Curation rewards are the talk of the town this week. Should they stay or should they go?
The purpose of Steem/Steemit was to provide a means for bootstrapping and onboarding users of a cryptocurrency by creating a popular and scalable format for doing so: a social media website. Steemit is not the end game. It is merely the first building block.
In order to help bootstrap the Steem blockchain/currency, new users are given a small amount of the currency to be used for their activities on the platform. They can build on this initial amount by interacting through content creation, commenting, and voting on other posts. There is also an option to increase their stake by purchasing more STEEM and using the added influence to potentially increase their rewards accumulation over time.
Curation rewards are the incentive for discovering and evaluating content. It is this reward that many users don’t quite seem to fully grasp, even though it’s likely the most important aspect of the platform.
How do we measure the value of Steem/Steemit?
Where is the value derived? Why are we incentivized to perform specific work on the platform? This may be one of the answers:
Value is in the Links
The Internet would lose the vast majority of its value if all links among content were removed. It is the relationship among web pages that allows Google to identify the best apple pie recipe among the 16 million results. Without the links the only information Google would have is word frequency.
Links can take many forms and have adapted over time. Every time a user votes on content in a social network they add a link between themselves and the content. This in turn links the consumer to the producer through the content. The more links a network has the more valuable the information becomes. It is the relative and intentional connectedness of information that gives it value.
A social network can maximize the value extracted from a set of content by maximizing the quantity and quality of links. Curating content is expensive and time consuming while being near impossible for computers to perform in the absence of links. Steem rewards users who are among the first to find and link to new content.
By incentivising curation the Steem network is able to use automated algorithms to extract the most valuable information from a massive amount of content.
From the Steem Whitepaper
What is meant by “value is in the links?” At first, I read this as an argument or example about search engine optimization (SEO). Upon further thought, I think it has more to do with filtering content by users so that the content can be categorized and presented in useful ways to users of the platform. Let me try to explain – and I welcome anyone who can clarify what this means...perhaps @dantheman and/or @ned can help with that.
Every time we post on our blog, leave a comment, or vote on content, it creates a link between our account and the posts. These various links between our account pages and other accounts on the platform help with parsing and indexing content, even if it’s just internal. Curating the content with our upvotes or downvotes makes pages like trending or active possible and helps rank content on those pages or in various tags. It provides a basis for searches to rank “good” content from “not so good” or even “bad” content.
This is valuable work for any given platform and, as such, the work is incentivized with possible rewards for completing the task. Incentivizing curation work is no different than paying the content creators for the work in the first place. Both actions of creation and curation are needed. One would not be useful without the other. It’s a symbiotic relationship.
In terms of value for Steem/Steemit, it is the links between all of the different pages and accounts that gives value to the platform. There is no specific content – other than what can be wildly popular and trending outside of the platform – that can “raise the value” of Steem/Steemit, and that is mostly dependent on the content attracting new users who will then add to the overall work on the site. How we subjectively value content from day to day is largely irrelevant.
Post rewards and the effects of curation
The fact that posts are rewarded with the Steem currencies is a direct result of curation and the curating incentives. It doesn’t matter what the post payouts actually are. What matters is whether or not the links are being drawn between the various pages and accounts. It is only assumed that the (subjectively) “better” content will be the recipient of more votes. There is some reasoning behind what may be considered generally more valuable or popular, but there isn’t much of an objective standard for content.
In any case, post payouts are not the goal of curation or the purpose for incentivizing it. Post payouts are the byproduct of curation.
Curators look for content that they believe (subjectively) will become the most liked – or the most popular. The reward for finding the best or most popular content is a percentage of the final payout of the post. The better you are at discovering subjectively good content, the more you can earn through curation. A curator that votes on content that is unpopular will likely see a lower return for their efforts than one that consistently votes for content that goes on to become popular. Whether we disagree on what constitutes “good” or whether we disagree on if it should be popular is, again, irrelevant.
The incentive for curating is only meant to entice people to cast more of their votes for content evaluation, which is then used for internal metrics and rankings of that content. Without the incentive to curate, there would likely be less overall curation.
But what about all of the bots?
They don’t really matter when it comes to work performed.
A curating bot or a curating human serves the same purpose and essentially does the same work for the platform. There is actually more value for the platform from a bot that curates 100 posts per day than from a human that curates 10 per day – if the value is indeed in the links. If 100 bots each curate 100 links every day and 100 humans are only curating 20 links each day, then there’s a disparity of 8,000 links each day between the two groups. The bots are actually performing more overall work for the platform.
Whether the work of the bots accurately depicts the subjective preferences of humans is debatable, but it’s up to the human evaluators to either agree or disagree and to curate accordingly. However, bots can also be programmed to find content that human curators have discovered and vote on them accordingly. Bot voting isn’t limited to one specific task or metric. As stated, the relationship is symbiotic.
Curation rewards mostly do not benefit new users and other small stakeholders.
This is true. Rewards are not as large for new users and other small stakeholders and they may receive nothing at all for curating many posts. This is one of the consequences of a stake-weighted system. Those users with a larger stake will inevitably receive a larger share of rewards for the work performed on the platform.
Is there something particularly wrong with this? Should the larger stakeholders not be allowed to earn a larger percentage of the value being created by the work being done?
