Steemit Inc Stake-Freezing Softfork Thoughts

I've been quietly listening to a variety of thoughts about the recent Soft Fork 0.22.2, and just wanted to put out there what I think about it, mainly because I seem to be in the minority.

The Ninja Mine

My position on the initial "unfairly" acquired stake ultimately boils down to being fine with it. I don't care so much about the governance by the community (although having a fully democratic 1 person, 1 vote would be interesting, but seems out of reach). I do care that there is a governance structure in place. Is it so bad that the founder has a significant portion of it? That's exactly how corporate structures are, and power can shift over time depending on ownership of company shares. I wouldn't even have cared if they decided to vote with it, especially now that the collective assets are not actually overwhelmingly dominant (I've heard the figure 20% thrown around, and with all the fuss you'd think it was >50%). The stake right now has a bit of spread now, and the distribution is improving over time, at least with respect to this Ninja mined portion.

Soft Fork

Since I'm starting from the premise that the stake in question is okay, then it's clear that I do not approve of the soft fork. But let's say I was against it. I still wouldn't approve of the soft fork.

The assets belong to Steemit Inc, and it should be theirs to power down and sell as they see fit. If we've established that voting with it isn't going to give them a mandate on all future changes, what are we doing?

Then let's go a step further, say they do have full control of the chain (are we even sure we got all of them, by the way?). Would I be okay with this hard fork, then? Say also that Steemit Inc's vision is totally unacceptable to me, and I do not want what they have the ability to force feed through. Surely that possibility warrants this move?

I still don't think it matters. If they wanted their way, they can do the clean fork themselves too. Sure, the soft fork adds more steps but it doesn't make the possibility any less real. They would have the support of the exchanges as well, being the side with more resources to boot. Either way, it would make it difficult for those that side against.

So really, what's the point? I applaud that the current consensus witnesses were able to have such a conversation and come to their own consensus to deploy this soft fork, but to me it just seems like an empty exercise.

And where was I, you ask? Too busy with real life and the occasional Steem-related maintenance to deal with the current drama. But had I been part of this discussion I would have argued similarly anyway. So I just watched from the sides. But yeah, this is how I feel at the current time.

Witness Votes

For the time being, I have adjusted my witness votes to reflect my disapproval of the soft fork. Right now it's proxied, but will probably soon set them myself as there are still those that approved the soft fork I still want as witness.

Comments 54

Nice read! It’s always interesting to hear both sides of the coin

29.02.2020 02:35

Even if I'm the first to criticize Tron and many of their moves, I share the same vision as you @eonwarped.

I'm also thinking that witnesses and some big stakeholders made this only for their own defense/benefit and not for the whole ecosystem/community. As one of the first and determined dapp developper on Steem I asked to people to join our forces all together, the result was unfortunately a discussion and a soft fork made behind closed doors without any talk with the rest of the community and the devs. I'm working for the success of Steem since 3 years now, and I learned what happened after reading some witness post.
Running the chain means that you have all the rights to do what you want and take some big decision that will impact all people there behind closed doors?

"If they wanted their way, they can do the clean fork themselves too."

That was an option (let call it SteemClassic) that I would have followed without any doubt if things were going wrong with Justin. Now I can say that I will never follow a bunch of people who are acting only for their own benefits while adding censorship to our ecosystem when it was no required at all! I have also no doubt that Justin will coax them and fire them as fast as they made this soft fork.

We, are a minority for sure, but we are not the smallest one too, and I'm not only the one to share your point of view I can guarantee that. But for many reasons it's not so easy to be against that decision, at least in appearance ;)

29.02.2020 03:02

Here is another one.

29.02.2020 03:20

Thanks for your thoughts on this issue.

That was an option that our witnesses could have chosen to, (let call it SteemClassic) and I would have followed it without any doubt if things were going wrong with Justin, as some people and myself expected

I could still follow this option also, in the worst case. Though I just don't see it happening anyway.

29.02.2020 13:51

I was right !

02.03.2020 15:11

Steem Classic may still happen yet my friend..

19.04.2020 16:32

Agree, tired of discussing it, but it's their stake and a DPOS system the agreement was weak.

