Tron and Steemit Integration Update: Could this be a strategy to burn Steem?
I have been thinking about what this update means and a lot of questions are popping up such as:
- Could this be a strategy to burn Steem and raise its value?
- How beneficial is this update to Steemians?
- What does this update mean?
From my understanding, I'll try to propose answers to some these questions.
Yes. I think this is a strategy to burn steem that involves all Steemit users on the blockchain because all Steemians earn SP/TRX and Steem/SBD when the post pays out.
Before we talk about the matter let’s review the Steem-Tron Market VS the Steem-Tron Payout Exchange.
Normally, 1 Steem equals 1 SP which is equal to approximately 3.6 TRX but following the current Steem-Tron agreement at post payout, 1 Steem which is equal to 1 SP is equal to 1 TRX and this is something many are yet to effectively understand but as it stands, that’s how it is.
Going back to the mater with the new update, 1 Steem which is equal to 1SP is now equal to 0.5 TRX meaning Steemians need 2 Steem to be able to purchase 1 TRX at post payouts instead of the initial 1 Steem for 1 TRX.
What does this mean? It means Steem post payouts have been halved by 50%.
This implies, more steem will be spent to purchase TRX and if we are spending more Steem to purhcase Tron, then we are burning Steem using the Steem-Tron SP Payout Exchange market.
Summarily, Steem has been devalued with respect to TRX whose value has been inflated at the time of post-payout. To take note of is the intertwining between Steem and Tron Networks at the level of ...
The idea of burning steem has all been about raising the value of Steem and with this new update, more Steem is going to be burnt. This implies, we should be expecting an increase in the value of Steem in the days ahead but what about Tron?
Since more Steem is being used to purchase very little Tron, I think this update will have a visible spike in the value of TRX because it will also reduce the amount of TRX Steemians are earning from the Steem-Tron partnership. Reducing supply with respect to demand can trigger an increase in the value of TRX.
As such, I think this is a win-win for both the Steemit and Tron Networks hence a win for Steemians in the long term.
Its very clear Steemians prefer to earn more but earning more with very low values isn’t helping us grow which is why it’s best for us to look at the long term of this initiative.
I think it’s a great move from the Steemit Team and most especially because this burn Steem strategy involves everyone at the post payout level.
What do you think?
Sorry, but I don't read something about burning Steem.
It's just a reduce of TRX-Payout.
Previously, the ratio was 1 Steem Power : 1 TRX. Now it is 1 Steem Power : 0.5 TRX.
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It is about making Maths. The TRX doesn't appear from space.
Meaning 2 Steem Power: 1 TRX.
1 Steem Power will technically be burned. I looking at the position where value is given to one over the other. So why?
More clarification will be cool, so I can understand better. Previously, it was at an equal ratio. Now we have the changes, the post mention of increasing numbers. If you think it is just a change in ratio, that will mean that TRON DAO's had a fixed amount of investment on the platform. I don't think that was the case. Well, we are simply analyzing and trying to dig deeper than what is on the post. with time we have more understanding of the new development, maybe when it kicks up on the 15th of October 2022
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Nothing is being burned here, the author still receives the SP and the TRX, the only change is now they are receiving half the amount of TRX. Still receiving same amount of SP.
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The same amount of SP stay, but the equivalent in ratio has changed. Now where does half the amount of TRX go too?
I know we will want to put the same analysis with steem/sbd ratio. But then again why the change in ratio, if the team is not working on a something balance the two.
I understand what the author will receive, my concern is how it help the platform and how it better the ecosystem. For some time, burning has been on the table. So I think this change in ratio give one more value over the other, which can technically be a way of reducing one in circulation.
Example can be:
I used to give 1TRX, but now i will start giving you 0.5TRX.
Well, its my opinion and not saying that is what is going on. We will understand more in the days ahead, or may been a better explanation.
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It's very simple... They have a fund that pays out TRX for every SP earned. Now, instead of paying out 1 TRX for every 1 SP earned, they will have it pay out .5 TRX for every SP earned. The only result is that it takes longer for the fund to run out of TRX and users get half as many TRX as they were getting before.
