My Stance on the Proposed Powerdown Period Change of 4 Weeks

in hive-111111 •  7 months ago  (edited)


While I've been somewhat vocal about my concerns regarding the proposed powerdown change (from 13 weeks to 4 weeks), I came to the conclusion that I'm ok (neutral) with this change and that I would accept it as witness. (Here is my initial statement)

Primarily, my concern was and still is regarding the security benefits that 13 weeks bring. On top of that, I would like to see a more robust & dynamic solution that supports multiple staking/powerdown periods and duration requirements for certain actions/rewards on Steem (e.g. witness voting could require min. 3 months powerdown and post rewards could have a powerdown of 4 months).

However, I don't think that people should be forced to be locked up for 13 weeks in order to participate on Steem. We want to incentivize people to buy Steem and stake it (powering up) in order to test out this amazing platform. And while 4 weeks is stil not short per-se, it's clearly shorter than 13 weeks.

Of course, having a shorter power-down period also brings the risk of increased selling. But then again, if people want to sell, they should feel free to do so.

So to sum it up: I find the proposed change acceptable, as long as no serious problems/complications are being discovered and as long as a more dynamic and robust solution is being developed afterwards.

Wolf


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My understanding is that SMTs are not allowed to have custom power down rules. So, reducing the time frame for STEEM would allow SMTs to function better for e-commerce and other scenarios.

Also I would love to see instant power downs with, say, a 5% commission (burn).

The burn is an interesting idea, but keep in mind that this would mean that a hacker could instantly drain your balance, while only losing 5% potential gains.

Sure, just like with all other cryptos. But this would allow me to use STEEM to pay for coffee without 4 weeks in advance planning.

At Waivio we are planning to pay users rebates for writing dish reviews at restaurants. Smaller portion of rewards are paid in VP through upvoting (usually 10%-20%) with the remainder paid in liquid STEEM (direct transfers). Some users complain that portion of their rewards are locked and cannot be used right away.

As for protection - maybe multi sig can do the job as an extra layer of protection?

I am a big fan of the instant powerdown burn, 5% is fine by me. To better protect an account, we could try whitelisted withdraw addresses, if the withdraw address is changed, the users funds are locked for x time. Also a way to add any kind of 2fa, even if it's just via email.

Or finally get Steem wallet on Ledger/Trezor. This way I can keep funds on one account, delegate it to operating account, managed through Keychain or even Steemconnect.

If account is hackable then it’s hard at this time to recover fund. So I don’t think this will effect instant power down. People with more steem are more cautious about their account and after power down there is option of 3 days to withdraw all funds if I am right

I would support a SPS propsal to intregrate steem into Ledger/Trezor

I also upvoted this proposal. Security is very important for businesses coming to Steem. And since distribution of liquid rewards through direct transfers requires active keys, companies need better protection. And hardware wallets and their integration with Keychain should provide convenient and secure solution.

The 4 week powerdown does nothing for me. It might as well be 13 weeks if we are talking adding liquidity to the market. When the price pumps, people will want to sell. You would be surprised at how much you'd be willing to burn to get your coins instantly when Steem is pumping 100% a day, 5% becomes nothing in those instances, but yet, helps with liquditiy and reduces circlating supply. I wrote a post about this awhile back.

@theycallmedan I am confused by your reasoning here. I don't understand why we should be concerned with price pumping or any such scenarios. It seems to me that the main thing for us to focus on is increasing Steem's user base (all dapps combined). Price pumps and similar seem to me a complete distraction from that. How are you seeing it?

I'd like to see a pre-burn. You could simply send STEEM to @null. You can instantly (or in few days) withdraw X20 times the STEEM you've sent to @null

4 weeks is no good. I suspect move to 12 weeks,

We must acknowledge that some people feel like they are being punished by powering up in a "market of fluctuations" - people shouldn't feel punished to power up and do the right thing and not have access to some of their steem in a reasonable timeframe. I imagine the answer would be have someone initiate a powerdown - a one week period elapses and 10% of their steem is released (an optional email could be sent out for security purposes) and week two 25%- 30% is released and then for remaining 10 weeks, 10% each time.

While it is a little confusing to the average observer, they are being protected in the first week (have up to two weeks to react if having been hacked) then get access the to a chunk for paying bills or whatever they need in the second week).

Such a tricky thing to find a compromise on this one. I wonder how this turned out? this post is a bit old and I'm late finding it.

Hi Wolf,

Of course, having a shorter power-down period also brings the risk of increased selling. But then again, if people want to sell, they should feel free to do so.

I am glad that you have also identified an increased selling pressure as one of the risks involved with the implementation of the four weeks power down period. And with increased selling pressure, permit me to say, comes a declining STEEM price.

Dumping STEEM will be the order of the day regardless of whether the price goes up or down. If it goes up, those who have earned free Steem from curation rewards will dump it faster and the situation will be the same if STEEM is falling - people who don't want their fingers get burnt will exit. These are natural human instincts.

