Above is a screenshot of the accounts owned by the Blurt Foundation and operated by members of the community. In total, there is nearly 30 million BP actively curating and distributing rewards to many different topics.
I'm going to discuss some of the positives and the negatives with this strategy and I hope a civil discussion can help to improve things in the long run.
Wide catchment and broader distribution of the reward pool.
The Good
Initiatives to make distribution of the token to a broader base of users as well as attract users who otherwise would not be getting much attention else where is a positive step.
Prior to HIVE, Steem had several curation guilds which sought to support quality content, funded directly by Steemit Inc's large stake. Without going into details, it turned out to be lacklustre and left many disappointed by the selective nature of which communities got support, and even often giving the impression of some cartel circle jerk behaviour.
With the current strategy of having a wide set of communities, we can offer people more opportunity to get some extra "support" without feeling like they need to contribute content that they are personally not very interested in just for the sake of some larger votes. (Diary games etc.)
The Bad
The problem with this strategy is we are creating a culture of reliance on the foundation's support and with it, plenty of opportunities for people in that inner circle to abuse their position. For a start, the foundation all but dilutes the curation rewards of investors who must purchase their stake. We have seen the reward pool decline drastically in the past month as more and more of these curation initiatives have popped up, and this, despite the short term pumps on the price can have longer run issues as potential investors feel as though their investments are being diluted massively.
To make it worse, the strategy assumes that investors will continue to purchase more BLURT when in actual fact, it is clear that larger group of benefactors have no incentive whatsoever to purchase BLURT and power up. Why would they if the foundation is so keen to take up such a large percentage of the active voting BP (and thus reward pool distribution) - You can do well just being an author.
In the longer run, I don't see this as sustainable. More thought needs to be placed on how to attract investors, as after-all, that is how the price will appreciate in the long run.
Diverse team of curators mean that the opinions of post value and quality are determined by more than a handful of people (or am I wrong?)
The Good
One of the great components of Steem and it's derivatives is that of proof of brain. The ability to crowd source the quality of content and let the community as a whole decide what is worth pushing up, and conversely (in the case of blurt) what should be left alone. Without a broad distribution of tokens, it is difficult to get the mass participation needed to get a reliable outcome for this process. In that respect, this is both good and bad. Good in the sense that the team of curators come from different backgrounds with different opinions, and therefore we have diversity in opinions of fundamentally subjective content. But it's also bad in the sense that it comes back to who is willing to purchase BLURT to participate as intended in this process of PoB if the barrier of entry is set SO high by the amount of power wielded by these curation teams?
A handful of curators for a single category doesn't beat a whole community, and one of the things that should be an over arching goal, is to decentralise the process as much as possible. Let Proof of Brain happen by letting people who put money where their mouth is, purchasing blurt, and doing the curation that way.
The Bad
Cartels , circle jerks and entitlement.
The story of everything we sought to escape from in the world comes back to bite us in the ass time and time again. And it is governed by the inescapable nature of human psychology, to favour taking the shortest route possible, with the least amount of resistance.
There are two groups of people that can really abuse the power they wield, and they are.. the foundation themselves and the curators.
How?
The foundation retains the curation rewards becoming the largest earner on the platform, this is despite having an already sufficiently large stake which when allocated efficiently can get some really good outcomes. I don't think the foundation needs to further monopolise their grip on the reward pool and would be better off reducing their influence and allowing organic stakeholders who purchase their BP to see a growing benefit in their influence and investment, rather than a reduction. Like I said earlier, investors are put off by their influence being diluted by the almost insurmountable of active BP being deployed by the foundation. This will cost demand in the longer run.
Curators also can be entrenched as they are now essentially wielding almost risk free money printing power with next to no skin in the game. One of the most difficult psychological barriers to overcome in platforms like blurt and steem before it, is how to act in the best interest of the chain for the future, to ensure that it thrives, instead of acting for short term gain and seeing the chain slip into a silent heart beat. Although I am not allowed to participate in discussion in the curators only discord, I have seen several curators express their entitlement to voting two of their own posts a day, regardless of their quality - as if these votes serve as some kind of payment for their services.