A sixty person meeting and surprise hf doesn't feel good.

Only commented, because I know what you mean about unpopular opinion.

29.02.2020 03:38

Yeah, I know people are getting tired of talking about it. I've been stewing on this post for a while so just wanted to finally get it out. I think my initial version had a lot more fire in it and I took a lot out, just to focus on points I think are slightly different than what I've been reading. Yeah... That'll be for my eyes only and maybe for discord haha.

29.02.2020 13:54

This ignorant user is spreading dangerous lies in order to attempt to gain popularity and attention from the new commie overlord. Ignore the ignorant twat bag, you'll immediately feel better about your life.

03.03.2020 22:40

@eonwarped, Thank you for sharing your View Points and standing with your beliefs. I am not an expert but in my opinion Witnesses tried to take the precaution regarding Potential Concerns. Stay blessed.

Posted using Partiko Android

29.02.2020 04:09

I like it mostly because it brings drama and excitement to my life. It challenges Mr. Sun in a way I think is interesting. I wonder how he will react? I'm not gonna fully formulate an opinion until after March 6th as I think now it is too early to determine who was right or wrong.

29.02.2020 04:21

Reversible soft fork.

29.02.2020 05:29

I agree with this:

My position on the initial "unfairly" acquired stake ultimately boils down to being fine with it.

Especially since, as you say, their percentage seems to be around just 20 or 30% at this point.

Steemit got the biggest stake because Steemit took the biggest risk. That's how entrepreneurship is supposed to work. When they ran the so-called "ninja mine", whatever they were bringing in was basically worth zero, but they had already expended substantial cost and effort on development.

Frankly, with Steemit abstaining from voting, the blockchain has fallen from #3 in market cap to as low as #90 and the price fell to less than 5% of the price in July/2016. Far worse than the other top coins in existence at the time. Maybe that would all reverse direction if they were to start exercising their voice in governance and curation. Maybe not, too, but it's hard to imagine that they could cause the value to do much worse.

Anyway, like you, I've mostly stayed out of these conversations because it's clearly a minority position, but I am glad you posted this.

29.02.2020 05:38

Would like to see your witness votes not supporting the Tron puppets.

03.03.2020 21:18

I'm voting for each of the warring factions to have veto strength against the other, so I can't really do that. Sorry to disappoint.

04.03.2020 01:15

If they wanted their way, they can do the clean fork themselves too.

Its far more complex then that. Its important who does the fork, who is it that keeps the original chain. Whos is it that keeps the exchanges. The devs.

They would have the support of the exchanges as well, being the side with more resources to boot.

Thats not how it would work. Exchanges wouldnt go with it if 1 stake holder forked the chain nothing would happen. If we on the other hand hard forked we would most likely lose in that case.

Thats why a soft fork is so brilliant.

I don't care so much about the governance by the community..

Its really pointless to argue if you dont care what the stake holders have to say. Our values differ.
If i wanted "corporate control" i would have stayed away from crypto.
Also youre dismissing the fact of what said, what was agreed upon etc.

29.02.2020 09:38

Its far more complex then that

This simply isn't true. Exchanges are centralized and can decide on their own who to follow. It's likely in a clean split scenario they would allow both if both are reputable.

Also youre dismissing the fact of what said, what was agreed upon etc.

You're right, but it's not relevant to my points, which I wanted to focus on. Plenty of squabbling about who said what, so I didn't want to focus on that in this post. And as you mention, our values differ in the first place.

29.02.2020 13:49

It's likely in a clean split scenario they would allow both if both are reputable.

It depends who forks and how and what Justin would have in place at that time. The choices made by exchanges would effected by multiple factors.

Plenty of squabbling about who said what, so I didn't want to focus on that in this post.

I think Pfunk did a good breakdown on what was said and when.

