Hello and welcome to the brand new steemzine!
The idea for the Orconomist came to me while curating posts for the Spotlight, looking through and reading so many posts, led me to realise two major things. Firstly, that there are a lot of content producers and curators, who could be making more money with just a bit of guidance.
The second thing I realised, is that there are a lot of really knowledgeable Steemians out there, especially in the areas of trading and finance, and this is of direct value to Steemit inc.
The name was settled upon because of the fact that as Steemit gets more succesful, more Whales will divest their interests, meaning that it is the Orcas who will inherit the landscape of Steemit.
So without further ado; please enjoy the first edition of The Orconomist - Making Waves In A Sea Of Steem
For you ultra busy Steemsters, please try out my fully clickable contents page and skip to any and every part of the steemzine.
Enjoy!
Contents
Market Forces @hisnameisolllie talks to the Orconomist about liquidity rewards, and ideas for fixing the internal market.
What Smells And What Sells (#smells) - A Guide To Profitable Articles On Steemit
Special Feature - Jam On It - An interview with @jamtaylor and a look at the Photo Challenge and his latest photo project.
The Residual Project - A new initiative attempting to create a residual income from old posts, for content producers and curators alike.
Market Forces
One of the unique and innovative features of the Steemit website, is the internal market, where you can trade the Steem/Steem Backed Dollars (STM/SBD) pair.
So it is of some concern that the volume on the internal market has been poor. Put in plain English, there aren't very many people who are buying and selling their Steem on the internal market. This is clearly because there is such a gap between the internal and external price of SBD and STM.
At this point I am going to introduce @hisnameisolllie; for those of you who have not come across him yet, Ollie is an oil trader and has extensive knowledge in trading commodities and cryptocurrency. Ollie has done what many others have set out to do, and failed, he has made sense of the more technical bits of the Steemit whitepaper.
I absolutely urge you to read his excellent article: How to Improve the Internal Market - Steem/SBD - With Better/Fairer Liquidity Rewards and Implied Prices...
In the article @hisnameisolllie, explains the mechanics of liquidity rewards, and why we need them, he puts an extremely compelling case, and I for one, hope that the "powers that be", listen to his sage advice.
Interview Between @cryptogee & @hisnameisolllie - Fixing The Market
Cg - Hi Ollie, thanks for speaking in the Orconomist, today you are going to give us the lowdown on market forces, and how best to fix the internal market. I also want to pick up on some points you made in your original article on the subject, and to hear any fresh ideas you have regarding trading Steem.
HNO - Thanks for inviting me @cryptogee. Happy to contribute my opinion and knowledge where I can. I know there are users who both agree, and disagree with my stance on this topic, so I’m always willing to open a dialog on this issue.
Cg - I think an open dialog would indeed be very helpful; let's hope we get that soon.
Internal Market Feed
In your article, you say; "there is a big benefit to having a fully functioning internal market on Steemit.". What exactly is the benefit in having an internal market, and how does this effect the average Steemian?
HNO - There has been one post which I have referenced more than any in my time on Steemit, [@dan's article] Steemit’s Evil Plan for Cryptocurrency World Domination. This set out the vision for Steem(it)’s future, and really opened my eye’s to what was actually trying to be achieved here.
The first phase set out by @dan was to Bootstrap a Stable Currency - The Steem Dollar. Now, to this end, the Steem Dollar is doing ok in my opinion. We have seen it as high as $1.50 and as low as $0.70 (in $USD terms), however considering where Steemit is, and where it has come from, that’s pretty stable in the world of crypto.
However stability and circulation go hand in hand. True value is found when an asset changes hands as many times as possible in as short a time period as possible. Having a well function internal market would allow users to transact Steem for SBD and SBD for Steem, for zero fee’s, whilst keeping both Steem and SBD on the Steemit Platform. Promoting both Circulation and Stability.
Cg - You say in your article, that at one point, the internal market was trading at $100,000 per day, and now we barely hit $1000 in a day; do you see the freezing of liquidity rewards as the reason for this decline?
