Burnpost update for SBD at 1 USD and accompanying rule improvements

smooth in #steem • 6 years ago (edited)

Since SBD has now reached 1 USD in value, @burnpost will potentially be going into "burn mode" where the rewards will be burned rather than powered up. In addition, the account will begin to power down, with the power down payments treated as incoming STEEM (rewards, donation, etc.)

However, due to the account having engaged in delegations to anti-spam initiatives, it is impossible to immediately power down (power down is incompatible with delegation; the delegation must be removed first). In addition, there has been feedback from the community that immediately destroying the value of the account is not desirable, since it removes quickly support from anti-spam initiatives (in fact, in order to power down, the delegation would need to be completely removed immediately even while the power down is ongoing) and it also removes the ability to support the SBD peg should such support be needed in the future.

For for these reason (to continue support for the anti-spam delegations, to optimize the return to Steem stakeholders, and to maintain burning/@null as the ultimate sink of all value received by the account), we will modify the rules as follows:

If SBD is trading at or below 1 USD, power down will be initiated at 25% of the SP (this requires reducing delegation first, which has a one-week delay). Upon completion of the 13-week power down cycle, if SBD is trading at or below 1 USD, it will be reset to 25% of the new SP. In effect, this applies a somewhat slower 1/52 per week power down rate instead of the maximum 1/13 per week.
The remainder of the SP balance will delegated (or, if there are no worthy delegation targets identified, unused)
Power down payments (STEEM) will treated as incoming STEEM payments (see #5 below)
Incoming SBD will be converted to STEEM using the blockchain function if SBD is trading at or below 1 USD. SBD will be sold on the internal market (buying STEEM) if SBD is trading for more than 1 USD. In either case, the resulting STEEM will be treated as incoming STEEM (see #5 below)
Incoming STEEM will be powered up if SBD is trading above 1 USD and burned (sent to @null) if SBD is trading at or below 1 USD.

The primary rule (social contract) governing the account remains this:

In no case will any coins from the account ever be sold, transferred, or powered down except to @null. Any value in the account can be considered as irrevocably allocated for burning either immediately or a some time in the future.

All rewards from this post will be sent to @burnpost as a donation which will then be traded from SBD to STEEM, powered up, and/or burned in accordance with the usual @burnpost rules. That includes SP which will be immediately sent in the form of STEEM from my own account

#experimental #burn-post

6 years ago in #steem by smooth

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lemony-cricket 6 years ago

Hey @smooth, I love what you're doing with @burnpost and though I haven't been voting it very often (I've chosen instead to positively reward others' content), I'd like to thank you for any impact this experiment may have had on SBD's fall to $1. This will be good for the platform in the long run and I hope it stays this way.

I have one question regarding the "rules" here. Why use the conversion transaction when the SBD price is below $1? Here's my understanding:

Exerting downward pressure on SBD market price is good for everyone, even if it is at $1, because it creates incentive for people (even outsiders to STEEM) to purchase SBD, bringing money into our economy.
Burning STEEM is also good for everyone, since it decreases the supply which should create an upward force on the STEEM price.

Now, I understand that on a large scale, the net effect of this difference is minimal, since STEEM is eventually being burnt either way, and it is irrational not to convert SBD below $1. However, the way things are, @burnpost does not act as a constant downward force on SBD; in fact, I think it starts acting as an upward force once it starts using the conversion transaction, since it is decreasing the total supply of SBD.

In general, I feel that since we are lacking a good downward pegging force, especially given the history of irrational valuation, I think we should be focusing on exerting as much pressure in that direction as possible, even below $1. I'd love to hear your thoughts on this.

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3 votes

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smooth 6 years ago

The intended reason for using conversion right now is to reduce the supply of SBD which is very high, resulting in reduced printing and even less downward pressure from new supply.

You raise an interesting point about lacking downward pressure. Perhaps an alternative would be holding the SBD in order to potentially sell it later, should the SBD price rise above $1. I think that could make sense if the SBD supply is already low enough that print rate is not a concern. I'll consider it.

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1 vote

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jang 6 years ago

Burn, MF, Burn!!!....:)....

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2 votes

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lunaticpandora 6 years ago

So basically? while Sbd is at or below peg, it will be used to buy steem to help maintain the peg and possibly move steem price up a bit while keeping the peg of sbd?

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smooth 6 years ago (edited)

More or less. If SBD is at or below peg, it will be converted using the blockchain function, which permanently destroys it and reduces the supply of SBD. We won't ever be buying SBD as this would result in selling STEEM onto the market (arguably contrary to the goal of serving all STEEM holders by supporting the price of STEEM via buying/locking/burning). The conversion function creates STEEM which will then be burned or powered up (never sold or spent) as dictated by the market conditions.

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2 votes

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jesse2you 6 years ago

Why not just send the sbd to dead accounts,or to new accounts...might bring back some of the huge turnover rate,or encourage people to stay with platform....
:-)
I admit I don't understand the intricacies behind this...
But from the laymans point of view,it sounds an awful lot like burning/destroying $...