29.02.2020 13:54

Actually, it also depends on exchange partnerships. They may not even want to run two exchange nodes.... So there's that too

29.02.2020 13:55

corperate control was just an example model, but hey bro lol steem and steemit was always controlled by a corporation called steemit inc Steemit always had a majority of SP, they just never really used it.

its never been "decentralized" nothing in crypto really is, its always been a situation of 30% stake owner who can outvote anyone on witnesses, i mean, ive seen the witness voting results, its a few BIG accounts like Freedom who used to vote for witness, remember? I mean, freedom chose who the witnesses were at one point.... Isnt there always one entity that makes the witness voting decisions at the end of the day?

How do you see this turning out? Do you think we will have Steem Classic emerge like ?

Anyway, just because steemit inc doesnt vote for witness, doesn't mean they cant. Dont you think its good if @justinsunsteemit starts voting for witnesses and maybe allow verified steem accounts to VOTE for what HIS steemit inc accounts vote for?

Hopefuly steemit incs power has atrophied.... and maybe, we will get to a point where justin sun just never gets around to voting for witness and the keys for steem and steemit get lost in a bureaucracy , thatd be cool if they are hands off just from natural apathy.... but id rather them USE steem and SHOW people how steemit can be used to promote tron, or any coin. I want steemit to be seen more like coindesk/cointelegraphg and its what I want to start with @newsdac i just need Staking Scot and Nitrous for or i want to use nitrous as just a site for NEWS like coindesk/cointelegraph and i REALLy see Tron as the first of many coins steemit posts will focus on.

ALSO, if steemit inc doesnt own majority share someone else will. We would all love to have a system where No one person can have over 10% lol but like EOS is showing, cartels arrise and the best way you solve this is to increase our governance and adopt Telos style system with Constitution, arbitration, steem foundation, all that.

I really want to actually have rules to prevent anyone entity from having more than a certain amount of steem, maybe 10% , maybe 4% and we can enlist a universal ID system that can emerge in the future to not PREVENt cheating completely but where we can get close enough to a fair situation..... im thinking of using a network of whitelists voted in, the opposite of the blacklists, and i really want to see steem develop its own universal ID systems

29.02.2020 21:59


29.02.2020 10:17

You can own a gun in a free society but that means you can literally shoot yourself in the foot with it.

If I bought a bunch of Euros and found the next day I couldn't spend them. I would feel there was something fundamentally wrong with the system of this money. Now how should this be different if it is Steem and @justinsuntron instead?

By undermining the social contract of your keys your coins, it casts doubt on the currency in general.

But it also has its strengths. Did you know that it is possible on the blockchain level of Steem to have accounts with multiple owner key pairs, active key pairs, and posting key pairs? I have done these things. I have done multi-signature transactions on one of the test nets.

29.02.2020 10:23

I don't think you are in the minority. Witnesses are too loud now because they are protecting their business. They should fork-off with their ideas of ownership. Everything is written on the blockchain, not some random Discord group.

29.02.2020 11:13

Maybe a Sunny boy will fork them away.

29.02.2020 17:31

Hi @eonwarped!

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Your UA account score is currently 5.786 which ranks you at #439 across all Steem accounts.
Your rank has improved 1 places in the last three days (old rank 440).

In our last Algorithmic Curation Round, consisting of 73 contributions, your post is ranked at #36.

Evaluation of your UA score:
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29.02.2020 11:26

Appreciate your engagement in the STEEM blockchain and your work on lassecash.

Stay blessed


29.02.2020 16:06

Funny to me that you “don’t care” and were “too busy with real life” ... but a week after the fact, you felt the need to share some kind of moral stance.

So really, what’s the point? To me, it just seems like an empty exercise. :)

29.02.2020 16:46

I actually agree with that, but I figured there was at least a few out there interested in my stance.

29.02.2020 17:00

And what were you doing? You are absent from steem and just come in to launch jabs, you have made it clear you REALLY dont give a fuck about steem lol u only started posting again recently after steem was in the news lol

Your $2.84 comment upvoted by @likwid now thats an empty exercise lol, 2 bucks for a comment, and you arent grateful to his post so u could make money?

just be happier, enjoy your massive steem privilege like all top steemians like you who basically get welfare from a few top accounts lol. I wish you would be happier about that welfare.... you shouldnt be ashamed of it. Steem is all privately funded (for now)

29.02.2020 22:05

Everyone who didn't invest anything seems to have the same opinion.

