Introduction
STEEM ecosystem is comprised of 3 tokens of value: STEEM, SBD and VESTS.
Vests are much like shares in a company. They represent the ownership, and give holders special priviliges (voting power and curation rewards). VESTS are also mostly protected from inflation.
But, who owns the VESTS?
Ownership Distribution
For ease of calculation, I have converted Vests into Steam Power (SP). Since we are looking at ownership in relative terms, we can omit the inflationary nature of SP.
Furthermore, the price of STEEM is ~$1, and we can imagine each SP could be worth about as much.
.
Classification:
| Class | Short | SP |
|---|---|---|
| Mega Whale | MV | 1 Million+ SP |
| Whale | W | 100k - 1M SP |
| High Middle Class | HMC | 10k - 100k SP |
| Low Middle Class | LMC | 100 - 10k SP |
| Minnows | M | Less than 100 SP |
| Dust | D | ~3 SP |
.
Distribution:
| Group | Users | Cumulative SP | Cumulative Power-Down |
|---|---|---|---|
| All | 74,948 (100.00%) | 132,845,571 (100.00%) | 1,025,293 (100.00%) |
| MW | 14 (0.02%) | 93,883,160 (70.67%) | 871,518 (85.00%) |
| W | 85 (0.11%) | 24,275,728 (18.27%) | 105,853 (10.32%) |
| HMC | 310 (0.41%) | 9,921,171 (7.47%) | 37,319 (3.64%) |
| LMC | 3,989 (5.32%) | 4,268,850 (3.21%) | 10,603 (1.03%) |
| M | 70,550 (94.13%) | 496,662 (0.37%) | 0 (0.00%) |
Dust Accounts:
| D | 44,895 (59.90%) | 130,702 (0.10%) | 0 (0.00%) |
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Power Down
| Power-Down Whales | Cumulative SP | Cumulative Power-Down |
|---|---|---|
| 49 (0.07%) | 93,729,021 (70.55%) | 977,371 (95.33%) |
49 whales are responsible for 95% of all power-downs. 50 whales are not powering down at this moment.
This snapshot was taken on August 25th.
Ownership Redistribution
I have re-ran the distribution snapshot a few days later, August 30th.
This is how the wealth distribution looks like. The top 0.13% own 90% of the stake.
.
Distribution:
| Group | Users | Cumulative SP | Cumulative Power-Down |
|---|---|---|---|
| All | 79,033 (100.00%) | 136,401,970 (100.00%) | 1,119,533 (100.00%) |
| MW | 15 (0.02%) | 96,917,185 (71.05%) | 944,673 (84.38%) |
| W | 89 (0.11%) | 24,559,020 (18.00%) | 127,808 (11.42%) |
| HMC | 321 (0.41%) | 9,962,043 (7.30%) | 36,152 (3.23%) |
| LMC | 4,141 (5.24%) | 4,442,727 (3.26%) | 10,898 (0.97%) |
| M | 74,467 (94.22%) | 520,995 (0.38%) | 2 (0.00%) |
Dust Accounts:
| D | 48,532 (61.41%) | 141,641 (0.10%) | 0 (0.00%) |
Not much has changed in 5 days. It looks like Mega-Whales got some extra shares at the expense of smaller Whales. Middle-Class has lost a a small fraction of their stake as well.
.
Power Down
| Group | Power-Down Whales | Cumulative SP | Cumulative Power-Down |
|---|---|---|---|
| MW+W | 58 (0.07%) | 102,585,930 (75.21%) | 1,072,481 (95.80%) |
58 whales are responsible for 96% of all power-downs. 41 whales are not powering down at this moment.
This snapshot was taken on August 30th.
Cumulative Power up vs Power Down
If we want to understand the recent decline in the price of STEEM, we have to look at supply/demand dynamics between stake holders (whales) and investors.
One metric that can be used to guage this is the power-up vs power-down ratio. Big thanks to @lukestokes for the idea.
| Power Ups | Power Downs |
|---|---|
| 980,885 STEEM | 11,526,383 STEEM |
These metrics are collected from a 10-day range from August 19th to August 29th.
It looks like the power-up vs power-down ratio is a whopping 1:11.
The price will keep dropping, until the ratio reaches equilibrium (1:1), by either whales stopping the power down, or by investors stepping up to buy cheap coins.
The daily power-down pressure. Interestingly enough, ~900,000 STEEM are created daily right now. This might be purely coincidental.
Analysis
How could the middle class increase their stake in the platform?
One way to earn SP is by participating in Mining and Content Creation.
New STEEM is created with every block. A block is created about every 3 seconds, whereas 2 STEEM are created for the rewards pool, and about 1 STEEM gets created for the witnesses/miners.
A blogger gets at least 75% of the post reward, where its split evenly to 1 part STEEM in a form of SP (VESTS), and 1 part STEEM as SBD. Remaining 25% goes to curation, unless the curators voted early (within first 30 minutes). In that case, the curation reward is shared with the author.
Mining:
| Stake | Benefactors (paid as) | Group |
|---|---|---|
| 19/21 (90.4%) | Witnesses via dPOS (SP) | Whales |
| 1/21 (4.76%) | Backup Witnesses via dPOS (SP) | Anyone |
| 1/21 (4.76%) | Miners (SP) | Anyone |
Content:
| Stake | Benefactors (paid as) | Group |
|---|---|---|
| up to 25% | Curators (SP) | Whales |
| a fraction off 25% | Authors (SP+SBD) | Anyone |
| 25% | Authors (SBD) | Anyone |
| 25% | Authors (SP) | Anyone |
Now, surprise, surprise: all of the main witnesses are whales.
Also, since the whales own 90% of all SP, there is a mathematical certainty that they get most of the curation rewards.
Thus, it might be safe to assume that this venue won't increase the stake of the middle class anytime soon.
Going Forward
I believe that we need a broader group of stakeholders to increase platform's reach.
Having 100 committed whales is great, but their reach is limited to their skills, influence and social circles.
To reach mainstream adoption, we may need more people with skin in the game.
Committed Minnows
If whales continue to sell their tokens, they will eventually become cheap enough so that regular people can buy into the system. A person with a few hundred or a few thousand dollars invested is much more likely to recommend the platform to others, and therefore contribute to its organic (word-of-mouth) growth.
Committed Influencers
Whales could power-up a selectfew influencers, instead of selling the coins outright.
This way, the net-worth of these tokens will be dependent on influencers performance, and thus, we can expect them to take this job more seriously.
Conclusion
Its nice to see a coin that isn't owned and manipulated by miners, who don't really give a damn. Ownership should be handled prudently, and only given to those who deserve it.
It will be interesting to see how the re-distribution gets handled in the future. If there is interest, I will create a weekly report.
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