 dollars worth of redistribution, the price becomes 25 dollars for 80 Steem. However, if the post attracts distributive votes of 5 dollars, the post will have paid 25 cents for 100 Steem and attracted 20 Steem in rewards.
What this could mean in time is that there is far less desire to use the "bidbot Steem exchanges" for many people if their content doesn't hold up under the scrutiny of the community as they would be better off buying Steem on an exchange. Most likely, these people won't buy Steem at all. This is of course IF the community is active in their usage of the redistribution mechanism. This randomization and increase in "reward uncertainty" including the potential for loss on buys makes for a more dynamic space.
Then, what about taking the rewards that aren't paid for?
Rewards are given through the distribution vote so redistributing them is taking away reward, however the inflation pool is open to staked adjustment until the 7-day window closes. The Steem isn't yours until it is in your wallet is more than a silly saying, it is quite literal because the Steem from the inflation pool is unowned until it is allocated to an account.
The stake people hold has the right to distribute the inflation pool as reward but it comes with no guarantee that on the 7-day journey it will reach its destination - nor should there be as it has to run the same community gauntlet until ownership is applied. Stake distributes the pool, not claims the pool. Up until now, there has been no incentive for anyone to pay any attention to where the pool is being allocated which means, all kinds of poor behavior by staked and unstaked users has taken place largely unchecked.
Powered up Steem gives you a voice to allocate where you want. Others with powered up Steem have a voice to disagree.
This is the difficulty for most people to contend with though as most people take getting downvoted personally, which means that they are more likely to retaliate. Most do not understand that up until the 7-day payout the Steem is not theirs, and many fear that they will be targeted based on their opinions. Saying what you want is completely possible no matter how many downvotes are applied - earning might not be possible on what you say.
While there are exceptions, most people don't get downvoted significantly ever in their time on the platform and often those who do, have decided to poke bears and then claim to be victims when the bears poke back. But, if everyone is using there 2.5x redistribution votes a day consistently, in short order the personal nature of it drops away and it becomes a normal part of the process and perhaps even, a greater level of maturity could develop. Though I am not holding my breath on that.
The last thing to consider is:
This is on the Steem token layer.
SCOT tribes are already here and SMTs and communities are on the near horizon and these tokenized layers work on the distribution mechanisms they choose. I believe that eventually, content contributors will largely operate on layers above Steem and Steem itself becomes an investment layer. What that means is that the "reward pool" becomes the, "investment pool" and where it is allocated will run the investment community gauntlet for where it is best utilized. This could mean it goes to marketing, development or distribution to holders of Steem like a dividend for securing the platforms by keeping their Steem staked.
I have no idea what people will actually do although I can guess that the taboo of downvotes will be too strong and they will continue on doing very little to keep the Steem distribution streets clear of muck. However, perhaps if some of the larger accounts lead the way, more will follow suit and join in. I do think though that if people actually used them well regardless of what others did, the place would be healthier - people talk about freedom, and then look for someone to take the lead.
@theycallmedan wrote a post yesterday about making downvotes less personal and I agree, however people on the internet take everything and anything as if it is a personal attack on their very being. We need to grow up one day though. While absent over the last couple days mostly, I have seen @acidyo stepping up early to join the redistribution curation games to nullify self voters and this is a good example of stake having the right to distribute the pool, not claim it.
I have only been here for a couple hardforks but I am looking forward to this one the most as it is the one that brings the community much more heavily back into the equation and reintroduces higher randomization of outcomes -
both of which are sorely needed.
[ a Steem original ]