Regardless of your opinion on that, curation rewards for a post are divided based on the voting weight of each of the curators. A user with 10 STEEM Power shouldn’t expect to earn a lot of rewards. A user with 1000 STEEM Power shouldn’t expect to earn as much curation rewards as one with 25,000 or one million. Each user has to either earn their rewards through posting or good curating, or they can purchase more STEEM Power to increase their stake on the platform.
There is an often repeated notion that new users cannot earn anything “adequate” or “significant,” or that they can’t earn a “decent percentage” of rewards. But what does this mean? What is an “adequate” amount of curation rewards for voting on content? Why are there continued complaints about how much a single curator can earn from a given post? To what are we comparing these assessments? How much should any given curator receive from upvoting content on a social media platform?
After these arbitrary assessments are made, the usual conclusion is that “curation rewards are bad” or that “they just aren’t necessary.” I see people argue that “you don’t need to pay people to vote on content because they’ll do it anyway.” This may be true, but we also don’t need to pay people for creating content because many people will do it anyway – and they do.
So, the argument can be used both ways, but this platform is not meant to pay one user instead of another – it’s meant to pay all users for their work performed.
So what are the solutions?
That depends on what the problems actually are. The mere existence of curation rewards isn’t the problem. What users are seeing as a “problem with curation” is mostly a problem with the distribution of stake, the voting algorithms, and the tiny user base. The only thing that can be realistically addressed right now is the voting algorithm, so here’s a solution that has been proposed.
There has been much conversation in the past and especially over the last few days or weeks about the n^2 voting algorithm. Without getting too technical for the average reader (and due to not even fully understanding all of the mathematical implications myself), this algorithm results in a relatively sharp curve for post rewards as more voting shares are added to a post via curation. As more users upvote a post, their respective contribution to the payout becomes exponentially larger than it would if there were no other votes.
One of the proposed and debated solutions by users like @clayop and @smooth is to change the algorithm to n log(n). The net result would be to flatten the rewards curve, which would better distribute the overall rewards pool among blog posts and also give smaller stakeholders a larger percentage of curation rewards than is currently received on a given post.
Image via @timcliff
If a better distribution of curation rewards is the answer, then this change could effectively address that. It would also help mitigate or even possibly prevent “piling on.”
Once better distribution can be achieved, the next focus would be on better incentives for curating. This can be realized by increasing the percentage of curation rewards back to the original 50/50 split with author rewards. As pointed out by many others, due to the reverse auction (the curation rewards “penalty” for voting on content inside of 30 minutes), the actual split isn’t really 75/25 or 50/50. Curation rewards are always less than the starting percentage. So, a return to 50/50 will incentivize curating, but it still won’t be a true 50/50 split – although it will certainly be better than the far less than 25% split right now.
And what would be the results of these changes?
With better distribution and less incentive for piling on, and an increase in overall curation rewards, a focus on quality curating should result in better returns for human curators. The incentives for holding SP would therefore be greater and may even increase demand.
The overall net result could be better distribution of post rewards, better distribution of curation rewards, higher demand for SP, a consequent higher STEEM price, and possibly even an increase in overall morale/enthusiasm for both content creators and consumers.
Yes, the overall stake on the platform will still be disproportionate between the early miners and the rest of the user base, but the changes would mitigate some of those issues and restore at least a perceptible amount of balance.
It is my contention that the platform functions better if both creators and curators can be rewarded for their work. It also appeals to a much wider market, since regular/routine or professional bloggers are a relatively small one. The purpose of Steem/Steemit is to onboard as many people as possible into the cryptocurrency space and to create a sustainable marketplace for them. Excluding content consumers from being rewarded for work done is simply not an option.
[EDIT]
I wanted to add this comment from @nonameslefttouse to this post, because I believe there is a valuable lesson to be learned from this. It is one of many reasons why curation rewards offer a significant advantage to Steemit and its users over other sites and their users. And I hope that the Steem/Steemit marketing team (if it exists yet) takes notice:
So I was on Youtube today enjoying the work of a particular vlogger I enjoy. He rides around on a dirtbike while saying words I find entertaining and/or interesting. One might say to themselves, "How does that bring value to the platform?"
This guy is almost at the 200000 subscriber mark. The video I watched had 69389 views. Yes, I realize youtube has millions upon millions of users who frequent the site. I noticed something peculiar though. Out of all those views and subscribers, the thumbs up button was hit 2822 times. I'm sure far more than 2822 people liked that video. Only 66 pressed downvote, and those were probably jealous trolls.
What could possibly be the reason why the upvote button on Youtube is neglected? No incentive, perhaps?
At the start of the video, the video blogger starts talking about how much he loves his supporters and begins thanking them. He said, "If only there was something I could do for you guys."
If he was on Steemit, he could have said, "Don't forget to upvote! Enjoy your piece of the pie! Thanks for the support, as per usual!"
I'm certain there's a lesson to be learned somewhere in what I just said.
Please take a moment to read this post by @sigmajin for further commentary on the voting algorithm: An Opponent of the Exponent: Making the Case for Vshare Linearity
I welcome any comments or critiques. And I really would like @dantheman to clarify the “value is in the links” portion of the whitepaper, if he has a moment to do so.
Follow me: @ats-david