Big whales are powering down. Should we be worried? Is this a pump and dump? A scam?

in steemit •  8 years ago  (edited)

(Edit: I did not know how "powering down" works. I just assumed if you power down, you can choose to power down on a small portion of your total SP... I now learned this is not the case. If you choose to "power down", it gives you the only option to get %1 of your steem power in liquid steem, till you stop powering down. It now makes sense, and I don't think there is any reason to panic. I falsely interpreted the whales powering down as a disbelief in long term viability of steemit.)

I was just browsing, the tools around the steemtools.com, and saw steemdown.com.

When I looked at the steemdown.com, I saw the fact that most of the whales are powering down as fast as they can.

See screenshot:

(Or you could just go to the site http://steemdown.com and see)

I'm looking at the stats for @steemit, @blocktrades, @jamesc, @berniesanders, @smooth, @dantheman, @itsascam, @rainman, @michael-a, @summon, @cloop1, @pharesim, @steempty, @wang and more...

All those are powering down %100 (or close to it, %90+) of their steem power.

But, as whales, if these guys had long term faith in steem, say, they believed, in the next 5-10 years, they would replace facebook, reddit, twitter, youtube, and their steem value will go up multiple fold, wouldn't it make more sense to keep that steem power?

This worries me. Was this all a scam, a pump-and-dump? (it is ironic that one of the whales is named @itsascam )

(I have not put money in myself, but I was excited about long term potential of a censorship free social media platform.)

Please comment and discuss.

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They gotta make real dollars sometime man.... I cant pay my rent or buy food with steem power. Mind you yas couldn't pay me enough to power down I wanna power up

I do understand that, but why cash out %100? At least sell %50 or less, and keep half.

POWERING DOWN AS FAST AS THEY CAN - you mean at the single and only rate you can power down at? OK

Don't they have the option to power down only a little bit of steem power they have? Do they have to power down ALL of it?

They can toggle it on and off. Any time it is on it will be AS FAST AS THEY CAN. So your screenshot is a sample that suggests they are collectively powering down at about 60% speed.

No, no option. So yes, all of it. But they can stop that process whenever they want.

They didnt designed a whole revolutionary social media site just to scam people. It is absurd.

I sure they are just diversifying their portfolios or buying STEEM in preparation for a potential price increase.

I don't know, but wouldn't it make more sense to, say, only power down %10-20 of their SP, if it is only for diversification? They are literally powering down as fast as possible. Not just a small portion.

I wish some of those whales commented themselves and let us know what they think.

It's going to take them 2 years to power down 100%....A 2 year dump? I doubt it...

Powering down doesn't necessarily mean they're going to sell the STEEM. Of course, any large holder will know that to realist the most from their investments will require taking a long term approach, and that includes gradually selling some of the stake.

In the long run, it is also beneficial to the platfrom to have a distribution more akin to the 'normal' distribution in terms of wealth. This will give us less volatility on things like price, and even the curated content.

One down fall is that the dollar value of posts will probably have to go. I can't see it maintaining this level of distribution and retaining that price mechanic . This is even when the author rewards are paying out only around a 3rd of the actual quoted dollar amounts in liquid sellable steem dollars.

" some of the stake."

Except they are not selling some, but all. That's what worries me. Wouldn't it make more sense, if they sold some, while kept some of their SP?

I wouldn't be worried if one was powering down %10, another %20, another %50 of their steempower they hold.

I wish some of those whales saw this and cared to comment what their motivations and plans are.

They have the option to power back up if they wish.
Essentially they must believe that growth of the site will endure the gradual selling of their stake. Remember, they can power down their whole SP but it is a controlled process. They won't be able to sell all their stake in one go. As long as they bring value to the site in proportion to the pace at which they liquidate their stake, then the price won't hurt too much. On the other hand, i'm not all against the price going lower as long as the fundamentals (ie the site, the development , the growth etc.) continues an uptrend. You just have to stick it out for a couple years.

Most people who start their journey on the internet and become 'successful' have had to spend considerable time growing along with the platform. But if the platform is really worth anything, then what's to worry?

Everyone can only power down at 1% week. If you had bills to pay and $20,000 waiting for after 7 days yoy would be a fool not to powerdown. I woould power down at least 10% now. Dont forget, these guys were not rich before this, they have bills just like you.

But you have the option to power down %1 per week of %100 of your holdings or %10 of your holdings or %50 of your holdings don't you? And I don't know you, but I don't need $20,000 in weekly bills to pay.

No, 1% a week applies to all accounts. I said $20000 assuming someone hard 2 million dollars worth of steem. If they have say 100,000 dollors they could only get 1,000 per week.

Yes, but if you have 2 million dollars of steem, you have the option to power down only 1 million dollar of it, keep 1 million in steem power and cash out only $10,000 per week don't you?

No 1% a week. It would take 104 weeks for anyone to collect their sp power. Its hard coded and applies to everyone whale to minnows.

  ·  8 years ago (edited)

Steem and steam dollars are lquid and can be sold at anytime. Steem Power is locked at 1% per week. I think thats where the confusion is.

Thats of course assuming the price is flat. If everyone powered down at once, only 1% of of all Steam Power would be availabe per week.

No. You can either start the process of "Powering Down" and as long that option is turned on, you will get 1% of your stake/week, and then you can "cancel powering down". There's no option to choose the size of the stake you want to Power down.

Oh, I didn't know that. Than it makes sense, no reason to panic.

I thought they would have the option to power down on less than that, etc...

Just because you dont need 20.000/week in bills to pay, doesn't mean other don't. Just saying... ;)

I know, I don't have servants like @dollarvigilante .

OK can someone explain me this: If someone holds 1 million dollar worth of steem power today, can they give a "power down" order for only $100,000 of steem power they have, and only receive $1000 per week worth of liquid steem? Is this not an option at all?

Say, I'm a whale and I have 1 million dollars worth of steem power. Can I give an order to power down only a portion of it, like, $100,000 worth of steem power. And get liquid $1000 worth of liquid steem, per week, and keep the rest of my SP untouched for more than 2 years?

(I posted this comment before, but somehow I cannot see it, I am posting again.)

I think that's what they have done... powered down a small portion and it turned into millions

Excellent info. Trying to put myself in their shoes. Depending on how much they invested, I think I would probably pull out my initial investment. Most of these whales probably got Steem three or four decimals deep. A grand gave them a million Steem. I'm guessing. Who knows? I'm sure it's out there somewhere with the answers. Either way, I do see this site competing with other social media sites and possibly winning. All we can do is collect as many Steem as possible before the price gets out of hand. Thanks for bringing this info up.

You're welcome. I was unnecessarily panicking for a while, because I thought (wrongly) they had more options to take out less than %1 of their steem power if they wanted to. I was wrong, there is no such option.

If I had lots of steem power, I'd want to cash out some of it too.

There is nothing wrong with this picture. Even I am powering down and that isn't because I don't see a future in it. Diversifying needs to be done.