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Sometimes it can be so simple. 🙄
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Yep, would have been cool to see a double instead of halve though! :)
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Thank you, @jrcornel this is very clear now and understood. That is why I said in one of my comments that except that they have a fixed fund for this. Then it will make sense that with the increase in the number of steemians, such a decision needed to be made. Other just keep talking about the payout ratio, which was not a problem. I was interested in the motive of the strategy toward both ecosystems.
The update mention 23 Million TRX (worth ~$1.4 Million) invested into the Steemit Ecosystem for the month of September 2022. Given that I didn't have information about the other months, I did not quickly think about the direction of your response. It makes more sense now. TRON & Steemit Integration Project has boosted engagement on the platform now for the past 22 months.
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If nothing is being burned, why devalue Steem and inflate Tron at post payouts?
What accounts for the difference in exchange rates at post payouts VS the current market exchange rates?
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It is nothing to do with exchange rates. It has to do with post payouts only. Instead of everyone receiving 1 TRX for every 1 SP they earned, they will receive .5 TRX for every 1 SP they earned. The only effect is everyone earns half as many TRX as they were before.
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Please, Can you give possible explanations for the questions asked above?
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It has nothing to do with exchange rates. They have a fund that pays out TRX for every SP earned by users on Steemit. Previously they set that fund to pay users 1 TRX for every 1 SP they earned. Now they are changing that payout to be .5 TRX for every 1 SP earned. The end result is everyone earns half as many TRX as they were previously. Your guess is as good as mine as to why they decided to cut the TRX payouts in half for everyone...
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My guess is that this is how they're able to fund the Steemit Development Incentive Program.
If that's the tradeoff, I'd definitely choose development over TRX matching.
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Yeah, that is all as i see
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I don't quite agree with this illustration. They are talking about payouts now which have no relationship with the market price of both assets at the moment. Let's see a few things:
Before- the ratio was 1 SP: 1 TRX (at payout).
Now- the ratio would be 1 SP: 0.5 TRX (at payout).
It mainly affects the payout. The market price would determine how much TRX would be needed to buy one STEEM but at this stage, it's about Steemit payout as regards Tron integration.
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I totally agree with you but I did my evaluations based on the Steem-Tron Market VS the Steem-Tron Post Payout Exchange because it’s very important for Steemians to effectively understand these updates from when they were made till present. This has made me to throw more light in the post via an update.
Generally, the value of Steem earned at post payout has been halved meaning we now need twice the initial steem amount at na post payout to purchase an equivalent Tron amount like you said:
Initially 1 Steem = 1TRX
From 15th, 2 Steem = 1 TRX
The summary of the story is that Steem at post payouts has been devalued and Tron inflated in a bid to spike the prices of Steem and Tron in the future.
This steem devaluation strategy is final way out to have all content creators burn steem.
I hope this now means Steemit team will stop the burn steem campaign
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Greetings friends.
The analysis you are doing is out of context, the trx we have been receiving has nothing to do with the price relationship in the market, this reward was given from the integration of Tron to the Steemit platform, ie, it is an extra reward that we have had all this time.
The only thing that has happened is that "possibly" due to the drop in the value of the token, it is necessary to generate a protective action towards the TRX, where the most viable thing to do was to reduce its issuance, that's all.
Example.
If during the month of September 1,000,000 TRX were distributed in an extraordinary way, it is sought that in October the issuance of reward is lowered to 500,000, this will allow reducing the amount of TRX in the market to try to balance or maintain a good value.
Despite this reduction, the TRX reward per Steem Power is still very good.
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Wise words @adeljose
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This is not how this is going to work, see my respond to you above. It only has to do with post payouts. Authors and curators will receive half as many TRX as they were before. That is the only change.
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What is the reason for paying half the amount? Where does the other half that was initially paid go to?
Why chose to pay half instead of paying more?
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My guess is they (whoever is calling the shots) decided the costs were greater than the benefits so they cut the payouts in half...
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Following the thread of this conversation, I think the answer may lie in the origin of the Tron funds we are dealt, is it a donation? or are they purchased with steem?
Either way, for us users it has been an additional reward, but perhaps for the ecosystem, it is an expense they need to reduce.
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It a strategy to burn Steem, the way I see it.
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This has nothing to do with buying or burning, it just means that now users on steemit will receive .5 trx for every SP earned instead of 1 trx for every SP earned... all things equal, users will earn half has much trx as they were before.
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