Continuing on from The Steemit Loans to help highly invested, community oriented dolphins reach the middle-class, I will look at another perspective as to why this would be a good thing.
Currently, Steemit supports a range of projects with very large delegations but there is a major issue with this in my opinion as a large delegation is a point of weakness and prone to misuse. These issues have come up several times already and will continue to arise.
The problem that I see is that the project works like a lottery where large prizes are on offer but very few can actually get them. There are also risks that those who get rewarded are not necessarily so far from the project team, self-upvoting for exposure and over rewarded curation returns for doing very little among other things. This keeps the delegation value relatively centralised but the idea is to distribute it, isn't it?
Plus, there is very little incentive for the project to even be good as all it needs to do is attract people, which it can because of the large upvote prizes it has on offer.
What should actually be happening instead of projects being able to offer large upvotes is that the projects attract large upvoters, which in turn attracts users and higher quality content from them.
As an example, I will use @Dmania, which receives 500,000 in delegation from Steemit for their meme project. This gives them a current 100% vote of about $180 which I think we can agree, is significant. But, Should a meme being taken from the internet and reposted here be getting $80-120 from a @dmania vote? This is the issue with the large delegation as there is no incentive to spend time sharing value deeply into the community or, even caring about the content it upvotes as it gets paid either way. There is no downside for them.
But, without the delegation, the project is likely to struggle as it will be unable to attract users with large prize rewards and, there aren't currently enough big voters interested in upvoting memes. At what point can the business (who's owners can earn a great deal) stand on its two feet without delegation? There is not even an incentive for it to do so as there is the ability to artificially keep it alive. It is definitely not a free market system.
This is why a large middle class needs to exist and instead of Steemit giving mammoth support to projects, they should split the support between projects so they survive and creating a middle class who can support the projects if they choose. This is vital for a project to build itself to be able to stand alone as it tests it in the actual market place with real customers.
My vote is worth about 10 dollars (with my paid delegation of 25k about 40,000SP) but, no matter how funny a stolen meme (or any meme) is, am I willing to give it a 100% upvote? No, I am not. Someone else might be though. But, let's say the average it gets is 50% from a group of interested dolphins. To get about the same amount as a 40% @dmania vote, it would take about 15-20 middle-class voters. That battle tests the posts. There is unlikely to be too many memes in trending now is there?
But, with many more middle class voters, some percentage of them will be interested in upvoting memes and they will pick and choose on what they find worthy. There will be lower voting reward peaks but, the spread will be much, much wider. When there are highly rewarded content, they will much more likely have earned the value.
However, with a thriving middle class, it won't just be memes that get upvoted as there will be a much larger voter base with a lot wider interest areas. They will be able to support projects in a much more free market orientated way which will mean that there is a massive incentive for the project owners to offer quality service and the user base they have to offer quality content.
They would also be able to fundamentally change the trending section as they will have the power in numbers and diversity of interests to spread into the farthest reaches of the community. Half the posts in Trending currently seem to be projects self-upvoted using Steemit delegation.
Many people would like to see true free markets operate in the real world but here the projects are getting so much support that it is impossible to get even close to free as they do not even need a market at all to survive. There are many projects that don't have delegation and are struggling but people use consistently and would support more if they could.
Creating a healthy middle class invested in the future (and fast) would make an enormous difference to the way content flows through the platform and incentivizes the projects to be much better and develop faster. I don't expect this idea to get support though as, it is all too much work to make products that a market is actually willing to pay a lot for and, working for a lot of small amounts is just too hard it seems.
In my opinion, projects should get support to build a foundation and begin growth but, that support should be withdrawn once the project is either able to stand or, unable to survive. How many projects currently getting support from Steemit can continue unabated if the delegation is withdrawn today?
The problem is that without a middle class, the projects will ALWAYS have to rely on the subsidies Steemit provides in delegation. This means that instead of building the middle class to support the businesses, the middle class will remain largely non-existent whilst the projects reap massive gains without necessarily providing a service that would survive a free market.
Without the middle class, the spread of Steem remains narrower, the support for varied content stays narrow, the willingness for outside project teams (great for the Steem) to test the waters is lower as there is no market for them to survive as they are unlikely to get delegation (subsidy) and the community does not have a high number of interested and invested Steem holders who are looking out for the well-being of the platforms and projects.
Essentially, for the longevity of the platform, it is imperitive that middle class happens and soon. Even with the SMT's coming, with a large middle class, they will be able to support many more projects and really drive the possibilities and create a marketplace where quality and utility of project trumps the size of subsidy a project receives.
All Steemit needs to do is help as many diverse, invested, long-term, proven community developers reach the middle classes as possible. They will do the rest and support many, many more in the process.
Taraz
[ a Steemit original ]