Now as I've already discussed, it is already questionable whether these curation initiatives need to be so big and influential in the first place, and we don't even know if it is a net positive overall - we don't need rent seeking behaviour on top of all that. Investors are put off by cartels and circle jerks of entitled people who sit on the inner circle who can get away with voting their own posts (regardless of their quality) because it is favouritism and nepotism and will give other content creators the impression of unfairness. Think about it, how would you feel if you saw these curators being favoured massively (1M BP 100% votes twice a day!) just because they can't find something that has better opportunity cost of employment elsewhere?
The fact of the matter is, curators should have the long term health and state of the platform at the forefront of their priorities, and that almost demands an altruistic approach. This brings me back full circle to the whole point of this discussion; people with skin in the game will look after things better than people with no skin in the game. I'm not naming any names, and I'm sure most curators do a decent enough job, but you only have to scroll up a bit in the curators discord to see what i'm talking about.
Where do we go from here?
So, a lot of good, and also just as much bad. What can we do to improve things? I don't have a concrete answer but here are some things I can come up with "off the cuff":
Reduce foundation curation initiatives to 500K per community
We must look at ways to balance the participation on the platform. There's no point earning a tonne of blurt if it is worth nothing. Carry on with supporting content creators, but let investors who put money to their mouth have a reason to continue to invest. If the whole 60 million BP were deployed, it would probably make up well over half of the active BP and at that point, people buying penchant amounts of BP - and I don't even mean tens of thousands, but hundreds of thousands - won't even be making much of a dent in terms of wielding their influence. Is the goal not to decentralise over time and let all the people who participate become owners?
Foundation needs more transparency and accountability.
The social graph made some posts detailing where funds were spent, and some daily blurbs on discord about updates etc. This needs to happen more often, and preferably on chain. We went through all this before on Steemit, and the experience has taught us that transparency is paramount.
The foundation already has a large enough supply to do great things. They don't need to be retaining the curation rewards from 30M BP worth of curation rewards.
The curation rewards could be burned and I believe this would be a massive positive to potential investors. The supply would be being reduced all the time, and perhaps on balance of supply and demand, we may see a whole lot more speculative buying, pushing the price up much higher (perhaps even higher than the sister chains)
Amazon started off with funding of a few hundred thousand dollars. The foundation has more than that.
In this stage of growth, everything needs to be lean to make sure maximum outcomes can come from relatively small amounts of money. A lot of good can be achieved if the way funds are spent can be carefully scrutinised for their efficacy. I believe, that given the foundations stance on being a central authority on the progression of the chain and platform, that expenditures be transparent, and that the community at least has the chance to scrutinise it.
We don't want what happened with Ned and Steemit to happen again here. The reason Steemit is left in the gallows right now, is that after all is said and done, Ned had a near zero cost basis and considered the Stinc stake to be HIS property. Now, the blurt foundation might consider the funds to be their property too, and there are no social contracts dictating what they can and what they can't do with it, but communicating and showing long term positioning will surely inspire investor confidence in the hopes that for once, one of these goddamn graphene chains might not just bleed to the bloody crypto abyss.
That is all.
Having 30 Million in Curation BLURT ensures that not too much BLURT ever ends up on the market.
If that 30,000,000 were held by others, they might power down 100% and retire in 3 months. Having it in Administration means that there won't be an exodus of BP like happened with SP after the Justin Sun issue.
So if we use the housing Bubble model to look at how Bubbles work, we can compare each 1,000,000 BP to a house. There are 400,000,000 BLURT in Circulation.
If 30,000,000 is held by the platform for curation, that means 30/400 of our housing Bubble houses are bought.
Now say I want 1,000,000 BLURT, so I buy it so I can invite friends and create my own little Curation Pool. So 369 houses left.
That may seem like a lot, but say we make a Bitcointalk.org thread, and start inviting people. Now, say in the next 2 months after the thread is made, 100,000,000 BLURT is bought by BTC, LTC, DOGE, ETH holders. 269 houses left.
So, firstly, that influx, 100,000,000 BLURT being bought, raises the price. Right now maybe $5,000 per day is spent on BLURT.
STEEM and HIVE have Millions in Daily Trade Volume, and we don't even have to scratch that amount of volume to get $1.00 BLURT.