HNO - Yes, however it is worth pointing out that, the $100,000 per day volume wasn’t necessarily ‘real’. This will be touched on later, however, I will say briefly, the old liquidity rewards system was based on users working large orders on market for more than 1min. Then buying or selling them to themselves to hopefully achieve the biggest volume, and therefore get all of the rewards.
I can say with a level of certainty, that ’real’ was higher than it is now, but it was certainly nowhere near $100,000. We actually did close to $1m at one point.
Steem Price
Cg - Do you believe that the price of Steem has been falling due to the weakness of the internal market?
HNO - No, I don’t think so. The weakness in the price of Steem has been caused by, the Steem market overheating like many cryptocurrency projects do in the early days, but mostly because Liquid Steem is increasing at a rapid rate. Liquid Steem has gone from 3m to over 7m in a seven week period.
The internal market I believe could have supported Steem and Steem Dollar prices slightly, as it could have lead to user holding more Steem and SBD on Steemit, rather than transferring to an external exchange to be sold for BTC. That being said, a significant price fall would have happened regardless..
Cg - You cite Wash Trading, the practice of buying and selling from and to yourself, as a "highly illegal practice", that is banned on exchanges worldwide. I'm imagining the practice is policed using software; do you see any problems implementing such software on the Steemit platform?
HNO - I don’t think putting in those kind of measures would be necessary. In the crypto world, we are all striving for a system where regulation is not needed. In this case, the problem was that users were being incentivised to take part in this behaviour (from the liquidity rewards themselves).
Get rid of the incentive (and, if I had my way, put in place a different incentive for which we will all benefit) this behaviour wouldn’t happen. This behaviour doesn’t happen now the liquidity rewards in there old form were suspended.
The reason it is illegal in financial markets, is because it’s a form of market manipulation. Traders can make it look like [an asset is] trading at a certain price, when in fact it might not be, which may impact other people's decisions.
This was how users pursuing liquidity rewards were gamifying the system.
Cg - You also talk of an implied price of Steem/SBD on the internal exchange; if possible, can you break it down in ways that a 10 year old could understand; and explain to our readers, what the implied price is, and how that can help Steemit?
HNO - Sure. I would caveat this by stating that, this would be a nightmare to implement, but it is possible. The [explain it like a] 10 year old request is pretty difficult because I’m too close to this topic, as I'm playing around with implied prices in financial markets every day.
But I will try my best.. However I will happily post a more detailed explanation of how this might work, so let me know.
OK, here goes; there is no Steem/SBD market on External Exchanges. There is a market for Steem/BTC and SBD/BTC however. This means you can change Steem to SBD (or visa versa) in 2 transactions
The external exchanges are thus creating an implied price for Steem/SBD, through the other 2 markets. We could set an algorithm up which would create a live spread on Steemit’s internal market, which is implied from the 2 external markets.
Let’s just say you buy implied Steem/SBD on the internal exchange. It would appear to be a normal transaction on the surface. But under the hood, the algorithm would Sell SBD for BTC, and then Sell BTC for Steem.
There are numerous problems (security, trading costs, etc…), and also solution to these problems, which I won’t get into right now, however it is possible.
Liquidity Rewards Reintroduction
Cg - Finally, could you tell us how you believe the liquidity rewards system should be tweaked, and also what other features would you implement to help fix the market?
HNO - Sure, rather than giving a numerical response, I will talk in terms of the general rules which I believe would solve the previous problems.
I believe that, Liquidity Rewards should be a Function of how tight users are making the Steem/SBD spread, over what time period they are doing this, and what volume user are putting into the market and where.
There is also value in having volume depth in a market. I believe that, all orders within X% of last traded price should receive a reward (have it be, a much smaller reward than the orders on market) I don't think that Liquidity Rewards should be a function of the trading volume these users are doing (this would stop pointless wash trading, and make the volume ‘real’).
I also think that, rewards should be spread out on a contribution basis, and not rewarded to the number 1 provider. I think they should be paid out on a 24hr rolling period. This will allow certain users to provide liquidity for Xperiod per day, knowing they will get a share of Liqidity Rewards Pot at the end of the cycle.
in my experience this would bring the internal market back to life, and let it serve a valuable purpose to the Steemit community moving forward.
