Method to the Madness - Vulture Capitalism Comes to the Blockchain

thoughts-in-time (64) · 5 years ago

To me, @dhimmel's solution seems like the best way to fix this. It can demonstrate that any attempt to fork the chain against the will of the organic community with astroturf witnesses will result in a forked chain. Ice him out of the old iteration and fork defensively after he breaks off into a new path. This way, it is him shooting himself in the foot as opposed to us eating the rich (regardless of what his intentions were).

Then, let the exchanges decide which coin they want to represent after they judge us based on our actions. Perhaps, if he's made aware of this potential, he'd be far less likely to do it. It seems logical not to, simply so he can retain a higher value on his stake. This is why I don't oppose the gridlock because it allows both sides to stew in it more.

Setting aside what his initial intentions are, it doesn't make sense for either party to fork the chain if they care about the value of the stake. I'm not too clear on the technical implications of his plan, but I ran it by a few people, and they seem to think it's a viable solution. It might even be wise to put him on notice that he runs the risk of this happening so that he can make a logical choice.

"He who thinks he leads but has no followers is only taking a walk." ― John Maxwell

Contrarily, were the witnesses to act in bad faith and fork him out of his investment after he backed down; if I were running an exchange, I'd drop that community's token like a bad habit, simply because they've proven they won't honor their token.

If he is put on notice, then isolating his stake after he burns the community is a defensive move. However, to preemptively do it, looks like a hostile action.

It's easy to see how he could perceive what was done to him in the soft fork as hostile, but he also appears to have had hostile intentions towards the organic community. IMO, how this ends will firmly establish the reputation of Justin Sun and the community's blockchain regardless of whether or not it remains Steem.

Vulture capitalist, or venture capitalist, we need to set a good precedent with regards to honoring their ability to take their stake to the marketplace, if we don't I don't think there will be a marketplace for our token. All the other weirdness of what he can do within the steem ecosystem with his ninja power is reasonably an internal community matter because this is a very unique situation. The sooner we allow the "neon green" stake to go to the market, the sooner it becomes a decentralized stake.

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6 votes

valued-customer (67) · 5 years ago

"...they judge us based on our actions."

I don't think that's how this works.

We've seen how the exchanges will proceed when the Steem community is opposed by Sun, and it's not going to be based on our actions, but their financial ties, and Sun has significant influence in that regard.

Regarding forks, we'd better have a preferred option ready to roll out when Sun's is ready, because we will likely prefer nearly anything to whatever Sun implements when he gains consensus.

We'll see about exchanges in the aftermath, once Sun and Steem are a separate entity. Without a community to imbue his token with value, regardless of their prior relationships with Sun, it's likely his token will be dropped eventually by exchanges, and that will not have any bearing on a new token the community fork supports, which will have the value of the use case that provides.

There's no reason that exchanges wouldn't list that coin, as long as it will make them money.

Thanks!

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thoughts-in-time (64) · 5 years ago (edited)

"There's no reason that exchanges wouldn't list that coin, as long as it will make them money."

Well, that's the thing—If you fork out the largest
buyer of Steem in history, it will set a precedent
that Steem might not be a safe investment, and
this is why I think it's important how the fork
goes down, if it goes down. Preferably, he could
safely remove his socks without having to worry
about losing his stake. Then Steem could carry on
without forking anyone over. And the value of the
coin will stay in one coin, instead of getting diluted
into two different coin listings. Exchanges will make
money as if the cryptosphere believes in Steem and
they may depend on how the Community behaves.
(WoS) wisdom of the stake, is supporting gridlock.
Perhaps the majority of Steem power doesn't want
anybody to break/-and-or-fork anything up.

valued-customer (67) · 5 years ago

I can't speak for any stake but mine, but I sure don't want Steem to get all forked up. I still would prefer that to a unitary executive.

I reckon most stake does too. In the event Sun forces a fork - which I am almost sure he will - if we have a suitable fork available to migrate to, I think most of the community will migrate to that fork to avoid being Sun's property on his fork.

Where goes the community the value will go too. While Sun might get his buddies to list his coin, without the community they won't make money on that coin.

The community's coin will make them money, because the community buys and sells it's coins.

