Tron (TRX) in retrospect is very lucky that they are not listed on U.S exchanges. Because of their depth, The Tron Foundation very much resembles a holdings company of decentralized profit generating applications. The SEC will have to decide what TRX means for the Tron Foundation just as they've concluded what XRP means for Ripple.
I believe "tokenomics" will have a lot to do with how a cryptocurrency is viewed. What doesn't make bitcoin a security is Proof Of Work (POW). Cryptocurrencies that use POW are considered a commodity, a store of value. What makes a cryptocurrency a security will most likely be argued surrounding Proof of Stake (POS).
The reason I think POS coins will have some security like regulation is that they pay a dividend in the form of new tokens. The larger your stake the larger your dividend. To secure a dividend you have to buy in.
Ethereum
As for Ethereum (ETH), the SEC has implied in its present form it is not a security. Does that mean it was before or will be after? I think it is the latter. ETH plans on going to a POS only model in the future.
What about dPOS?
The EOS settlement for an unregistered securities sale was based on the ERC-20 token before the main net launch and partially due to the amount of time the ICO was conducted. However, I do not think this will be the end of it. Ripple is the obvious odd man out. They are not POW nor POS thus they can't argue about how their functionality on a blockchain should be seen.
I would like to say that there is one-way dPOS can escape scrutiny. To be labeled a security your token has to be bought with the expectation of a profit. The Hive argument will be people don't buy for profit, they buy for influence on the network. The price of the token is a separate factor and is based on wishful thinking. Although skeptical, the SEC would have to concur. A brilliant defense in my opinion. However, I believe they will still have to answer for convertible HBD.
As for Steem?
Well since Steem does expect profit I think defining a more POW-like structure would be beneficial all around. Ethereum hybrid POW/POS model has exempt them from being labeled a security.
If users on Steem can be considered miners, I think this brings POW elements to the blockchain. The "tokenomics" shifting to where miner's posting activity determine their miner's reward for the week. Of course, this would mean some form of formal registration. It would also mean less Steem rewards for large stakeholders. However, this is a good capitalist boost.
This would reduce the scarcity of Steem on the open market as people would buy to boost their personal rewards since distribution will attract many more users. It would make investing in STEEM a reasonable investment without the need to consistently farm and creating conflicts of interest that are detrimental to the price. Furthermore, I like the idea that content creators decide who gets a share of curation based on the engagement they like. To create demand, to capture attention should be the goal.
Thus
People didn't give up on Steem or for that matter Hive. They gave up on the "tokenomics" that create an environment where the questions on how to meet the end goals are never answered. Tokenomics are basically half the fight.
In the past Steem did not take risks. Large stakeholders knew what could work for them a little. There was no pioneering. The lack of ingenuity especially on a social media platform is what hurt them. Their investments became their biggest obstacle. The market has not been wrong on this one folk. Something like this simply can not pump.
I would rather Steem price achieve hypergrowth because more people use it as cash and make it rare. Its value increasing faster than its print rate.
Just my personal (professional) opinion on Tokenomics.
Hopefully so, I am optimistic about it and I hope there will be a lot of growth.
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Yes, Project Hope's economy uses it as a medium of exchange for goods and services naturally. This is a niche that Steemit L33td should support and foster.
Especially as an appeal to people working long hours, raising families, learning and growing. A therapeutic social media platform. The greater reset that could arise from COVID-19. The mega earning content creators are pre-bitcoin. Steem should be designed where holding Steem is financially good enough. In my opinion.
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I enjoyed reading your article and I think you have an interesting take on proof of work vs proof of stake. I am not sure that the SEC uses that explicitly as a criteria. Economist have a definition for money and I actually wrote about it in an article about Ripple last week.
I think the SEC case will be argued along the lines of traditional definitions of money vs security rather than on the more technical definitions of POW vs POS. Regulators are far behind when it comes to new technologies. All you have to do is look at the current anti-trust case against Facebook, Google, and Twitter. All of the those cases are being argued using very old definition of anticompetitive practices.
Traditionally, anticompetition cases are argued about in markets with lots of competition--where one company achieves a monopoly in a single industry through anti-competitive practices and these cases were in industry with physical goods that have traditional economies of scale patterns. The current tech case doesn't take into account the nature of competition in the digital space where digital goods by nature have infinite economies of scale and the real fight is over "economies of scope". Just as regulators don't understand digital antitrust. I don't think the regulators understand blockchain technology yet. Most of the congress people and regulators are from a generation that is not known for being digitally literate. I would like to leave my link to my post here, but if you are oppose to that please let me know and I'll remove the link:
https://steemit.com/hive-175254/@therecantonlybe1/why-is-ripple-xrp-being-delisted-a-case-study-in-cryptocurrency-regulation-and-economics-part-1
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What they do understand is the need to reassert their legitimacy, and I feel like that is where the most laissez-faire projects that came into being will be thrown under the bus. Everybody else get a slap on the wrist.
Don't fight the feds they say.
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Yes, you are correct about that for sure. Ripple is one of the projects that looks traditional on the surface. Like they are "new money" people trying to sneak into the good ol' boys country club
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Another great write up, I'm in full agreement.
What is your opinion of how a coin like wise fits into this as a staking only, ownerless liquidity pool?
I think there's plenty of potential there and some things dpos could take a page from their book.
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Honestly, I don't even know what this liquidity pool mumbo jumbo is. There are plenty of simpler scams in this world.
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