Single token, simplification?!
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.
Stable token
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.
Power token
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?
Liquid token
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.
- Daily:
- On Day 1, effective influence would be 100 STEEM increase/mature daily.
- On Day 30, effective influence would be 3000 STEEM.
- Instant:
- After 30 days token would reach maturity and influence would be 3000 STEEM right away. This has some complication for RC or user experience. Not sure would improve anything.
- Daily:
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!
I guess I'm already biased due to my years on Steem, but I like the term
Steempower. However, it does create overhead and unneeded complexity.Many crypto people are already familiar with the term
staking. And it would be easier for outside people looking into Steem to understand thatSteempoweris just referring to the token in a staked state.Besides that, I also don't think it makes much sense to keep VESTS around. Steem Engine made the correct move, by creating a single token, with different states (staked, delegated, idle).
Personally, I'm very much in favor of simplifying things!
My only concern is backwards compatibility in regards to SMTs. Or in other words: we have to make sure that SMTs created before these potential changes, are not getting deprecated by it. But that's something @vandeberg most likely is able to answer.
I don't think it would require much rework in terms of SMTs, because it could simply be started with 13 weeks matured liquid STEEM turns into vesting_shares. Example, I choose in post was 30 days but could very well be 13 weeks.
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Every time I here VESTs talked about I just get this picture of Dan Larimer and other math fans with satisfied grins on their faces.
Great for mathemeticians, nonsense to the other 99.9% of the population.
I take your point about knock on effects of changing anything!
For me this is a clear user interface problem. The general user shouldn't have to care about vests, or whether steempower and staked steem are different. Just display these things the right way in their wallets and no one will care and there are no issues with compatibility either.
VESTS is there so rewarding SP via inflation can be done with a single change of value instead of adding differing values to ALL accounts that has SP according to the amount of SP on each account. I'm sure you are aware how it works.
If you want to abolish VESTS, do you have an alternative in mind that at least as efficient? Or do you also want to abolish rewarding SP via inflation altogether?
I believe regular users never need to care about VESTS anyway, the same way they never need to care about rshares. I believe VESTS is worth keeping.
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?
It is not a proposal. It is brainstorming idea of improving staking (not removing) without locking up token.
He's not proposing a totally liquid token, since you need a month to power up. You cannot add and remove influence instantly.
And removing the SBD and changing steempower to staking clearly reduces the cognitive load.
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
Note, Influence is not instant even though power is liquid...
PS. SBD could indeed be SMT. I think we will see stable tokens on SMT regardless, for different fiat currencies or different DAI, etc.
SBD technically kind of already a SMT. Stable tokens will definitely pop up as SMTs but what makes SBD different is that it's on-chain and non-custodial. We can't make SMT that works like DAI on Steem because Steem doesn't support custom smart contract on the base layer, we can only make custodial stablecoin like Tether with SMT specification as written on the white paper let alone the v1 coming next fork which doesn't have the full specification yet. However, we can push a change to make SBD work like DAI (or other on-chain non-custodial stable tokens) if we want to keep it around at all.
One of the reason why some people like staked STEEM (SP) is because they know when their account is compromised they won't lose all their crypto immediately so if you propose to implement it this way they won't agree to it.
The instant dumping is another issue, this change will lure people that just want to leech value from the network (existing or new users) because earning the "free money" requires absolutely zero commitment to the source of the "free money". "I don't think it would be all that bad" is not a good enough justification to just ignore the potential threat.
Yes, the proposed change as written on the original post is better off implemented as a completely separate Steem fork (like GOLOS or WS) or tribe. It just bears to much risk to implement it for Steem.
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)
That's really great point 👍 They could still manipulate if they wanted though, no?!
No, they would have to stake their Steem to get influence over the network.
Yes but 13 weeks is not that big of issue if they really want to influence Steem network consensus.
If you think so, then wouldn't it make more sense to want to extend the downpower time in order to increase the resiliency of the network?
13 weeks lockup is way too risky for an exchange to stake customer's fund to influence a single network in a market as volatile as crypto.
Wanting liquid STEEM having the same influence as the ones staked for long is not a good idea. Look at EOS, 3 days is way too short, liquid is suicide.
There is misunderstanding, influence is not liquid but token is.
I don't agree with this. Exchanges could keep a modest percentage liquid to handle withdraws and start a power down if the liquid pool runs low. In the event that the liquid pool is exhausted they can disable withdraws temporarily and/or, if there is a mature lending market, borrow liquid STEEM to make payouts and then repay the loan from the power down. More likely is just disabling withdraws, which they already do (sometimes for months or even years).
I think the main reason they don't do it is simply the low value of STEEM and the extra work it would take to implement. The payoff isn't there, but it would be at a (sustained) higher price.
Some exchanges already do staking with no loss of liquidity to the customer on coins with a few weeks of unstake time. And that's a few weeks to get any coins unstaked, not one week to get a portion as with Steem.
So it's better to have custom stake period with governance influence scaling with said period, right? Exchanges being a factor is why I am leaning more to forcing the entity to determine how long they wish to commit before they stake as opposed to let them mature as long as the tokens are still staked. For example, if an exchange wants 2-year-stake-influence they need to determine upfront if they will never need the tokens for 2 years and get punished if they actually will need it compared to just stake and if they actually don't need the tokens they gain massive influence or if not they can unstake with no consequence.