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thoughts-in-time (64) · 5 years ago

It sounds like the community precipitated
one. So, I guess we shall see what it do and
how well it is received by the marketplace.

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valued-customer (67) · 5 years ago

Everything in it's season. The harvest follows the planting in due time.

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ultratrain (62) · 5 years ago

Unfortunately we can't put a lot of faith or trust in the exchanges helping us out with their aiding of JS in this clusterfuck. They'll support their corrupt crony friend and fucking the community in a heartbeat.

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thoughts-in-time (64) · 5 years ago

Right but with dhimmel's plan we don't need
to trust Sun. We simply act accordingly if /&/
when he choose to fork everything up. Read
his latest post, see what you think about it.

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fknmayhem (70) · 5 years ago (edited)

Great write up.

To be honest, I think a lot of all plans were already started before the announcement. Most probably with Ned as “advisor” and his advise likely may have been - or at least hinted at - “the community and witnesses are unworkable” and “just port it to TRON and benefit the users who follow, dapps will follow since they need users”. Also “don’t wait for them or ask them, they are going to give you hell”.

That is why the initial announcement was not done to the community first, nor an introduction of the new overlords, no. It immediately went to porting and token swap, complete with announcement that exchanges would support the new TRON-based token.

Even if, of currently around 10k daily commenters, only 5K followed that would still be a massive increase to TRON who only have around 24k daily users according to dappreview.

Additionally, suddenly having both control and a massive amount of STEEM it would be possible to increase the volume of the token very easily via large scale washtrading on poloniex, and later also on polonidex.

This is not a vulture at work, this was a blatant attempt at M&A where the end goal wasn’t necessarily about making much money of Steem ASAP but a big bump in TRON activity (at least 25%), and maybe some more dapps on TRON too. At below market value acquisition, and thus probably not more than $5-8MM cost max, that alone would represent a reasonable investment already. It would also have allowed him to shitdrop STEEM all over his chain, without caring too much about the actual cost of STEEM to him.

Let’s be honest, almost every other day we are reminded on social how many dapps his origin chain has. Yet, a quick look at blocktivity shows a chain which has barely more ops daily than Steem, and that only since rather recent times (blocktivity has no ops/day history, sadly enough). All that while we have probably less than 15% of the dapps TRON has.

Don't be fooled, the end goal hasn’t changed. Definitely not after two major exchanges publicly distanced themselves from him. That only motivates JS more because since it has become a face saving exercise to win this war. Yes, now it is effectively a war for him. And Bloomberg’s post about Buffet’s “lunch date” will only have amplified that feeling for Justin.

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denmarkguy (76) · 5 years ago

@v4vapid, thank you for a really well thought out and thorough explanation of the scenario we're dealing with here.

I had been pondering Steem's predicament as yet another example of "predatory capitalism" and your article only bears that our further. The "no-shop" clause was another piece I had not taken into consideration; thank you for that.

A true value investor could have come in here; acquired the Steemit, Inc. stake and assets, pumped maybe $10-20M into development and marketing, and could have seen their investment in 17-cent Steem potentially turn into a result of $10 Steem in the matter of a couple of years, while also being hailed as *"the savior" of Steem. Instead we have this... shitshow.

He clearly did not expect the community to "bite back." Not only did the community bait back, it made JS lose face and credibility with his cronies at Binance and Huobi... and much of the Steem liquidity dried up, so he was prevented from executing a quick fix by trying to buy millions of Steem to get the sock puppets back in change.

It does make me laugh that TRON holds itself forth as a developer and proponent of decentralization when it is one of the most centralized blockchain operations around!

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5 votes

valued-customer (67) · 5 years ago (edited)

These are exactly my thoughts on what happened. I am convinced Sun's reputation as a marketer is completely BS. What he is, is connected nepotically, and his degree of competence at business is revealed by his failure to pump a couple ducats into Steem with fanfare, capitalizing on the launch of communities, and watch the price moon as the market took notice of possibly competent, well funded leadership took the helm of Steemit.

He'd have had to glad hand the witnesses and stakeholders of Steem to do that, but he could have just blown smoke up their skirts and kept them in line as @ned did for years. He just failed to bother, and revealed his lack of acumen by letting the SF happen.