Now, you are a Blurt blog user, earning maybe 2,000 BLURT Max on a post today, which is $20.00
You see that all of us have been buying BLURT getting 50,000 and 100,000 and 1,000,000. And it's going up to $0.10, and $0.50, and sure you are doing fine as an author, but you definitely have incentive to Buy.
And when new users join and on their first day they see it is $0.05 and $0.10 the day they join, they will have a whole different perspective from you. Some will just want to Author, but some will want more.
Losing SBD is not a loss at all.
Thread pending.
30M BP in the hands of people with skin in the game, is better than 30M BP held / controlled by people with no skin in the game. Their only skin you could argue, is another form of sweat equity in the sense that they might need to spend a few seconds going on seotools to check for plagiarism which is certainly not worth the proposed 2 lots of 100% votes from 1M BP.
Further, you are employing short time horizon thinking. There already was more than 30M Blurt in the hands of people wishing to power down. The only reason there isn't a full on exodus, is that a lot of those who powered down STEEM as a result of Justin Sun didn't get much if any BP at all.
But the biggest assumption you make which is wrong, is that there will only ever be 400M Blurt. That is wrong. The responsibility carried by stakeholders is that they have a matched say in where inflation goes to. Even if all of the BLURT in existence now were locked away and curating, there would still be the coins coming into existence from inflation to contend with, and this is the crux of the matter. Where those coins flow.
If they are reinforced by value creative productivity, then we have a positive economic feedback mechanisms. If they don't - which is basically what i'm contending - then they have negative economic feed back which is realised over time by the market valuing the token lower. Ebbs and flows aside, that remains to be seen.
You seem to have misunderstood my post, I never said BLURT was capped at 400M.
Please reread it.
And you know BLURT is not really very active yet, right? The current activity is extremely low compared to what it will be.
@kofun
Excellent ideas you threw out there.
Question is why not start the Curator’s at 100,000 BLURT? In my humble opinion, this is enough to acknowledge someone’s post whether it is a good article to read, a beautiful picture from your backyard or travel, events, etc. This will encourage community members to be more creative and even invest in our community so they can bring more BLURT value. Flooding curators up vote to an article is not a sign of success.
With “just enough curations blurt power”, the curators will be more responsible for selecting who to receive upvotes according to their respective governance/rules (if they have one).
This is a lovely article. Stay Safe and Healthy out there.
Cheers for now.
@Yehey
Hi @kofun thanks for your post, it was really well thought out and detailed. I have actually slowed down the onboarding of curation accounts and have had thoughts about reducing all to 500K BP as you mentioned. I also thank you for requesting more of the detailed expenditure posts and will try do those after the Probit and Stex listings, my focus has been exchanges at present.
Regarding the retention of curation by the foundation, the reason there is we have already given the curators a money printing machine, by giving them the curation as well would further create downward price pressure, in the hands of the foundation it can be used to fund exchange listings, market making, development and many other things and we are careful not to dump on the market, we generally place sell walls at higher prices than the current ask prices.
Thanks again for providing feedback on how you would like Blurt and the Foundation to improve.
Yes it is notable that both he and I are pretty much working at capacity at this point. That is why the team is now expanding. So please, regarding detailed statements be patient.
Rest assured, everything is entirely accurate.
This is good. While other people seem content with taking aspects of how Steem operated and applying it to BLURT, I think being transparent is the key to all of that. There is nothing wrong with being financially motivated -- that's how the world works -- but communicating that to investors is how you build a strong relationship with the existing ones, and new ones to come. The long game will pay dividends.
The amount of coins coming into circulation is programmatically determined by the emission schedule. Inflation is going to happen regardless, but in this case, you assume that there will be a negative effect on price as more of it will be diverted to people with the intention to sell, and do so not in the fashion you described the foundation would sell.
A couple of things to note here:
Coins needing to be sold by foundation to fund things are better met with bids, sooner rather than later. Delayed deployment of resources (in this case, putting resting orders instead of market orders) mean that it takes an unknown amount of time to realise objectives with the capital. Capital not deployed for things like exchange listings, development etc. mean progress is delayed. The coins eventually will be bought anyway, but the time frame gives investors no assurance, the only difference to the foundation is how much more (or less) needs to be sold to reach the fund raising objectives. But then again, having tens of millions of coins has it perks in that you don't have to worry so much about that. Also, you can place sell orders further down the asks to get the orders matched quicker without speculating on 30% price rises.