I have heard a lot of people arguing that there are no lock up periods for Bitcoin and yet it is the king coin. Really? Does Bitcoin reward people who stake it from inflation? Or does STEEM half like Bitcoin every four years. Both coins are absolutely different.

At this point of falling Steem prices, we should even be talking about increasing the power down window to about six months than reducing it. We need to bring some stability to the price of Steem. And clearly, that cannot be done by reducing the power down period.

The link below contains my thought on this new proposal:

https://steemit.com/newsteem/@gandhibaba/on-the-13-weeks-steem-power-down-period-why-the-status-quo-should-remain

Thanks for sharing your thoughts, anyway.

I'll be honest, I'm not okay with shortening the power down time period. The 13 weeks is set as a deterrent to tons and tons of people powering down and killing the coin. It creates an incentive to be deliberate with powering down.

Maybe it's just me, but I think this is a bad direction to go. It sets off those alarm bells in my gut.

I understand your PoV and it's a difficult topic, but if people want to power down, they'll do it regardless of 4 weeks, 13 weeks or 2 years. The only thing this is actually doing is pushing the possible downside of selling further into the future.

For me, the bigger problem are inflation rewards being paid out faster. However, with 13 weeks, the chance is far lower for someone to test out curation rewards and voting in general here on Steem in comparison to 4 weeks.

And at this point, we shouldn't play defence with Steem. SMTs and Communitis will change Steem completely and this will be a perfect time for people to come back/for new people to test out Steem.

it's a difficult topic

You know, at least we're able to have a civil discussion over it. It's something that the Steem community does incredibly well. Total breath of fresh air compared to other social media platforms.

I do want to know more about your concern with inflation rewards. Can you elaborate on that? What problems have you identified?

Price of STEEM will increase only as the result of external demand. Slower inflation, burn initiatives and long power downs would not achieve that, IMHO.

Reading this with one with $tts. Interested to hear your thoughts :)

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If people just are powering down (or want to), then something is wrong or we are doing something wrong.

We are forcing people to stay 13 weeks so that in the end the destiny is the same = Sell Steem. It's annoying to wait so long for the same thing, the only difference is that now the suffering will be shorter

There are also different reasons why people are powering down, maybe they just need liquid Steem or something they want to do with it, but I think postponing so much the power down time doesn't make much sense, so I support your word: if people want to sell, they should feel free to do so

This.

It doesnot matter with either 4 weeks or 13 weeks when the price of steem at $0.10 right now !!! :)~

Haha. Very good point!

True but, hopefully, Steem won't stay so low for too much longer :o

Not that I can stop blogging, here, as a compulsive sharer, anyway :P

Thanks.😊

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I hope we love towards a 4 week power down - being able to move steem power around should incentivize more people to create and actually earn real money for their posts which should reinforce more of that behavior and bring more people to the site. From a creators standpoint if I knew I could create and get paid Half in in 7 days and the other half at the end of the month I’m all in on that, but to wait 3 months... that’s a long time man.

This proposed change sounds to me like "Don't know what to do, let's just do something to increase the price!"

What will the change do to increase the users of any of Steem's dapps? Do you know whether this question is even considered by the proposers of this change?

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Hey there Mr Wolf! Just wanted to come by and leave you a note. As a travel blogger and not a big time crypto or inner working of steemit person, I'm just learning about this new powerdown system now. It really doesn't mean much to me, maybe it's good as I can liquidate my steem faster, if I wanted to, which translates to more power in my hands. So I guess I'm for it.

But I really just wanted to reach out to you and tell you that as a small steem holder but daily travel blogger thank you for a few generous up-votes you've given me over the past month. It means a lot.

My story is that I was getting paid handsomely back in the day and putting out great travel content that I put a lot of time and effort into. Nowadays it's hard to get motivated to do above and beyond quality like I was before, if the price rally's or more support comes in, that will certainly change my attitude.

I know you're more invested than I am from a financial perspective and I just wanted to give you and idea of how the bear market feels from a serious content creators side who's been here for well over two years now.

I'm gonna go ahead and vote for your witness and recommend my viewers do the same. You seem like a good guy who is very much interested in seeing the platform succeed. So in that regard, hats off to you and keep up the great work!

From Koh Phagnan Thailand,

-Dan "World Travel Pro"

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I think it could really help people buy in and power up if they don't feel locked in. I know that the 12 weeks is really a psychologically long period of time and can be a lifetime in crypto.

I think the best way to appease the quite understandable desire of those people that wish a lower power down time and an excellent compromise in my eyes is to do the following:

  • Reduce the power down cycle from 7 days to 5 days, just like it was done with delegations.

  • Reduce the amount of weeks/cycles it takes to withdrawl all of your balance from 13 weeks/cycles to 10 cycles.

This effectively reduces the power down time from 91 days to 50 days and gives you 10% of your balance per cycle instead of 7.69% per week.