Oligarchy Is The Second Worst Form Of Government After Dictatorship

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Until Ned sold Steemit, Inc to the Tron foundation, Steem was a kingdom with a passive monarch in charge with a number of rich barons in charge of securing the network. It was effectively an oligarchy where the monarch stayed true to his promises to not interfere with governance. However, after the introduction of the Economic Improvement Proposal, the distribution of stake was gradually improving in a manner that benefited honest content creators the most. Content rewards make up 65% of the inflation. Active curation initiatives successfully combated abuse, considerably enlarging the reward pool available for quality content creators. I will always remember the period between September 2019 and February 2020 as the golden age of Steem despite the price of STEEM going down. The chain never before came closer to working as intended.

With Justin Sun actively interfering with governance having purely selfish goals in mind, the balance has shifted in a radical manner. If it turns out impossible to rein him in, the security of everyone's funds is at risk. Therefore, I believe the creation of a sister chain where balances of Steemit, Inc's accounts controlled by Justin Sun are set to zero may be necessary. I propose that the new chain be created based on a snapshot of Steem's state at the moment right before the takeover of the chain, which may happen in the coming weeks.

I do not believe it to be necessary to or very wise to also set the balances of those accounts belonging to community members and voting on Sun's sock puppet witnesses to zero. They have sided with an attacker but we must remember that cutting out every "selfish milker" would be a very dangerous slippery slope because that description applies to most users here, particularly those who engaged in vote selling in the past, including many community witnesses. Besides, we want to clearly demonstrate what a fool's errand trying to buy the Steem community has been. Excluding the Korean community would only play into the hands of Justin Sun.

If a protocol cannot withstand the presence of selfish milkers on chain, it is clearly not built to last. The fact that the vote selling industry effectively came to a halt after the implementation of the Economic Improvement Proposal in September 2019 demonstrates that absent an attacker pandering to certain milking communities, the wider community has effective tools to counter the milkers.

I do not doubt the economic viability of a new sister chain. Steem pays 0.246 SP for each block signed to a consensus witness or a backup witness in turn for signing a block. Each three seconds, the chain prints 0.246 SP as witness rewards. The annual pool is thus 0.246206024365 = 2,585,952 SP per year as witness rewards or 123,149.571 SP per consensus witness (20 + one backup witness) per year. At the current price of 18 cents that amounts to about $465 471 per year divided among block signing witnesses. One turn per 21 is for a backup witness, which means that a top 20 witness currently makes about $22,000 per year from witness rewards. That is mostly passive income as each consensus witness signs a block once every three seconds 24/7/365. Should the price of STEEM go back to $2 and remain there for the whole year, someone keeping a consensus witness position for the whole year would make a whopping $246,281.143 in block producing rewards that year. At that price level, community members have every right to expect all consensus witnesses to engage in highly productive, high-quality and full-time development work.

I would say that one of the positive side effects of the hostile takeover attempt by the Tron foundation is the crucial role ordinary community members, belonging to the middle class that has emerged during the bear market, have played in defending the chain against Justin Sun's attack. A combined stake of 45 million SP has transformed from passive into actively voting stake. While voting on the current top 20 is crucial at this time, after the crisis is over and potentially a sister chain is created, the middle class should not let up and continue to use their swing vote to demand accountability and productivity from the witnesses.