Feel free to send some my way,Or maybe give it to @youarehope they can definitely use it to help others!!!!!
Namaste

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sqlinsix 6 years ago (edited)

When you burn Steem, you make it more rare, and you equally give back to all members. Think of a simple example where 1000 Steem total exist, and 90 users have 10 Steem each (1% of the supply), and 1 user has 100 Steem. If the 1 user with 100 Steem burns his Steem, this means the total supply of Steem drops to 900, meaning the each user now has more Steem of the total amount of Steem (slightly more than 1% of the supply). As Steem becomes rarer, each user owns more of a percent of the full supply.

By contrast, if you've been on here long enough, you would know that giving away Steem to users provides no value to the platform. People tend to sell everything they get, run off, and not return. What this does is create downward pressure on Steem and lowers the price.

On the peg side, I think the purpose of them burning SBD is to maintain a peg window.

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1 vote

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cryptotechnical 6 years ago

What can i do in steemit for improving reputation.

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improv 6 years ago

Post good, original content. Interact with people in a meaningful way via comments.

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layra 6 years ago

Hello @smooth, we are new to the community and your article is advanced but we will read it several times to get a better understanding. Greetings from Mexico!
@Layra

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anthonyadavisii 6 years ago (edited)

Hey @smooth, I hit you up on steem.chat but understand you're a busy person. I wanted to remind you of another anti-spam initiative that I believe is worth a delegation.

It's been my labor of love in development and I would love (and hate I guess you can say because I hate abuse. Period) to see flaggers have more of an incentive and extend our reach to higher magnitude abuse.

Even with our between 200 to 700 SP delegation we have had throughout the last 180 days, we have rewarded approaching 600 flags against abuse. Furthermore, the project is designed to address abuse that would typically fall outside of @steemcleaners scope such as video plagiarism and general voting abuse.

I know I am kind of tooting my own horn here but I think it is a damn shame that the project has such nominal delegation (even so I am extremely thankful to our delegators) respective to the proportional impact we are making on Steem. I've added numerous capabilities using Beem and intend to add more in the future. A delegation sure would help energize things though.

I really hope you will give the usage of your current delegations an evaluations and consider fitting the @steemflagrewards project into the mix.

Also, thank you for what you are doing with burnpost to help boost the price of Steem.

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smooth 6 years ago

I will consider it. Do your rules allow the account to ever upvote?

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anthonyadavisii 6 years ago (edited)

I thought I would refresh your memory and here you are refreshing mine. ;)

I think that is what it may have precluded us last time. The novelty and most prominent aspect of SteemFlagRewards is our Discord based system of upvoting flaggers. The process is as follows:

Someone finds and flags abuse. They comment and specify the category and mention @steemflagrewards.
Link to comment is dropped in the mentions channel for review by another party in which case it is slated for approval in a separate channel.
Approval command is executed and bot will calculate weight to provide a 17% flag incentive rshare bonus (of course, if the bot is able to reach that with current voting power), annotate flag in a CSV row, and store in a variable for the beneficiary post.

That's pretty much it in a nutshell.

On another note, my colleagues have requested we provision a downvote account as backup and when our higher SP associates are either unavailable or VP is exhausted.

That is the plan moving forward and even a small delegation to that account when it is created would be awesome. Let me know if you have any more questions or concerns.

Forgot to mention, I think one if the most important benefits the SFR project offers the blockchain is decentralizing of moderation. We get more users out there emboldened to flag, more eyes out there, and we will see far less abuse.

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1 vote

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dhouse 6 years ago

Does burning really do anything since Steem is inflationary? The supply is still going up and up and up every day, indefinitely.

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smooth 6 years ago (edited)

Burning makes it less inflationary (in the sense of supply increase)
We are not only burning but going direct into the market and buying (using the overpriced SBD). This should have more of a positive effect on the STEEM price. An increase in the money supply doesn't necessarily lead directly to inflation (this time, using the word in the sense of increasing prices or, equivalently, decreasing value of money). What matters more is what supply or demand for money hits the market. That is the lesson of the massive printing of money around the world since 2007 while inflation has remained modest (in some cases negative). That happened because the printed money never entered the market and stayed on the banks books as reserves.

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smooth 6 years ago

Proof of donation to @burnpost

Author reward 17.534 SBD, 43.965 STEEM and 57.857 STEEM POWER for smooth/burnpost-update-for-sbd-at-1-usd-and-accompanying-rule-improvements

Transfer 17.534 SBD to burnpost

https://steemd.com/tx/4f24f09487cecf90fe290c13ba9c16a9bcec8371

Transfer 101.822 STEEM to burnpost

https://steemd.com/tx/e04d8d2ff9b26d1891ef6616955df37373491449

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zaxan 6 years ago

Hey, Smooth! What's up? I wanted to ask you something:
Is there a method to promote a project to investors or sponsors?
Currently I am the CEO of a project called @elarca dedicated to the arts inside and outside the platform but for some reason it has been difficult to get the support or at least upvotes to help us grow as a project.

I know it's hard to want to support something but you've really been there before, if you know someone who spends their days thinking "hey! who can I reach out to?" I'd love to hear it from you.

Thank you very much.
You can read more about the project here: https://steemit.com/art/@elarca/the-ark-or-our-project-following-the-design