The Economic Improvement Proposal seems to have made its way into what is going to be HF21. While the narrative behind the proposal is believed to make sense enough that both Steemit Inc and most of the top 20 witnesses have given their support to the proposal, both the math of the convergent linear reward curve and at least the last few weeks of transactions when we apply the rules of the first two parts of the EIP to it, don't seem to actually support the narrative.
The only incentives that recent data truly reveals when applying a 50/50 split and different versions of the proposed convergent linear reward is that created by the reduced ROI on bid bot usage and an increased ROI for its owners, but this should clearly self correct for the bigger bid bots. A second incentive that reveals itself is through the data is that for reducing social interaction. Comments. Many of the convergent linear reward curve make social interaction on post significantly less attractive.
But with neither the math nor the recent transaction history agreeing with the EIP narrative, neither of them get any vote on HF21.
I tried before to create a counter proposal before. But as that counter proposal was way to different from the EIP, it was a completely futile attempt.
In this post I want to pose a minimal set of changes to the existing EIP that I believe could:
- Take away much of the undesirable effects from the EIP on new accounts and the potential for growth for the platform.
- Take away much of the rich getting richer and other unfairness attributes that are intrinsic to the current proposal.
- Improve on the incentive part of the proposal that the EIP attempts
Let us look at the three components of the current proposal:
- Move from a linear rewards curve to a convergent linear rewards curve
- Increase the percentage of rewards that are distributed to curators (and reduce what goes to the author)
- Create a separate down-vote pool.
I want to propose two fixes to this proposal that leave the spirit and most of the implementation of the original EIP intact, while improving on both incentive creation and on reducing the negative impact from its implementation.
Fix one: Move from a linear (n) rewards curve to an nS^Log(n) instead of an Sn²/(Sn+1) reward curve.
If we want to look at the proposed Sn²/(Sn+1) convergent linear reward curve and look how these compare for the influence of different fish sizes, the best way to look at this is by plotting the influence per unit of vesting against the total units of vesting used in a set of voting actions.
In the above graph, the blue line is the fair linear reward, where every unit of vesting results in the exact same influence regardless of how many units of vesting an account has. The other lines show a few of the possible convergent linear reward curves. What they also show is that all these curves don't scale very well in terms of incentive and impact on the little guys. Either:
- a curve creates incentive for dolphin sized accounts not to break their stake up into a hundred red fish sized accounts and is relatively friendly for new accounts but does absolutely nothing in terms of incentive to stop an orca or whale size account to split her stake up into a hundred minnow or dolphin accounts respectively.
or
- a curve creates incentive for an orca or whale sized account not to break their stake up into a hundred minnow or dolphin sized accounts and screws over new accounts so badly that new accounts have next to no influence at all.
What I want to propose is to instead of a Sn²/(Sn+1) reward curve, opt for a less dramatic and fully scaling curve of the form nS^Log(n). Let us see how such curves work out below:
As you can see, the nS^Log(n) shaped curves create the exact same level of incentive across the full spectrum of fish sizes to not break their stake up into hundreds of smaller accounts in order to play the system, and in doing so, creates no need to screw over new account in an any way disproportional way.
Fix two: Curator/Author buckets.
The second fix applies to the combination of the following two measures from the EIP:
- Increase the percentage of rewards that are distributed to curators (and reduce what goes to the author)
- Create a separate down-vote pool.
If we agree that the prime types of behavior we want to disincentify can be captured with the name false curation, and if we agree that giving a lower chunk of the reward pool to authors in a consequence, not a goal of the measures, we can create a situation where , using separate buckets for curators and for the authors of a post should result in the right incentives without any net changes to the division of the reward pool between curators and authors.
Consider the following implementation of the above parts of the EIP:
- The normal reward pool is increased by 25% of its current size, countered by a separate down vote pool with a size of 25% of the current reward pool, thus, together, resulting in the same level of inflation.
- Instead of the current 1/4 3/4 split between curators and authors, 1/3 of the RSHAREs of the up votes end up in the curators bucket and 2/3 of the RSHAREs of the up votes end up in the author bucket.
Now one simple rule to both repair the net division of revenues and to improve insentive against false curation:
- Instead of the current 1/4 3/4 split between curators and authors for the impact of down votes, 2/3 of the negative RSHAREs from down-votes end up in the curator bucket and only 1/3 in the author bucket.
- Only if by pay-out time the curator bucket holds a negative RSHARE count, this negative count is filled up to zero with positive RSHARES from the author bucket .
The great thing about picking these specific numbers, is that when there is minimal bucket overflow, the resulting net split of rewards between authors and curators for the whole platform would pan out to the current split, with higher rewards going to curators of unflagged content and significantly lower rewards to curators of flagged content.
How to get Steemit Inc and top witnesses to consider these fixes?
I seriously have no clue about this one. Is there a formal way to make proposals like these? For now, I just try to name @yabapmatt , @steemitblog, @lukestokes, @someguy123, @blocktrades, @curie, @good-karma, @aggroed, @roelandp, @gtg, @thecryptodrive, @timcliff, @themarkymark, @smooth, @therealwolf, @ausbitbank, @ocd, @ocdb, @acidyo, @anomadsoul, @anyx, @cervantes, @clayop, @followbtcnews and @drakos and hope one of these witnesses can bring these proposed fixed to the attention of the rest of them.
I personally think these two fixes to the existing EIP proposal increase incentive and decrease the undesirable side effects of the original EIP. I truly hope that somehow these proposed fixes to the EIP can be put to a vote between the witnesses before HF21 becomes a fact, because I fear for some of the unintended consequences of the current EIP, most specifically those of the convergent linear curves proposed.