I can't say what is better. But if people want to keep exchanges from voting, I don't think the existing 13 weeks (avg 7 weeks) will ultimately do that. Maybe a much longer period would work. Maybe nothing would work and you have to accept that whoever holds the keys gets to vote, ultimately.
Being forced to disable withdrawal and/or to take loan already kind of working as a consequence in my opinion. Is that severe enough to achieve better governance? I don't know.
That aside, a way more interesting "topic" is up for discussion now. Let's see where it develops.
Even that would only ever happen if they burned through their liquid slice and didn't replenish it fast enough from the initial power down installments, which is actually quite unlikely.
It is possible to get this information historically from the Steem blockchain since most of the exchange balances are public. For the most part they have only ever increased, meaning there would never have been a liquidity shortage with even a tiny liquid portion.
Is there any other known exchange currently voting for witnesses on Steem aside from @blocktrades?
I don't think so but I'm not 100% sure. In my opinion, mostly they ignore it because the value is low (and we're lucky when they keep their wallet updated and online), but now that they all have people whose job it is to figure out how to earn income with customer deposits, a rise in value would change the situation.
What are the coins you mention that has few weeks unstake time? I believe your statement is true. I just want to know what other coins has long stake periods.
Tezos has 2 weeks. Cosmos has 3 weeks. There are many others of course but those are the big ones I know about.
Decred has 28 days and here is another exchange offering staking without any lock up. They do disclose that there will be a withdrawal queue and you may have to wait to withdraw, so we will have to see how it works out, but I would be surprised if there were ever a long waiting period on the queue (if any at all), and certainly not 28 days.
https://www.kucoin.com/news/en-decred-soft-staking-official-rules
Thank you for taking time to bring these to me.
"Staking" on exchanges really strikes me as legacy financial system with crypto mask.
That aside, we can also see this as the customer "delegating" their stake to exchanges in the first place. "Not your keys, not your coins".
I agree with you but its the reality of the environment.
We could easily make it so that exchange accounts can't participate in influence votes (witness and SPS). There is already a fork where this is done to @steemit account, but it is not used now.
Let's do the same for Binance and Bittrex and the others. The maturity model is good enough to prevent manipulating from other types of whales, they won't wait months to power up fully just to manipulate votes. And if they do, well they held Steem for a long period of time.
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.
SBD, creating utility and liquidity for STEEM would be much more valuable than SBD imho.
Power, yes I agree, there are a lot of complexity in codebase. Not sure if it would be possible to cover all edge cases if this were to be implemented.
That was a reasonable view 3-4 years ago, but the market has moved on from that to more of a focus on stable coins, and for good reasons. Volatile tokens don't make for good medium of exchange, unit of account, or store of value (the last is debatable, if one is willing to take a long term point of view).
There just isn't much utility to be had from volatile tokens other than speculating or longer term investing in the platform.
This is one way Steem was actually ahead of its time, but has lost some of that lead by failing to push ahead with development to improve and strengthen SBD.
I think getting rid of SBD (without replacing it with something similar) would be a huge error for Steem, but I could get behind the idea of simplifying between STEEM and SP.
The problem with SBD though is that it is only pegged to prevent it going down. We need a mechanism that inflates SBDs when they are above 1$ and sells them to buy STEEM, which is then burned.
Otherwise we will go through endless loops of speculation on that token, and it won't ever serve its purpose of stable coin.
Technically we don't really know to what extent the extraordinary events of late 2017, where we saw large and sustained overvaluation of SBD, would ever recur. So far we have not. There are already some improvements to SBD since then: 1) printing does not slow and stop at the very low 2-5% ratio any more, and b) SPS offers a large-ish ready supply of SBD which can be introduced into circulation by stakeholder vote (one way would be using SBD from SPS to buy STEEM and then burn it, as you stated, though this is still limited by the supply in the SPS treasury).
That being said, I also agree we should improve SBD. One way to do this is by further leveraging SPS: https://steemit.com/steem/@smooth/steem-improvement-proposal-allow-steem-donations-to-the-dao
"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?
Great comment, thanks!
SBD is dollar worth of STEEM and removing it is simpler because all SBD could just be converted to STEEM no matter where they are (exchange or savings).
Influence on reward pool, witnesses, dao, all will be similar to what we have now. In post, example number I choose was 30 days, you can call it 13 weeks, which will turn system into current system, but token staying liquid (influence is not).
Interest also stays and rewarded depending on influence or mature token holding.
Savings are great feature we have on Steem, with only one liquid token, Savings could be used as safeguard feature where you can store liquid token on savings with different interest rate (right now SP is used in some ways to safeguard token).
Steem in Savings would keep its influence, right? And earn interest.
Coordinating this with exchanges would be a nightmare. It is enough of a challenge just to get them to update their wallets.
ещё проще просто всё конвертировать в удобных юзеру "фиолетовых верблюдов". Сразу эквивалент и шо с ним делать
👍👍
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.
Steem on...!
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.
Congratulations @good-karma!
Your post was mentioned in the Steem Hit Parade in the following category:
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.?
Yes, yes and yes.
The maturity is the best way to deal with steempower because influence cannot be given to someone who just bought.
Even with the current model, if a new whale comes, it can powerup everything in one day and get as much influence as it wants.
Also will help lot to unboard investors.