The Problems:
Steem allocates 9 STEEM to Steem Power (SP) stakeholders for every 1 STEEM it creates to fund growth through contribution incentives. [1] Assuming over 90% of STEEM has been converted to SP, and SP stakeholders don’t participate and try to earn a portion of those contribution incentives themselves, then this results in Steem Power stakeholders being debased by approximately 11.11% for all STEEM printed for contribution incentives.
According to the most recent Steemit Google Analytics information that has been posted, as of July 8th Steemit users visited Steemit.com somewhere in between 9,000 to 10,000 times a day for an average of 4 minutes and 19 seconds and 2.01 page views. [2] You might think that this represents exponential growth and a high amount of web traffic, so what could possibly be the problem? The problem is that the Steem ecosystem is not fully leveraging the value of the web traffic it is receiving. Legacy social networks bank on this web traffic in the form paid advertising. There is no reason why the Steem ecosystem could not capitalize on this untapped revenue stream itself.
The Solution:
Leverage Steem’s web traffic by offering unobtrusive paid advertisements to third parties to reduce the SP debasement that comes from the printing STEEM for contribution incentives (when over 90% of STEEM has been converted to SP.) It is the intent of this proposal to distribute this added revenue stream to long term investors of the Steem network (SP stakeholders).
Temporary Steem Power Boost Auctions:
Temporary week-long SP boosts will be auctioned off to the highest bidder each week. The SP boost would only be usable on one post, and would disappear after the week it was paid for has ended. The winner of each week’s auction will be granted with an arbitrary number of SP for the next week that will allow them to boost their post to the first slot.
Unobtrusive Advertisements:
There would only be one boost active at any certain time, thus only one advertisement per page. Visit Reddit.com to get an idea of how unobtrusive the advertisement at the top of each page or sub-reddit is (I am referring to the advertisement at the top of the page that looks just like any other Reddit post.)
Avoiding Economic Consequences:
To avoid any economic consequences that may arise because of the SP boost, contribution rewards for the post that the temporary SP boost is used on would be negated, and the temporary SP boost can only be used on the post that was submitted with the winning bid (see the Curating Advertisements section for more details).
Free Market Price Discovery:
The temporary SP boosts last one week, and there would be an auction each week for the next week’s boost. The free market of auction bidders will determine the value of a week’s worth of advertising.
Auction Denomination and Payment:
Auctions for the SP boost would be denominated and paid for in Steem Dollars, with the winner burning an amount of SBD equal to the winning bid of the auction. The Steem Dollar is the obvious choice to denominate auction bids in due to its relatively stable value and it existing on the Steem chain.
Thwarting Auction Manipulation:
In order to bid X amount of SBD in the auctions, a user would need to have that same amount in their wallet. Otherwise, someone could run up the price of the auction with no skin in the game.
Ensuring Payment:
If a user’s bid is the current winning bid, then the amount of SBD they have bid should be frozen (or in other words un-spendable and untradeable.) This way we can be sure that the winner of the auction will be able to pay whatever amount they are bidding.
Curating Advertisements:
In order to submit a bid in the auctions, each bidder must also include an example of the ad they would like to use the SP boost on. If they win the auction, then the boost can be used on that post only. This is so that SP tokenholders can curate the advertisements by down voting them during the auctions. It provides a way for SP holders to reject an advertiser that they deem is inappropriate (a porn site for example.)
References:
4th Paragraph on Page 9 of the Steem Whitepaper: https://steem.io/SteemWhitePaper.pdf
https://steemit.com/steemit/@gavvet/where-steemit-adoption-is-going-to-the-mooooon
Thank you to @smooth and @pfunk for you help and feedback!
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