Cg - Wow! I would love to see that implemented on Steemit, I think it would provide an entertaining "game" for Steemsters to take part in, which would benefit us all!
Right, when I said finally, I actually meant one more question! On a lighter note, while searching for your articles to refresh my memory on your point of view, I noticed that your name has 3 Ls in it; what's the deal with that; did you typo your own name?!
HNO - Ha! No I didn't. It's because my friend, @wingz, usually uses the user name; hisnameisollie; so when I saw he used the @wingz username, I decided to make a Steemit account using the name, however I changed it to 3 'L's. Not to troll him or anything, just for a laugh, it amuses me to see me reply to him with this name, a bit of silly fun.
However I didn't actually expect to be posting much; otherwise I might not have been so frivolous in my choice of username...
Cg - Aha! Thanks for clearing that up, it will help people if they try and search for you on the site. What's more, thank you @hisnameisolllie for giving this interview. Hopefully we can pass on your recommendations on to @ned, @dan and the rest of the team, and they will at least consider implementing them, so that we can fix our market and move onwards and upwards!
HNO - Thanks for inviting me to speak to the Orconomist @cryptogee. One final note from me. I agree with the decision to stop liquidity rewards in their old form. The system was broken, too generous and unfair. I just think that, with some small changes, we can bring the internal market back to life to help us move forward and achieve Steemit World Domination
Cg - You are very welcome, and you have left me and hopefully our readers feeling very positive about the internal market, and the future of Steemit as a whole!
I would welcome @ned and @dan, and/or any of the Steemit dev team to reply to @hisnameisolllie's suggestions for liquidity rewards. In my mind, they seem balanced and well thought out; and I believe that they will help the team do what they were trying to achieve, when they implemented the rewards in the first place.
Summary
Liquidity rewards are a valid tool used to create a market around an asset.
The Steem liquidity rewards were abused by traders buying and selling to themselves (wash trading); however this was due to the structure of the rewards. The rewards in themselves; are not a bad thing.
It was the correct decision to end the liquidity rewards,in the form they were in.
Liquidity rewards should not reward volume, rather they should support traders adding true value to the market; such as volume in depth.
Whilst it isn't easy, it is possible to create an implied price on the external market, which may contribute to the stability of the external price of Steem.
The Steem liquidity rewards need to be reintroduced, in the form of a Liquidity Rewards Pot, to whit traders supply liquidity share in a daily pot.
What Smells And What Sells - A Guide To Profitable Articles On Steemit
Way back in the dusty annuls of pre-July 4th, Steemit history; I wrote a little article entitled; Steemit Will Not Be The New Facebook.
What prompted me to write the post, was that I had seen more and more comments talking about how Steemit was going to be bigger than Facebook. This in itself, may one day be true; however that wasn't the point. Along with these comments, I kept seeing other comparisons to Facebook.
I realised while reading these comments, that a lot of people hadn't realised that Steemit and Facebook are two very different environments; and will remain so, regardless of the fortunes of either platform.
My main point in the article was that there are things that I would post on Facebook that I wouldn't dream of posting on here. Likewise, I can't think of a single one of my Steemit posts in the last 2 months, that I'd put on Facebook.
Therefore, if you do care about your author rewards, you will cut out the Facebooky type posts and save those for... well, Facebook.
It does still have its advantages, I use Facebook as a kind of live address book and events diary, and of course, to post, anytime I have an urge to post something frivolous.
So without further ado, let's look at what sells, and what smells.
What Smells
Political Pulp
If you were to post an article on Facebook, calling Donald Trump the Messiah, and the answer to not just America's problems, but those of the world too. You would most likely elicit many, many responses to your post, the type of response, would be determined by your own political persuasion.
If you are a dyed-in-the-wool, Democrat, then your post will get flooded by angry face emojis and incredulous comments from your Facebook "friends". If you're a Republican you'll get exactly the opposite, lots of likes and, hell yeahs!
