Source : Steem
A lot of drama has happened, a lot of things have been said. People burying one's head in the sand, and people leaving like all hell broke loose. These last weeks were a bit chaotic. And all this chaos was fueled by the decrease in STEEM price. That shows (at least for me) how all this is still fragile, and ready to collapse anytime.
As I'm no one here, I'm gonna allow myself to give my opinion, and a few solutions that for me seem evident, but might not to someone who has been here longer, maybe more implicated, maybe with more stake. Maybe I'm also just plain wrong, that's a strong possibility. I might get some hate from this, but please read this with an open mind. My words have no value and my opinion has been asked by nobody, so my ideas will remain only ideas. I just want to say them as it could give ideas to some and I think they need to be pointed out.
The observations
Whatever we say, STEEM price has decreased. I'm not speaking about the free fall of the crypto market, I'm speaking about the intrinsic price of STEEM. It went from the top places in market capitalization (it was even it the TOP 3 at some time, 2016 if my memories are correct) to 52 now. And it's losing a place or two every few days.
Source : CoinMarketCap
Independently of the overall price decrease in crypto markets, this decline in relative place in market capitalization is a strong indicator that STEEM is losing its core value little by little.
The causes
All that means that structurally, STEEM is losing value. Why does a token, or any good, lose value ? Because the supply is superior than the demand on the open markets. And we don't need to look further, that's exactly what's happening with STEEM.
So the cause of this is pretty evident. But how does this translate into the Steem economy ? It just means that more people want to "get rid of" their STEEM tokens they just got (essentially through inflation via the reward pool - also called mining via the Proof-Of-Brain protocol) than there are people ready to buy them. So the next question is : why is that ?
All that follows is my analysis of the problem, it's most certainly wrong, but it surely can be debated. I will make generalizations, there are of course exceptions, but for the sake of argument, it is needed.
The focus on SMTs : For me, the prioritization of SMTs is prematured. Everybody seems to want SMTs as fast as possible, when we have no application at all there to give a real value to these tokens. It seems like, from an external point of view, that we're trying to push these tokens into the "real world" as fast as possible, to fuel a speculative bubble and bring interest back to Steem, with a myriad of tokens the one more useless than the next. The focus should be, for applications, to find a real business model which is sustainable and that brings fresh capital into the Steem ecosystem. That is the only way these tokens will have any value. I won't speak about the current distribution of these tokens, that is opaque to say the least. It's the race to attracting delegators, that are blinded by these promises of grandeur, and if everything stays as it is, a sure way to a real financial bloodbath for anyone touching these things (except maybe the ones currently emitting them).
Bid-bots and vote-selling services. They are another major reason why STEEM is losing its value. Most of their delegations come from people who got their STEEM mining (not criticizing that), but that's blocking a lot of the available capital in services that are not providing any value. You can look at it like real estate investment compared to buying stocks (investing in applications, in curation initiatives, in fact anything that aims at increasing the value of Steem, not just becoming a Steem-reward-pool-sponsored annuitant). A lot of the reward pool is going to these bots (in payments people acquired via blogging, in curation rewards), and the owners are selling these newly emmitted tokens, increasing the supply on the markets.
The Steemit delegations. These are for me the best tool for Steemit to bring value to the blockchain. But in fact they are currently doing a lot more harm than good. The applications benefiting from these delegations are making STEEM pour into the open markets, making the supply of STEEM explode, while bringing no capital into the ecosystem. They are only money-dispensing machines, and everyone want to grab their part of it as fast as possible. This is the first problem they cause. The second problem is that these delegations are completely blocking innovation, as no developer (even if capable of creating something much better) will try to enter a market where a steemit-sponsored app is already operating. That would be a waste of time as users will spontaneously go to the better-paying app.
That's the three most evident things that for me are causing this decline in the STEEM price. SMTs might not be something that is currently contributing, but that will be the thing that puts the nail in the coffin.
The solutions
First I will speak about the solutions corresponding to the three main causes that were identified as contributing to STEEM's low price. After that, I will speak about technical solutions that could be easily implemented to boost STEEM demand and hence increase its intrinsic value in the short term, without needing to change the whole system.
SMTs : Here it is simple. Just stop the development. Postpone it. Wait it out a bit. It will allow to sort out applications with a real business model, that are here to stay, and the ones that are just waiting for SMTs to take the loot and leave. It will also encourage delegators to assess their investment and think more long term.
Bid-bots : Here the solution is also rather simple. Someone needs to take action, create a bot (sorry for the contradiction), that systematicly downvotes everyone trying to use these services. Everyone could delegate to it, and slowly but surely, the demand for these services will disappear, making the game less rigged and approach this Proof-Of-Brain ideal. This common funds should also be actively maintained to counter any intiative to replace the current system by something else. It should also target circle-voting and other abuses. This might of course, cause a little bit of panic, with all big-stake holders, losing their golden-eggs goose, powering down and selling their STEEM. But that's a necessary step. I'm also sure a lot of them won't leave but instead redirect their investment into projects with a high potential added value.
Steemit delegations. The solution is also pretty simple. Steemit should revoke all current delegations and oblige the new applicants to prove that a Return On Delegation will be in place : meaning their business model is sustainable, will bring more money into the ecosystem than out, and that this delegation will be able to be replaced (no more curation-rewards- or beneficairy-fees- -based illusional and harmful business models - I have no other term, but we can not consider them being that)
Of course all these solutions might seem a bit exterme, so I will give 2 that are easy to implement, and without being so harsh:
Make the value of an upvote given to a same account decreasing over time. For example A votes B for X rshares, if the next vote happens two minutes later (I will not consider VP here), apply a penalty in the rshares calculations. Make this time-decay progressive so that, for example, a week later there's no more penalty. And the more votes there is in that window of time, the bigger the penalty applied, and the longer the time needed to go back to the "no-penalty" zone. This would stop bid-bots, vote-selling services, self-voting and circle voting at the same time.
Make delegations like the power-down system. When I delegate to someone, every week, 1/13 of the delegation is automatically undelegated and returned back to me (with no period with the delegation bearing no fruits). Like this, I need to constantly renew my delegations, also allowing me to review my choices every time. That will allow the dormant wallets to stay dormant, so more Steem Power blocked and more relative stake for everyone else.
If you read it, thanks !
See you in the comments if you want to debate this.