29.02.2020 19:14

I've invested more than I care to admit. Likely not as much as others though.

29.02.2020 19:27

Ok, sorry to hear, to me the statements made about the "pre-mine" were important in my decision to invest.

29.02.2020 21:03

steem doesnt need investors to pump and dump, it needs buyers of ads to monetize the site, it needs users, it needs businesses and services like @likwid which took peoples valuable time (I guess time is an investment too :D )

Investors just push a few buttons, users and developers who put in priceless time are giving up something much more precious. Money is cheap anyone can send money, but time development tools, like @likwid for example give steem blockchain a lot more than some flash in the pan investor. With Likwid we actually had a team spend their TIME which they cant get back and now all steemians can get likwid payouts (which really helped authors after curation went up to 50%)

So a service and development helped steem a lot more than some investor.... if we had less speculators and more value adding services like likwid we could have more businesses to buy steem not as an investment but as a utilit :)

29.02.2020 22:06

Meh, what next?

29.02.2020 23:07

For one, continuing to test the SMT testnet, and continuing to maintain Nitrous / Scotbot. And watching what comes out of the coming discussions between the decision making bodies.

29.02.2020 23:20

How are smteees!™ looking?

We gonna have to fork them, too?
IF they get open sourced.

I remember some of those witnesses that forked the chain getting a real dislike for me when I tried to tell them about stinc when they got here, but not one of them has manned up to tell me I was right.
Let alone apologize for running bots, 'because others were'.

If JS can keep from turning stinc to stunc, that would be nice.

29.02.2020 23:35

SMT's are already open source, in the steem repository. ;) . I don't know how it will interplay with the current status, but my expectation is that we'll just adopt the SMT branch and ignore the soft fork. Who knows, though.

29.02.2020 23:38

Doesn't seem to be any hurries,...

29.02.2020 23:45

I appreciate you honestly expressing your opinion, but so much of it is wrong that I wonder where to begin.

Let's start with the moral argument, then move on to the tightly related economic ones:

Steemit made a clear and unambiguous promise that the stake they mined would be used for onboarding and development of the blockchain, not for personal enrichment. Now, you probably are going to say, then how would they make any money from doing the development. Well, there's actually two ways in this case: 1) they are going to charge some overhead (e.g. salaries) for the work they do and 2) all the major devs and the larger shareholders were also "awarded" personal accounts from the ninja-mine. THIS was the stake that was supposed to represent their own interest in developing the blockchain and devoting the rest of the stake to development work.

Why did Steemit make this promise? Because they knew all the other stakeholders would have bailed out of the currency, driving the value of that huge stake to pretty much nothing. This almost happened anyways, because Ned and Dan were selling their personal stakes very rapidly at the beginning (such a sign of confidence in their coin) and the price was dropping fast until I convinced them to stop that practice for a while.

But from my point of view, even if they made the promise from the goodness of their hearts, I expect Steemit to live up to it's promise on this issue. If simple fundamental promises like this aren't going to be kept, then myself and like-minded people will stay on a chain where promises to the community matter. Other people who don't care about promises, and expect their interests are served better by baseless promotion and no integrity can leave for a fork where promise don't matter. This is OK, each group gets to operate under the rules they like best.

Ok, that pretty much summarizes the moral argument for me, let's move on to the economic one. Here I'm talking about what will be best for the price of the coin.

By voting stake, it's clear that the large investors in Steem support the Soft Fork. I've spoken to several of the largest Steem investors, who've told me they will leave the chain if it becomes a chain dominated by the stake of someone whose primary interest is Tron and not Steem. One thing you seem to be ignoring is that it is investors that support the price of a cryptocurrency and if many of the large investors leave, the price of the coin will tank.

So when you suggest that Tron can just do a clean fork and just ignore the community, I think you're ignoring key issues.