This is because, the Facebook algorithm has had billions of dollars invested into it; and it is really good, stupidly good, at making sure that you are surrounded by people who agree with you. That's why we can see the two articles below, made nothing, and got very few replies.
Once you're out into the real world of Steemit releasing Trump/Clinton articles, you are much more likely to get a response of "meh", over any other kind.
You can spot political pulp articles by their provokotive titles, focusing on current events, basically, ask yourself if the article you're about to write would make all your FB friends, either agree or disagree with you.
If you answer yes to either of those questions, you are probably about to write a political pulp article, if you feel you would get a mixed response on Facebook, then you're getting closer.
Of course if it's the type of article that sets the Facebook tumbleweeds blowing in the cyberwind, and you get no response at all. Well, now you're talking! That's as far from political pulp as you can get, you're ready to, submit post.
Random Witticisms
We all have those erroneous thoughts that pop into our lovely little noggins every now and again, you might suddenly have a great idea for a cat hang glider, that you simply have to tell everyone about. You don't even want any money for your idea, you just want to benefit society.
Or perhaps you realise there should be a word for the disappointment you feel, when you think of an old tune you once loved, so you decide to search for it on Youtube; and then discover it's a really lame song, like really lame; shockingly lame.
Don't make a post from those thoughts; do what I do, and go onto Facebook and make that post; you'll get a much more satisfying response, in the shape of likes, LoLs, and comments. By the way, the second one is a real thought that came to me the other day whilst searching for a song I used to like. I found it, hated it, and posted on Facebook.
These are easy to spot; unless you can make at least a 750 word article with it; it ain't gonna fly on Steemit. By the way, don't take this as me saying you shouldn't have fun. I sometimes reply to random thought posts, however they tend to be from people I have befriended here, which if you think about it, is kind of Facebooky!
Current Affairs Reportage
There is a difference between political pulp reporting and serious current affairs reportage; however that difference is not appreciated on Steemit.
Perhaps it has something to do with the fact that this kind of post relies heavily on outside sources; or maybe because they are stories that are already all over the media. For whatever reason, stories about recent natural disasters, public figures dying, or planes crashing, just don't cut the Steemit mustard.
So the next really important news event that comes along, that you feel really strongly about; go onto Facebook and vent at your friends.
Sports Posts
What, hang on, no, wait... huh!?!
I know right? This one is the elephant in the room, so much so that I'm going to shout out this next question: #### WHY THE HELL HASN'T THE SPORTS TAG TAKEN OFF?????????
Each question mark represents a, by-order-of-magnitude, increase on the @cryptogee incredulity scale; I simply don't get it. I had a theory as to why the sports tag hadn't taken off before July 4th, I felt that the small community where mainly into cryptocurrency and more tekky stuff. I felt that would change with a larger user base. However now, I must say I'm truly stumped.
People like @nanzo-scoop are valiantly fighting on, and trying to bring their passion for sport to Steemit. Surely at some point it will take off; sport is all pervasive in reach and type. So why haven't there been big sports payouts? (Pro hockey player excluding).
Perhaps it is because of what I mention above regarding current affairs reporting, maybe the same guiding principles have wittingly or unwittingly worked their way into the world of sport. However, regardless of the reasons, when it comes down to it, this is an unpopular category; and I'm not just talking about the Whales. Sporting posts tend to get a low number of votes all round, so until the mystery is solved, if you specifically want to maximise your article's earning potential. Don't write about sports.
Of course if you couldn't give two figs how much your article makes and you just want to write about sport, go for it, hell, I'll vote for you.
Steemit
Yes, yes, I know; give me a second; I know that the Steemit tag has generated around 1.3 million SBD, however most of that was in the old days.
Now if you go to the Steemit tag you will only see very specialised posts there, or; rather annoyingly, posts that have nothing to do with the platform. This is because their creators wrongly believe that adding a Steemit tag will earn them more money; it won't.
So unless you are a developer, or you have made some kind of collaboration with the Steemit HQ, or you are starting a curation project or competition. Or perhaps you have created a magazine of interest (wink, wink), then go ahead, put it in Steemit.
