It’s been a few weeks since Steem’s 21st (and 22nd) hard forks were implemented and it appears that the Economic Improvement Proposal (EIP) may be working as intended...possibly with better results than expected.
For most of the past 2.5 years, I had advocated a more-than-linear post reward curve and 50/50 author and curator rewards. I made some economic assumptions in a post back on July 1st regarding the EIP.
The Combined Effects of the EIP
The convergent linear rewards curve should direct more rewards to higher-quality content and reduce rewards to lower-quality content. This would reduce the incentive to produce low-quality content, thereby reducing the number of overall content to be ranked and rewarded by curators. Those curators could then more easily discover higher-quality content and/or rank more content with both their upvotes and downvotes than they could have ranked previously.
The competition for the increased curation rewards should further help with the discovery of both high-quality content and new content creators. The rewards that are kept in the pool from not being allocated to low-quality posts due to the convergent linear reward curve and the rewards that are redistributed due to the free downvote pool should find their way to these higher-quality content creators and their content. As a result, those content creators with proficient social media skills should benefit from increased attention and a higher share of daily rewards.
As higher-quality content and users with better networking skills are pushed up the ranks, the most popular and “featured” content on the various Steem interfaces should attract more viewers and more interest from additional potential quality contributors to the ecosystem. In turn, this should attract at least some additional interest in the STEEM currency and entice more people to purchase STEEM and participate in the content rewards system, thereby increasing upward price pressure on STEEM.
Other possible effects of the protocol changes could include the following:
• Reduced use of bid bots due to both the non-linear to linear threshold and the free downvote pool. Bid bot use would likely/mostly be used only by those with higher-quality content to promote that is less likely to be downvoted for being over-rewarded.
• Delegations to bid bots and other automated services may be returned to the original stakeholders and used for manual curating.
• Additional purchasing of STEEM may occur in order to take advantage of staking in SP and earning better returns from curation rewards, which would further increase upward price pressure on STEEM.
Since the hard fork, we’re seeing much of this playing out as predicted.
Bid bot use has declined (particularly on low-quality posts) as delegators have withdrawn their delegations, vote buyers have reduced their buying, and users have been downvoting those posts with bought votes – as they perceive many of the posts as being over-rewarded.
Spammers and “exploiters” have had their post rewards wrangled in as more users are participating in downvoting the low-value content, thereby helping to normalize downvoting and redistribute rewards to posts that are perceived as having a higher quality.
Larger stakeholders have returned to prior manual curation practices and are again supporting/supplementing other manual curators and voting trails.
Over the past few weeks, we’re even seeing more STEEM being withdrawn from exchanges and powered up than STEEM being powered down and sent to exchanges.
While it may be too soon to claim that the EIP in HF21 has been a wild success, we can certainly say that behavior and reward distribution has perceptibly improved.
Regular bloggers are benefiting from the changes
These are some rewards statistics for three users that I’ve known, followed, or curated on Steem for a long time, which I have randomly chosen as a sample. The rewards do not include curation rewards earned by these users for the posts that have been calculated.
Pre-HF21 is the average post rewards for the time period before HF21 (two weeks for the first two users and one month for the third)
Post HF21 is the average post rewards for the time period since HF21 for posts that have already paid out.
Gross Difference is the difference of the total average payouts between the two time frames.
Net Post Reward is the difference between payouts after curation rewards have been subtracted, using a simple 75% and 50% author reward percentage for the two time frames.
|User Name||Pre HF21||Post HF21||Gross Difference||Net Post Reward|
17 posts paid out prior to HF21 = $63.40 (2 weeks)
17 posts paid out since HF21 = $83.12
25 posts paid out prior to HF21 = $102.44 (2 weeks)
16 posts paid out since HF21 = $110.67
22 posts paid out prior to HF21 = $138.84 (4 weeks)
11 posts paid out since HF21 = $401.01
The net post rewards earned by @freebornangel since HF21 for posts that have already paid out have declined by 12.5% from the two weeks prior. However, the most recent trend in their post rewards is up, with an average pending post payout near $7 for the past week, which is more than $2 above the prior two week average. This would represent a 25% increase in the average net post rewards from the two weeks prior to HF21.
The net post rewards earned by @old-guy-photos since HF21 for posts that have already paid out have increased by 12.3% from the two weeks prior.
The net post rewards earned by @nonameslefttouse since HF21 for posts that have already paid out have increased by 285.41% from the one month prior.
As stated above, these net totals do not include the 100% increase in curation rewards since HF21.
There is another statistic that needs to be pointed out...
The people who chose to leave Steem because they refused to listen to those offering actual economic theory and/or analysis of the proposed code changes – and who believed that all authors would suffer from “stakeholder abuse” of the improved curation incentives – have had a 0% chance of increasing their rewards.
Instead of giving the revised economic protocols a chance to work, they vilified anyone advocating for them and/or proclaimed that Steem would be forever broken...and then left with their own versions of rage-quit posts and comments. I hope that those who have remained or that those who have recently joined Steem learn a valuable lesson from this.
I also hope that the recent behavioral changes and trends continue so that we may continue to improve the overall quality and atmosphere of the platform.