Then, to make things worse, instead of holding a steady course once he realized the witnesses and other stakeholders had relevance, he chose to remove that relevance to the best of his abilities, and degrade the value of what he had just spent $M's on. He also thereby exposed the soft, white underbellies of corrupt exchanges with zero respect for their fiduciary duty to the customers, or grasp of such acts on their future market. Anybody using Binance or Huobi today is either completely incapable of due diligence, or retarded, or both. @edicted well points out that the liquidity of Steem on Binance is none, and also drives Steem price down there, which makes using Binance for Steem now, regardless of it's demonstrable cavalier treatment of it's Steem customers, a guarantee of losing value.

Honestly, @ned may have been confused by the novel business he invented, and driven to lapses of judgment by exigency because of that, but compared to Sun he was as virtuous as a Vicar. I note his potential extrication from dependence on the community has caused his lack of ethics to be far better revealed in his desperation to break free, but even he was not so stupid as to centralize the DPoS flagship of decentralization and let everyone in the market see exactly what really was behind the curtain.

Were I Sun I'd have trouble sleeping because of all the cringing I'd be doing as my mind replayed all my asinine mistakes while I tried to fall asleep. He may not be capable of that, given just how clueless he seems to have been going into this mess. I mean, you have to be able to grasp you've made mistakes to regret them.

What's important going forward to the markets is whether he reveals he is capable of learning from his mistakes. The absence of actual conciliation and moves to begin pumping Steem is painting a brilliant target on his assets by revealing his utter incompetence to conduct business affairs. Weak buzzards don't just get less of the carcass the slavering gathering of corpse eaters pick apart. They become carrion, and part of the feast.

Thanks!

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v4vapid (72) · 5 years ago

A true value investor could have come in here; acquired the Steemit, Inc. stake and assets, pumped maybe $10-20M into development and marketing, and could have seen their investment in 17-cent Steem potentially turn into a result of $10 Steem in the matter of a couple of years, while also being hailed as *"the savior" of Steem. Instead we have this... shitshow.

Exactly, this would be the best case scenario for Tron and Steem, the win-win scenario. Only it very quickly became a complete shitshow!

Why?
That's what everyone's been scratching their heads trying to figure out.
Again, you're right over the target as Sun didn't expect the community could rally so quickly and mount an adequate defense to the takeover. Now, there's a stalemate and the longer it continues and the more they seeks to gain the upper had, their plans come into greater focus for all to see.

Yes, the irony of their mantra of "decentralizing the web" is quite comical.
I suggested to some that we help correct their typo as their slogan should read something like:

Tron: Recentralizing the web

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edicted (72) · 5 years ago

If only it was his plan to dump those coins ASAP. There isn't near enough liquidity on the market for him to turn a profit. The price would drop too fast. Instead I fear he plans to dump millions a month over a period of years, keeping us under his thumb the whole time with no plans to invest in the network.

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6 votes

v4vapid (72) · 5 years ago

Yes, I would think that you're correct as it wouldn't be possible to dump the entire stake all at once, as the price would certainly tank. Perhaps, I should have put it better with "begin dumping millions of tokens". Thanks for clearing that up!

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lighteye (71) · 5 years ago (edited)

This is the best explanation of the events I have found so far, @v4vapid, thank you very much. I would like to add just two points:

The Tron smart contract network, with a mission to "decentralized the internet", has been marketed as a competitor to Ethereum.

The idea that one man, TAKING OVER a decentralized platform, is on a mission to “decentralize the internet” is absurd in itself. On that oxymoron he had to be recognized as — let’s say mildly — insincere player.
On the other hand, we will probably learn more on DPoS through this attack than any other theoretical argument could provide.

As soon as I finish a job that I have accepted, I’m gonna write a text about my vision how ideal decentralized platform should look… and then I’ll hope there are some skillful programmers who could read the text and make it true.

Keep up a great work, @v4vapid

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5 votes

v4vapid (72) · 5 years ago

LOL, yes!
I also laughed out loud when I read Tron's Mission statement - it's completely absurd when we follow their business strategies - which are anything but decentralized.

I agree, this horrible chapter in Steem's history will probably help to advance DPOS or generate some hybrids that are more resilient than the current iterations.