Market making is first and foremost, providing liquidity. The MM gets compensated by making the difference in the spread between the bid and asks. There is a liquidity crunch right now because a very significant amount of blurt is locked up by exchanges (binance, huobi, bithumb, bittrex, upbit) and it is unknown if they will be releasing those funds. So aside from the big question mark of whether those coins should be considered lost, there is simply not enough sellers to instigate big price rises. I look at the books as an investor, and see next to no liquidity, I'm certainly not going to bid up the prices if all it does is make me pay a 50% price premium before I pick up any real amount of coin.
Demand will determine how much can be sold with minimal slippage which is why I think, more emphasis should be put on appeasing investors who will ultimately be how anyone realises any value with the blurt they earn / hold.
I haven't done the sums, but I may decide to look into it, but I believe the accounts the foundation run make up more than 50% of the active voting BP. You speak of funds being better in the hands of the foundation, when you already hold a vast majority balance. You don't need to also dilute the influence of people buying in with outside money, by such a large amount to reach the same objectives.
Right now, it looks like two things to an outside investor.
I appreciate your acknowledgement and consideration of reducing curation accounts to 500k. I believe just as the foundation refuses to sell below a certain price, the amount of active BP deployed should also not exceed a certain threshold (No more than say 30% of the active BP). This would definitely strike a better balance between the different participants on the chain (authors and investors)!
Would you be able to find out from me how much active BP there is?
As jacob said, he and I are operating at capacity, but will do my best to provide announcements and expenditure statements, also want to do some marketmaking, if you know of anyone that can help us code a bot to market make on exchange apis please send them my way.
You made one error only and I wish to correct it. The value of the shart is entirely notional.
Will give more color on this in a moment.
First of all thank you for presenting a beautiful and constructive article. As easy as I read the article, I know it was not easy for you to present it like this.
Although in each case you have presented your own point of view, it is good that Blurt is moving forward and discussing his growth. As a curator, I consider it from a positive point of view.
No, I don't think it would be much better to control the rewards by reducing the power of the community. Because the community is growing tremendously and the number of its users is also increasing. So it is important to give good rewards to those who are skillfully expressing their abilities and presenting their feelings nicely. Because if we can’t hold on to their enthusiasm and interest, good and skilled writers won’t find inspiration.
It is also important to note that the community's curators are not simply giving support or rewards to anyone, but everyone is aware of this and is trying to encourage more quality writing.
Have a Good Day!
@hafizullah
All the abuse cases you showed in your article, are a real danger. Already in 2016 on the Steem, there have been a lot of so called curators, guiding most of the whale votes into their own pockets. As I know today, 4 years later, the people really doesn't become much more better in character. But they are much more experienced in cheating the communities. We should pay a lot of attention what all these curators are doing. And in my opinion all the controlling work is not worth the positive effects this curation trails have.
I think we need a broader diversified content on BLURT. For an example, I don't see much content on Anime. Many of the tribes and communities on STEEM/HIVE were built by focusing on a very specific niche. It's easy to say and hard to deliver on these collection of niche content.
Actively looking for new niches being formed and supporting them with smaller accounts with 50K - 100K BP accounts could be a good move. We can also encourage other cryptocurrency projects to use BLURT as their own personal Reddit/Forum.
@khaleelkazi worte a great post on content diversification: https://leofinance.io/hive-167922/@khaleelkazi/the-case-for-diversified-content-on-leofinance
Wow! How come you only have 1 follower!
You can have me as your follower #2
This is not true and a misperception. Please read this recent post.
Also, show me these investors. What do they look like? What would they do with their investment?
Let me reframe my statement.
The reward pool will reach an equilibrium where it fills and drains at the same rate regardless of the foundations curation activities.
How much of the active BP does the foundation currently take up?
If they take up a very significant majority, anything over 50%, are they not competing with the interests of subsequent, or other existing stakeholders who are active with their BP?
If so, then does it not follow that increasing influence from the foundation negates the interests of other stake holders?
