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Steem Needs Funding for Development

It's a reality that can't be ignored.

It all started three months ago when @ned released the now infamous Steemit Update (https://steemit.com/steem/@ned/2fajh9-steemit-update) announcing many changes to the structures of Steemit Inc, including the firing of around 70% of their staff.

Given the weakness of the cryptocurrency market, the fiat returns on our automated selling of STEEM diminishing, and the growing costs of running full Steem nodes, we have been forced to layoff close to 70% of the team. The remainder of the team is staying on to focus primarily on reducing the costs of the infrastructure running steemit.com and our public APIs, and ensuring that the community can remain informed of developments.

Reality sure doesn't pull any punches.

The effects of the down market have been felt across the entire cryptocurrency sphere, so it was only a matter of time before changes had to be made here to better reflect that reality. Personally I feel it's a good thing that Steemit Inc have the foresight to see the writing on the wall and the will to act on it. I'd hate to think what could of happened if they didn't course correct.

What do you think would happen to development if Steem Inc had to cease operations? My 5 Steem says, I don't wan't to know, lol, I'm quite happy not speculating on that horrid reality.

It's no secret that Steem Inc have been the lead developers in the Steem space and as a result they have also shouldered the majority of the associated risks. In many ways that post from ned is an acknowledgment that those risks have taken a toll. They seem to be moving into a state of consolidation and have prioritized sustainability over development at least for the short term future.

Where does that leave us?

Well, just because Steem Inc have kept their doors open and the lights on, it doesn't mean all developers have.

The truth is: development is stagnant and has left us in a weird state of limbo.

In their current state if things are not stagnating they are actively regressing, as seen with AskSteem The folks behind the Dtube search engine. Now they DID cease operations, and we can feel how worse off we are because of it. The question of 'who is next to go' begins to crop up in my mind, and I begin to run the odds on the next group of unlucky devs to close their doors.

Well Hopefully that wont need to happen. Hopefully we can come up with some way to fund development that doesn't place the burden massively on Steemit Inc. After all **this is supposed to be decentralized** so why not seek a decentralized solution?

Enter:

Blocktrades

These folks have an idea.

As I’ve watched events unfold in the last week or so in the Steem community, I’ve become convinced that we urgently need a worker proposal system like the one that exists in BitShares, both to speed up and to decentralize the development of the Steem blockchain.

You can read about it here: https://steemit.com/blocktrades/@blocktrades/proposing-a-worker-proposal-system-for-steem

In short, they're seeking to create a proposal system which is community funded. To achieve this they have set forth two possible funding options for the community to debate over and decide on.

OPTION A is the voluntary donation option.
OPTION B is a redistribution of around 20% of author rewards to be taxed to fund proposal projects.

You can read their debate post here: https://steemit.com/blocktrades/@blocktrades/pros-and-cons-of-two-versions-of-steem-proposal-system

Have fun sifting through the various opinions.

From what I could gather people don't like either option. People argue that donations wont work because not enough people will actively contribute, and some argue that donations are the only ethical way to fund something like this.

Others believe the tax to be the most immoral route which will push creators away during a time where creators are already leaving the platform in droves. Others see it as the most practical and realistic solution. After all, author rewards consist of over 50% of Steem inflation, so in the eyes of @blocktrades there is some room to work with there. This then opens up the debate about increasing the rewards for curation if author rewards are to take a hit.

Some speculate that if that were to happen (if curation rewards were to be adjusted upwards) that it would spark a return to investment, and we would see manual curation occur once again. (that sure is a nice thought. I don't know how realistic that is though.)

Voting

So what has the community decided? See for yourself: https://steemit.com/blocktrades/@blocktrades/stake-weighted-poll-for-two-versions-of-steem-proposal-system

It looks like it was a fairly close contest.

The Donation route ended up with 110 upvotes at $39.48
The tax on inflation route ended up with 155 upvotes at $39.82
(amounts accurate at the time this was written)

IT looks as though that even with smaller users (like myself) that the tax is the more popular option. DISCLAIMER In the video it shows my original vote in favor of donation. Even though my opinion on this has changed I wanted to keep my original vote just to show how my own reasoning has developed on this topic.

AT FIRST I was extremely skeptical of the tax. After all, taxation without representation doesn't tend to sit well with people. How is it that in a decentralized environment, how can one entity like Blocktrades unilaterally decide on how the rewards are to be redistributed? After all, I didn't elect Blocktrades - they don't represent me, why do they have this power?

And then I took a step back, drank some water and calmed down a bit. I'm a new creator so don't get mad because I get emotional, this impacts me directly.

I then tried to look at this from the perspective of someone heavily vested, like a dolphin or a whale, and from a perspective encapsulating all Steemians (from creators to curators) and the tax begins to seem like the only logical action. I arrived at this by thinking of everyone in terms of what risks people expose themselves to on here.

As it stands creators don't assume much risk. You don't need to be vested all that much to be able to create content and to be rewarded for it. In fact, a brand new account who is assuming no risk could reap large benefits from a heavily vested community to the tune of absorbing over 50% of overall inflation.

When new tokens are created it lowers the value of the total supply as the supply gets larger. In a sense, the people heavily invested in holding tokens are, in a sense, paying for new tokens to be created. As a result these people must take on the risks involved; after all Steem is a volatile currency, and powering down Steem Power takes up to 13 days to complete. 13 days is a lot of exposure in a market like ours, which translates to a lot of risk.

It makes sense to lower the rewards of those assuming the least risk in order to guarantee the sustainability of the platform, if it is the most practical action to take. Given the heavy weighting in favor of authors I think this is reasonable.

The best suggestion that I have read involves increasing curation rewards to balance the author reduction, and to also encourage people to power-up more and curate more.

Some people seem to think this will bring about an increase in curation bot activity, but even if that is true is that really a good reason not to do it? I don't think so.

Personal opinion

I think the ecosystem at large has been taking some heavy doses of reality lately, and a reduction in author rewards might just be yet another reality check for us. Growing pains are horrible but necessary. I know that many creators will be disheartened by a drop in their rewards and some might leave all-together, but this is something that might need to happen.

There is a saying I've heard quite a lot regarding the crypto market lately; that it is a GOOD thing that we are going through this bear cycle as it expels the people interested in short term gains and strengthens the fundamentals of the market.

Perhaps the same can be said for some Steemians who are disillusioned by the harsh realities of today, compared to the euphoric realities of a few years ago.

With improved infrastructure comes improved incentive to come onto the platform, which directly effects the often lauded 'network effect'.

If we spend our time from now till' the next bull market developing instead of stagnating, who knows what new heights of euphoria we could yet reach?

Who knows what plateau this platform could be catapulted towards.

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I hope this has been informative. I know I glossed over a lot of details, I didn't really want to bog you down with a full autopsy of this subject, so if you wish to know more please click on the links provided and HAPPY READING

IF YOU ENJOYED

PLEASE UPVOTE AND FOLLOW

Please leave any comments or suggestions down below! :D

Thanks again.

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