I'd like to hear your ideas on decentralization - maybe you should enter @theycallmedan's contest - What does decentralization mean to you?

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argsolver (52) · 5 years ago

@v4vapid DPoS needs to evolve into REDPOS for better suiting a social blockchain.

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abh12345 (76) · 5 years ago

Excellent write-up V - V for vapid, not Vultures, which does seem to be what we have circling at present. I've had to distance myself a little this week, too annoyed to get involved although I understand now is probably the time to make some noise.

I think you could be right about the 'no-shop' clause - Trons dealings in the Bittorrent suggest they have gone this way before, and it's worked favorably for them.

Again, excellent work, and I hope many get to read.

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5 votes

v4vapid (72) · 5 years ago

Lol, V for Vultures...
It does seem to be the Modus operandi of Tron gobbling up other more innovative projects that are struggling and then plastering the Tron banner over top of it.
We haven't really seen this yet in the crypto space but I'm sure we'll see more of these type of takeovers in the future, especially from companies like Tron who don't seem to produce anything of significance on their own.

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abh12345 (76) · 5 years ago

Yeah there could be more of these on the way. Perhaps they'll learn from this move - losing the faith of the community and lead developers at the company, arguably Steem's main draw must be a huge blow. I guess he'll be dumping ASAP :/

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v4vapid (72) · 5 years ago

I think dumping asap may have always been part of the plan...
If they bought at below market price then he's already made a juicy profit, if he could overthrow the governance and get those funds to the exchanges quickly. He's got one foot out the door but he's taking a beating atm, especially his reputation in the space.

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dalz (68) · 5 years ago

Great elaborating.

Vulture Capitalisam seems to fit perfectly in our situation!

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v4vapid (72) · 5 years ago

Glad you enjoyed it and possibly shed some light on the situation we're in!

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mattsanthonyit (73) · 5 years ago

@v4vapid it is like you took your time to do more vulnerable researches on this Vulture Capitalist which I think is the best drama scene tittle for the current Steem situation.
I used most of my time to read alot of articles written on Justin Sun, Tron foundation and more but the bottom line is that we need to stick together as a community to battle this ruining situation.

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v4vapid (72) · 5 years ago (edited)

Thanks, yeah I like to do research, not sure if you meant to use'vulnerable', but i think stepping back and trying to see what's happening from another vantage point can really help to better understand the situation any situation. People are very emotional about this, myself included, so it took me a while to put these ideas down in a post. I hope that by better understanding the situation we can make more informed decisions on how to fix it. Cheers, thanks for the comment!

mattsanthonyit (73) · 5 years ago

You are a good researcher and I think I will have to work with you as well. I love when someone view a situation from another perceptive of life and also finding solution from another angle too.

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geekgirl (72) · 5 years ago

Thank you for making this detailed and informative post. It does help with understanding the motivations behind hostile actions, which otherwise made no sense.

v4vapid (72) · 5 years ago

Yes, that's what has been bothering me this whole time, questions of "Why"?

Why so aggressive?
Why the erratic and contradictory behavior?
Why are they so obsessed with the powerdown and aiding exchanges?
Why did they invest in Steem, at all, in the first place?

It does help to have some sort of frame of reference in which to view the behavior. I only wish I could provide some solutions to the situation but the community is doing an admiral job fighting off these scavengers ;)

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charlie777pt (64) · 5 years ago

I didn't post on Steem for a long time, and I was all week collecting facts and news, and after reading this comprehensive post, I feel all and more that I had to say is here.
Steem is under a hostile takeover for sure, by a populist dictator whose actions are the opposite of what he says.
No doubt this takeover will harm all the community in the name of easy money.
I'm afraid that today like it is going on in society in general, populist leaders attract a lot of people that will follow them under the false emotional promises of the "best for the community" to fulfill just one person's wallet.

Follow the man's behaviors and actions, and don't listen to what he says.

palikari123 (64) · 5 years ago

Paul Singer would be rolling in his grave....oh wait hes not dead. He just kills things himself:(

Btw, did you know that venture capitalists call themselves activists? lol!

v4vapid (72) · 5 years ago

Lol, Paul Singer isn't dead! Shit!
To be honest, Singer and his Hedge fund came up more than once in my research. Actually, the case of Puerto Rico was originally part of this post but I removed it to keep a sharper focus. I might even write a follow up with Singer and PR if I can get around to it.

