A few months ago back when @ned and @dantheman were working on the KISS hardfork that would simplify the system so as to
minimize the potential for failure, maximize the potential for optimization, build a stronger case for fairness, and more effectively communicate the system’s value to new participants.
..somebody suggested something that initially threw me as defeating the whole idea of steemit.
My initial response was to reject this idea as I was emotionally attached to many of the economics to the system, especially those that protected users investments. However, it only took a few minutes to convince me that the ordinary social media user does not consider themselves an investor and one of the greatest hurdles I've had when telling people about steemit was explaining that I can only take out half the money I made. That's when eyebrows are raised and onboarding becomes a challenge.
The response to the idea was an even worse idea (in my opinion)
While this would be OK for those users who make $300+ per post, for the increasingly large amount of users who usually make between $0.14 - $3, it would take a LONG time to get to the required amount of SP (I believe it's over a thousand) to power down and actually witness these tokens as real spendable money.
Before I move on to propose a compromise, lets look at some of the arguments made by @demotruk, @smooth, @pfunk, @bitcoinparadise, @j3dy and @riverhead.
Benefits of Enforced Investment
As a stakeholder in the STEEM blockchain, anybody who makes any rewards has some say in where the next rewards are allocated. In addition, they also have a voice when voting for witnesses who have the power to approve or disapprove of changes to the blockchain among other responsibilities. This sounds like a great idea, until you consider the drastic disparity between accounts who trend every day twice a day, and account holders who would leap for joy about one $50 payout post in a month of lots of < $1.00 payouts.
Another benefit is that stakeholders investments are protected when users cannot sell 100% of their rewards at once, flooding the market with every payout . . . until you consider just how low the majority of these payouts are and just how small an impact they would make on the market.
So how about a compromise ?
Considering what small payouts new users make, and what a small impact those payouts have on their power on the platform, I suggest we set a ceiling for liquid rewards before the excess becomes vested. Of course I'm not suggesting putting a cap on how much liquid rewards can be earned since there are many fund-raising projects which require the money immediately to cover the costs of building. Instead, I would suggest a second ceiling, at which point the distribution returns to what it is now - 50% / 50%
For instance, given a ceiling of $25
- if a post paid out at less than this amount then the full amount would be in liquid SBD which could then be sold for STEEM and powered up, or it could be sold for bitcoin and cashed out.
(Or eventually we can just spend straight from the STEEM wallet for expenses!) - if a post paid out at more than that but less than $50 then the first $25 would be in liquid SBD while the excess would be in vested STEEM POWER.
- if a post paid out more than $50 then the 50/50 rules which currently apply would again be applied here, so that 50% or the rewards would be vested while the other 50% would be liquid.
Who decides the ceiling ?
Before the debate of what's too high and what's too low begins I'd like to suggest that ideally the ceiling wouldn't always be the same and it would depend on how the witnesses vote. If it could be applied so that each witness sets their own limit to how much users can make as liquid rewards alone, then the blockchain could always decipher the median of the 19 votes and go with it. That would allow for experimentation between witnesses to observe market reactions.
Consider it a consolation prize for the many users who try to make it on the platform only being disappointed by the rewards when the same overvalued posts trend so regularly.