What Sells
Now, I could make this section really short, and simply tell you that art, photography and life, are the biggest trenders, so go and write in those. I could also just give you this link of tags, which you could easily obtain yourself, by exerting a few extra micro calories, to move your mouse pointer; but I won't.
Doing that is of no value to you, and it is of no value to people like myself who want to see the platform grow, so instead, let's look at some of the trends that aren't doing so well at the moment, but have shown that they are winning subjects that attract plenty of votes.
Politics
Wait a minute; I thought you said...??
Yes above I told you to stay away from political pulp and reportage; however, political theory and philosophy; that's an alltogether different ballgame.
There have been many well thought out political posts made; the good ones usually state a point of view, and then attempt to defend that point. They tend to elicit great debate, and often spark off reply articles; from users who have too much to say to reply in the comment section.
The main tip with these, is to make sure they go somewhere, don't just state a political point of view and bang on about it. Tie it in with your experience and observation; if you can link it back to the blockchain and decentralisation, even better.
Story
This is a tag that comes in and out of vogue with Steemsters. A well rewarded post in this category is usually all it takes to get this category going again.
The only thing I would ask you to remember, is to add writing and creativewriting, and then perhaps what genre your story is. So your tags may end up looking like:
story romance writing creativewriting
Film/Movies/Cinema
This is another populist subject that has struggled to make real headway on the site; however with more users joining our jolly family, it won't be long before film is making waves in a sea of Steem.
The obvious way to post in this category is via a review; however bear in mind, that reviews can get very dreary; and often a reader might just check the start and end to get the gist of what is being said about the film in question.
The trick here is to be different, funny is always good; but not everyone is a comedian, so if jokes don't come naturally to you, then try and find some other way to snazz up your review.
Personally, when I read reviews; I like to know what the favourite films of the reviewer are; and maybe what films they've been to see recently. This is so that I can gauge whether we're on the same cinematic level or not; which in turn, tells me whether I should pay attention to the reviewer.
For more tips on how to review films, read @justinlaak's hilarious post How to Review Movies Like a Pro
As before, make sure you pay attention to the tags you use, I would suggest something along the lines of:
filmreviews actionadventure moviereviews movies film
Special Feature - Jam On It
@jamtaylor's project the Steemit Photo Challenge is one of the longest running projects on Steemit, there have been thousands of entries, and it has raised the profile of many Steemsters. The competition format is very simple; enter photographs on a certain theme, along with proof that you took it, and get a chance to win some Steem Dollars.
More than the actual rewards, this project is great for 2 main reasons. Firstly, it has increased the reputation of @jamtaylor. A lot of people quite rightly so; see him as the "go to guy", when it comes to photography on Steemit. Secondly the photo challenge has improved the quality of Steemit, and for that, we really should be grateful to Jam.
I spoke briefly with @jamtaylor to find out more about the Steemit Photo Challenge, and his plans for the future.
Cg - What inspired you to start the challenge; do you have a photography background?
JT - The first SPC was completely spur of the moment. In the first post I mentioned that “The point is to generate more content for the photography tag and [attract more] interaction on the posts.”
I don’t have a professional photography background but I’ve been dabbling since I got my first point and shoot for Christmas 2003. I think it was a 3.2MP Sony Cybershot. I just thought it would be cool to get together with photographers to have a little fun. I had not planned to include prizes, just a fun community event that people could interact with and share work around a theme.
Cg You have been doing this since the early days of Steemit; did you expect it to run for so long?
I expected people to get sick of them, to be honest. But with the continued support of the community, working closely with @berniesanders and others, I intend to keep it going for some time. We’re coming up to No. 10 and have a special prize giveaway lined up
Cg - Which entry has been your favourite so far?
That’s a really tough one. I suppose the very first one is the one I remember the clearest since it was all new and exciting and the image just stood out to me. I’m talking about @sharker’s monkey entry
Cg - I see that you have just started a new project; can you tell us a little bit about that?