First, even if we assume Tron can get that fork listed on exchanges without any problem, something I'm not convinced of except for the special case of Poloniex, there's still the strong likelihood that the price of the coins on that fork will tank when investors leave. This will translate to a large initial trading volume, followed by a huge drop in trading volume once these investors leave (several operate as market makers as well as investors). At this point, the listing for the fork could come under pressure, because exchanges generally only want to list a coin if there's enough volume to cover the cost. And trading volume comes from investors, not from Steemit (unless it just decides to do wash trading and treat the resulting fees as an expense). You could argue that Tron will buy up a large amount of Steem to support the price, but this seems unlikely on a fork where they already have the entire Steemit ninja-mine stake.

The next question is where all the non-investors go (e.g. people who use the blockchain but don't actively buy Steem for money). What they will do is hard to predict, but if they don't go to the Tron fork, it's begins to be difficult to see what the purchase of Steemit was even for, except to get developers experienced in the Steem code base.

The Steemit stake has been a huge weight holding back the value of Steem for ages. If it had operated as promised and been devoted to development, it would have done great things for the coin.

But instead, it actually worked against the price of the coin, because it was hard for other investors to be motivated to invest in base-level Steem technology when a single stakeholder was deriving much of the benefit, but not really pulling their own weight.

It has effectively stifled third party development of the common infrastructure like API servers and the blockchain code itself. Instead, you'll see that most Steem-related development has been on dapps and other tokens (i.e. SteemEngine tokens) which allowed those developers away to profit from their work. The SPS has improved this situation somewhat, but the funds available are still small relative to the Steemit stake.

I'm finding I don't really have the time right now to see if I've rebutted all your points, but maybe someone else can take a look and address them.

I guess my final point is this: I found your attitude surprisingly defeatist for someone I took to be a cryptocurrency enthusiast. If you think one rich guy can come along and just get his way in the cryptocurrency world, it feels like you should be searching for a new area to devote your efforts if you still think there are ideals worth fighting for.

01.03.2020 01:47

Thank you for taking the time to reply. There is some information that is news to me here, but it does not change my overall stance.

Let's say we didn't soft fork. Let's say they are terrible, and we decided to do a clean fork. Would the large stakeholders not be dumping their coin and encouraging the adoption of the newer fork, based on your same analysis? The point I was trying to make is that the soft fork just seems to be unnecessary vs alternative scenarios. Am I mistaken here?

I suppose that's actually the crux of what I wanted to say.

I do want to also address the thoughts concerning the stake since we are talking about it too. My perspective is as one that came late to the party, and already impressed with what was already built. I was okay without this promise, because as you say, if they violated it, things would go south pretty quickly. There was no reason for me to believe they would self-sabatoge the value of what they built. The fact that development was slow did reflect negatively on the price as well. In any case, I don't see the difference between this and existing corporate structure and stock investment, with the same implicit contract concerning that funds be used to further develop the company strategy.

01.03.2020 02:42

Yes, there's a mistake in your thinking regarding the soft fork. There was a key reason to do do the soft fork now instead of just a hard fork later, and that is because the soft fork enabled the chain to keep the fork listed on exchanges. If either side decides to do a hardfork, they have the additional challenge of getting exchanges to upgrade to the hardfork. This is often a somewhat painful process for exchanges to do for Steem. And if it's done in an atmosphere where there's a split in the community, it's going to leave exchanges scratching their heads as to whether to support both chains, support one, or just dump them both. The soft fork prevented this problem, at least for now. So this choice of timing was for practical economic reasons.

Most of the actual work on Steem and even the front-end was done pretty much at launch or shortly thereafter. The pace of development has been glacially slow since then, partly because of poor management and partly because most of the development funds were being hoarded (I presumed for a rainy day, until I got one big dividend payment as a minority shareholder, when the proceeds of most of those Steem sales were just passed on to Steemit shareholders instead of being used for development). This is generally recognized by most people in the Steem community, and the many failed technology promises from Steemit are another of the big drags on the coin's valuation. The most recent tech manager at Steemit has done better than past tech management, but he's also been face to operate under a very restricted budget (see below for why).

I get what you're saying about the implicit contract, but here's my take on that: Steemit shareholders != Steem investors. This opened up both a potential and ultimately real misalignment of interests.

Now, if Steemit management had been good at managing marketing and software development, it was possible that the interests of these two groups could have been roughly aligned, since both groups benefited from Steem price appreciation.