How much influence would a stake holder holding 1M BP have if the foundation refrained from exercising their BP, vs the current situation.
The foundation is not the regent account, but the regent account has been designed to not affect circulating supply, inflation or the reward pool. That signals that the intention is to let community members fulfil the role. How can that happen when the community active BP pales in comparison to the active BP deployed by the foundation?
This is an interesting statement too because to me, it is the dichotomy of central intervention vs businessman knows best. I believe that over time, with the right levers to pull, the market will prevail at pricing and valuing content, much much better than a handful of people wielding the majority of active voting power.
You ask me about what "investors" .. well i'm right here. I'm one of them. I want to buy into something that shares common ideology with what I believe in. I want to know that there is a point to purchasing a significant stake of BLURT, and that it economically makes sense to me. I don't want to buy say a million blurt, only for 2 million addition BP to come online from the foundation, and god knows how much more after that. I think a lot of people who wishing to deploy larger sums will feel the same, and this is the point of my post.
Not true. The reward pool can go up as well as down depending on overall voting activity.
What does "come online" mean?
Again, what would you do with your 1 mil BLURT?
Come online means to become active.
The overall size of the reward pool doesn't concern me. It's the relative influence. Are you suggesting that should I purchase 1M BP, and the foundation deploys another 30M BP, that my relative influence (able to reward users won't be diminished substantially?)
Which brings me to my answer to your question - which by the way, feels like a jab at any investor (and that is slightly concerning)
What would I do with my stake?
I would build a dapp business and attempt to onboard/attract/retain users by using it to reward their contributions on that dapp. As a matter of fact, I already have an idea and a working mvp, but I am deciding which of the 3 chains to deploy it to.
How much influence my stake can wield matters to me, because my interests lie in being able to capture a share of users. If the amount that I can reward my users decreases due to the foundation monopolising the active voting BP, then it is less attractive to me.
Exactly! We're nearly at the core issue now.
But imagine 10 other investors, all like you, with 1 mil BLURT each; are you not all diluting each other's share of rewards or users?
And yet you are also all creating value, for yourselves and your users.
At the moment, the reward yield on staked BLURT is higher than the coin-minting rate, hence with judicious compounding one can actually gain a larger slice even as new investors join - or existing coins are vested.
If and when the economy is running at full capacity, that will fall, but I have never seen that on either Steem or Hive. One hopes that such a vibrant economy would result in a much higher coin price.
I don't think we're at disagreement here. But your example hammers at the crux of the issue.
10 other users with 1M each (purchased no less) would be far preferable to the foundation deploying 30M to a handful of people with near zero skin in the game.
Unlike those with BLURT/BP that they have not purchased, those who paid for their influence have skin in the game. And this is why I discussed the foundation curation accounts alongside the ad-hoc curation initiatives run by people who have publicly defended acting in what I consider a negative way (entitlement to two full votes on their own posts).
If people who have skin in the game can also damage their investment by acting overly selfish for short term gain, then surely those with even less skin in the game should be held accountable and scrutinised?
Another perspective worth considering:
If I have a working product, and my aim is to attract, onboard, and retain as many users as possible, then why wouldn't I approach the foundation for "support" instead of just buying the influence myself? Because that is the message that is being signalled right now.
Again, I have answered your questions, and you have answered none of mine.
How much active BP is there, and what percentage of that is the foundation?
Like I mentioned in my post, I am not against deploying foundation funds to encourage activity - quite the opposite - I simply want it to be a little bit at a time, and overall, not more than 50% of the active voting stake.
I cannot speak for the foundation, and I see they have already given some replies. I was really just interested in the economic assumptions. It helps me understand what features people expect and how best to create a more flexible and responsive economic system for Blurt.
@kofun Thanks for the thoughtful post!
Personally I would have to agree with your 3 asks 1) Reduce foundation curation initiatives to 500K 2) Improve transparency. While I view the foundation as being a transparent group , I do believe there is almost always room for improvement. Perhaps even in the form of more frequent "official" updates. 3) Burn foundation curation rewards. This thought has crossed my mind, as I do believe this would instill more confidence in stake holders, and potential investors.
Feel free to connect with me in Blurt Discord..