The Viewfinder Steemzine is a project that I’ve been thinking about for a few weeks as a way to further the goals of the SPC while experimenting with a new method and format. Plus, it’s fun, creates and distributes value to others, and is a way to generate a bit of side-income for myself. “Mutual self-interest” is a term that I learned early on Steemit from @dan, and it stuck with me.
Cg - Do you see the The Viewfinder Steemzine eventually taking the place of the Photo Challenge?
JT - I haven’t really given that much thought, it remains to be seen how successful the Viewfinder will be. I’ve already got some support from high value account holders and expect that more will support it because of the stated goals and the high quality that I expect it to bring out.
Ideally I’d like to keep them distinct from one another, hitting different aspects and levels of the photography culture of Steemit.
Cg - Well thanks @jamtaylor for joining us today; and I wish you all the best for Viewfinder and the ongoing Photo Challenge.
JT - Thank you @cryptogee for reaching out to a nobody like me :)
I hope that this article encourages other people to be creative and add value to the users of this platform, not just with their content but by growing their area of interest for others to interact and gain. Mutual self-interest!!
Cg - A massive atheist amen to that brother!
Winner Announcement for Steemit Photo Challenge #1 — WE'RE ALL WINNERS!
The Residual Project
From the reading of the Steemit whitepaper, and looking at the way the website is set up; you would be forgiven for thinking that Ned and Dan wanted to create a system that encourages, long-term commitment.
However we have a lot of quality posts that are between one and four weeks old, with no votes, or at the very least, we see posts in the 30 day trending tab, that were popular in the first place. On top of that, we have a situation whereby nobody can comment, let alone vote, on any articles that are more than 4 weeks old.
Such a short-term policy, strikes me as one that is at odds with the general long term aspirations of the Steem team, so it baffles me slightly.
Steemit is unique in that, a lot of the content on the site is not time sensitive, therefore they hold their value for a lot longer than the average post on other sites, such as Facebook and to a lesser extent Reddit. With this in mind, the Orconomist is launching The Residual Project, with a view to helping more authors to achieve residual income, on their older posts.
The project isn't just about catching posts that didn't make it the first time around. As a content creator, I feel that I am entering into a dialogue with every person that reads my article. Replying to some of the comments on my Steemit posts, I have sometimes had more fun answering them, than writing the original post.
As a curator, the situation is just as bad; I don't know about you, but it pains me, when I come across a fantastic 2 month old article, and I can't vote or reply to the author. This has happened to me quite a few times, in some cases, the author could really do with some encouragement.
In other cases they have written something I have found so useful/inspiring, I have felt compelled to comment; only to be told that somehow, the article has lost its value in 4 plus weeks.
The Orconomist proposes that the payouts should be as such:
- 1st Payout - 24 hours
- 2nd Payout - 4 weeks
- 3rd Payout - 12 weeks
- 4th Payout - 26 weeks
- 5th Payout - 52 weeks
- 6th Payout - 104 weeks
It is unlikely that more than 1 or 2% of all posts will payout any significant amount after 104 weeks; however this isn't the point. It is about promoting long-term thinking, and at the moment, a 24 hour, and 4 week payout, combined with a hiatus on any new comments, really don't do that job.
So, go onto the new chat channel OrconomistResidualProject and check out the older posts that have been linked there. You can also post links to older content yourself, this can either be articles that were overlooked the first time around, or popular articles that you have found extremely valuable.
By doing this, you are creating two up sides; first you are securing yourself some curation rewards, that will keep your account ticking over. Secondly you are encouraging content producers to create more posts and grow the platform.
All Steemians want the Steemit website to last for a long time, we all want to be sitting there in ten years time, looking back at this time fondly. So please support the Residual Project by voting and posting older content to the chat channel.
Credits:
Editor: @cryptogee
Logo Design Cover Art: @cryptocreative
Special thanks to @hisnameisollie and @jamtaylor
Extra special thanks to @cryptocreative for completing the logo design whilst doing his real job till at least midnight every night!
Thank you for reading the first edition of the Orconomist, in the spirit of communication and openess, I invite any member of the Steem Team to answer and comment on any issues I have raised around residual income and the internal market.
Thanks and take care.
Cryptogee