And initially, I think Steemit did try to spend more on development. But due to failures in execution, they were getting less of a return in the form of Steem price appreciation than they were spending in Steem coins, and it began to look like the best thing to do from their perspective, was to sell off the coins and pocket the results as dividends (and ultimately just sell the remaining stake at a discount to a third party for cash).

01.03.2020 03:44

Ah okay, I underestimated the effort on the side of exchange adoption when it comes to forks, as well as assumptions about how they would choose. I may also have wrongly assumed that Steemit Inc would have more influence on the exchanges themselves.

About the implicit contract, I see the distinction between the two groups, but I don't see that this is all that different from the relationship between Steemit management and Steemit shareholders, the relationship between Steemit management and Steem investors. Or say, the relationship within some hierarchy in terms of shareholders of some other large company.

01.03.2020 07:09

Steemit made a clear and unambiguous promise that the stake they mined would be used for onboarding and development of the blockchain, not for personal enrichment.

Ned's Steemit made those promises not Justin Sun's Steemit. I think its wrong to expect Justin Sun to maintain promises he never made. Even with that aside, promises can get broken and that still doesn't make it right to freeze a man's stake in which he attained honestly via purchasing it. The time to fork out the ninja mine stake was long ago, its not right to fork it out after someone paid millions for it.

01.03.2020 17:42

When you buy a company as a whole, you buy it's assets and it's liabilities. It's why you should do something called "due dilegence" when you buy a company. By your logic, Justin could buy the company for $10, sell it back to ned for $10, and Steemit would still have no liability for the promise it made.

01.03.2020 19:48

Also, there's plenty of evidence that Justin's team was aware of potential liabilities of this sort: they purchased Steemit inc for much less than half the asset value of the Steemit stake.

01.03.2020 20:09

I'd like to see the legal document that your claim is based on. I keep seeing these debates with some on one side of the debate claiming Ned promised to never use the mined stake for voting ect. but I have yet to see a legal document that makes that claim true or enforceable.

Even if the claim was legally binding to the best of my knowledge Justin Sun didn't use his bought stake yet so he never broke any contract but still had his stake forked. To go even further, Justin Sun didn't mine the stake he bought it fairly and honestly. If the mined stake is getting soft forked then soft fork it all not just one persons. To soft fork someone stake directly after they bought it is a shitty thing to do. I think this was a short sighted move and I hope in the end everything works out for the best.

By your logic, Justin could buy the company for $10, sell it back to ned for $10, and Steemit would still have no liability for the promise it made.

Wrong, you may want to reread what I put again. I said Justin Sun isn't responsable for another man's promises. Ned promises would still be his own no matter how many times he sold/rebought Steemit. A legal document would obviously change my opinion on some of these things.

01.03.2020 20:24

I saw someone try to do an analysis based on contract law in a post here recently, maybe because the term "social contract" that was thrown around back then in graphene-based chains. But a legal claim would be more reasonably be based on fraud than breach-of-contract, I think. There's no need for a "legal document" in that case.

02.03.2020 06:11

It's an interesting situation. For myself (legally) I would think Justin Sun has more on his side.

Thanks for all the back and forth.

Hopefully everything works out for the best for everyone.

02.03.2020 11:49

Here's one more minority comment for moral support. :) I also share your opinion, but I moved to a position of "what's done is done" and see how on earth we find our way out of the mess (both sides, not just one of them).

01.03.2020 08:55

01.03.2020 16:04

Given that the old witnesses are no longer blocking the Steemit stake will you consider voting for more of them? I see you also voted for some of the Steemit puppet witness accounts. Is that to balance out things? My preference would be for a negotiated plan rather than one side or the other forcing things, but Justin's wishes to remove downvotes and reduce power down to 3 days would be bad for Steem.

06.03.2020 16:25

It's to balance things, aligning with my current position and wait for an actual plan. You'll note I only voted the bare minimum of the puppets.

06.03.2020 16:33

We need a diversity of witnesses. If Justin kept complete control he could do anything he likes, including blocking any account. These are tense times for Steem. Thanks for letting me know your stance.

06.03.2020 16:36