Is the act of burning tokens with the intention of raising the token's value paradoxical when burning tokens is reducing the distribution percentage and increasing the stakes of those voting to burn?
From my point of view, I believe this jeopardizes the concept of Proof of Brain since the value derived from POB will be resting on those who hold stake and decide where to allocate votes.
If there are fewer with stake, there is less range when it comes to the reward pool distribution.
Bitcoin is known as a store of value and the burning of BTC makes sense since fewer tokens in circulation equals a higher price per BTC, fundamentally.
POB differs from this since fewer tokens in stakes equal less evidence of Proof Of Brain.
If we take the act of voting on the burn posts as an example; there are two actions happening.
- Tokens are sent to null, reducing the total supply.
- Those who have voted receive a 50% curation reward from their vote.
This means that a percentage of tokens are leaving the circulation and not going into the accounts that are providing content within the Proof of Brain community.
Voting on the post itself doesn't exactly demonstrate an understanding of how the Proof Of Brain mechanics work. I can understand the thought process behind voting but I believe it's short-sighted and doesn't take into consideration where the real value lies in the token.
The only reasoning I can see for voting, except for curation rewards, is to increase the dollar (or whatever currency you want to insert here) value of the token.
It's true that if this is higher it will attract other people to the platform and will provide other opportunities, although I believe this is a double-edged sword because it sacrifices wider distribution of the token and reduces more evidence of Proof of Brain being demonstrated on the platform.
One thing to note is that the token doesn't have witnesses to handle the governance and decisions for the betterment of the platform.
If burning tokens is something that people see as beneficial in these early stages, I propose something which I think makes far more sense.
@proofofbrainio burns a percentage of their curation rewards every week.
This would apply to all larger stakeholders also but it makes the most sense for proofofbrainio to do this at this current time (I don't think anyone should burn in all honesty, but I don't just have the monetary value of the token on my mind).
I'm no mathematician but I'd suggest that the main things that factor into the percentage amount being determined are;
Amount of tokens burned doesn't risk the account losing valuable stakepower which can be used to tackle abuse
If 21 million isn't the magic number of tokens, what is? And what price ceiling is plausible?
This further opens up discussion surrounding how liquid funds would be handled on the @proofofbrainio account and what the handling of said tokens would do to impact the platform.
It's understandable that @proofofbrainio is a person (insert Satoshi reference here) and the account should be utilised in the same way as other accounts, but this poses some ethical dilemmas and should be considered by those investing time and money.
The burn proposal is merely a way to highlight how a different method could be introduced which doesn't hinder the organic nature of distributing tokens to an extent (Again, I don't think any should be burned right now, I believe there are better methods for improving the value of the token).
My position on burning tokens changed after @trostparadox mentioned the distribution elements in a comment not long ago.
In terms of the self-rewarding aspect of voting the burn posts, I am guilty of voting on them myself when they were first introduced and I did so on the 6th day with a 100% vote to maximize curation rewards and the amount burned. Slap my wrist.
I hope this can spark further discussion and people can raise their thoughts about the different viewpoints that can be made on this subject.
I'm tagging all the people below who voted on @madstacks recent burn post (top 20 names or so) to notify them about this post and try to discover what their opinion is.
@vempromundo.pob @onealfa.pob @oldmans @interpretation @harpreetjanda @marvinix @dwayne16 @scholaris.pob @pandaparker @californiacrypto @antonym @curamax.pob @dalz.shorts @thranax @spinvest-leo @pialejoana @andy4475 @revise.pob @stratton.npc
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