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palikari123 (64) · 5 years ago

Good idea! I have had Singer on my 'hit list' as well lol. That list is so damn long at this point though, that it will probably just remain on an ever expanding 'list', haha. Can we request to the powers that be, to stop manufacturing all these new crises, so we can get to work? How do you even putin a request for that lol.

On the tron situation, I was a lot more positive and open minded about the whole thing than most, until I started to see all of this two-faced spin, and continual hostility towards the chain from Sun and his team. I'm going to plead ignorance on Steem politics at this point, and leave it to the witnesses that have my votes. It seems I just don't know enough about the origins of it all.

Anyway thanks, and I look forward to your sequel!

valued-customer (67) · 5 years ago

Excellent research and explanation of the difference between what Sun pretends to be and what he actually is.

Thanks!

thepavsalford (49) · 5 years ago

-A good example, in my opinion, would be to examine the various cases of fan-owned football clubs like FC Barcelona. Some of them have hugely successful, which means there is no need for funds invested by venture or vulture capitalists, since there is a strong base of fans that support the clubs financially. However, there are cases that this model has not been so successful.
-Taking over a distressed company. It’s like finding a vulnerable woman after she has broken up a relationship and you take advantage of her to have a one night stand with you. Then you walk out on her, like you don’t know her at all, leaving her alone or prey to the next vulture.
It remains to see whether this will prove to be the case in practice. On the other hand, it’s better to be safe and rely on Steemit’s own online community, than believe the promises of vulture capitalists and be sorry.
-Another aspect is that many people, with professional investors not being an exception, have just started to understand the cryptocurrency world and how it works, so it would not be fair to put them all in the same pot.

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elindos (60) · 5 years ago

Thank you greatly for these explanations!
You made your research.

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dark5tarzz (25) · 5 years ago

Too much pump and dump

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sgerhart (39) · 5 years ago

Things like this are going to happen, it s part of the process. The question is , do the people who make up the steem network hold the value of this community as their first priority? Are your dedicated enough to the principles at the core of the project to sacrifice whatever it takes to continue supporting and developing it? Is the community worth enough to you to dig in and do whatever has to be done to preserve the ideal of decentralisation and true individual value? What is at stake here is so much more important than how much money some vulture can glean from his dishonest, self-serving machinations. This community is at the core of the immense potential blockchain can bring to the world. Personally, I would love to hear about what I can do to carry on the spirit and ideals I see as the core of the Steem movement. We must stay the course for the benefit of all and do what is best so that this opportunity is not lost out of frivality of envy or want of personal gain. There are so much more important issues at stake.

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paresh10p (38) · 5 years ago

Best And Great Post...

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luegenbaron (64) · 5 years ago

Great post! :)
@tipu curate

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tipu (67) · 5 years ago

Upvoted 👌 (Mana: 0/3 - need recharge?)

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gray00 (57) · 5 years ago

We really got our self into a pickle this time. A solution will come, either we split the chain up , or hopefully either Justin Sun stops the Sybil or sells the chain to someone who will stop the Sybil. I'm keeping my optimism around Steem itself .

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mrgreen (64) · 5 years ago

justin ludovic.png

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adetorrent (74) · 5 years ago

This "Roy" guy is to Justin what William Barr is to Donald Trump.

Screen Shot 2020-03-16 at 09.51.56.png

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jagged (59) · 5 years ago

The good thing is that the Ninja Mined stake is now an issue to be addressed.
I would rather it get locked down and used for development, get liquidated into the marketplace to rise the water levels initially, or just be removed altogether.

This idea of "community funds" that are owned by certain person(s) just adds issues that Tribal communities are suffering once the Family in Charge sells to developers and does a runner - just like what happened.

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joythewanderer (78) · 5 years ago

Thanks for the write up

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arcange (73) · 5 years ago (edited)

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networkallstar (59) · 5 years ago

I think Sun underestimated the Steem community. No one is going to sit back while Tron tries to take over. The big question is how will the HF turn out?

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cloudspyder (59) · 5 years ago

Tron the vulture...

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