#steem

Burnpost update for SBD at 1 USD and accompanying rule improvements

Since SBD has now reached 1 USD in value, @burnpost will potentially be going into "burn mode" where the rewards will be burned rather than powered up. In addition, the account will begin to power down, with the power down payments treated as incoming STEEM (rewards, donation, etc.)

However, due to the account having engaged in delegations to anti-spam initiatives, it is impossible to immediately power down (power down is incompatible with delegation; the delegation must be removed first). In addition, there has been feedback from the community that immediately destroying the value of the account is not desirable, since it removes quickly support from anti-spam initiatives (in fact, in order to power down, the delegation would need to be completely removed immediately even while the power down is ongoing) and it also removes the ability to support the SBD peg should such support be needed in the future.

For for these reason (to continue support for the anti-spam delegations, to optimize the return to Steem stakeholders, and to maintain burning/@null as the ultimate sink of all value received by the account), we will modify the rules as follows:

If SBD is trading at or below 1 USD, power down will be initiated at 25% of the SP (this requires reducing delegation first, which has a one-week delay). Upon completion of the 13-week power down cycle, if SBD is trading at or below 1 USD, it will be reset to 25% of the new SP. In effect, this applies a somewhat slower 1/52 per week power down rate instead of the maximum 1/13 per week.
The remainder of the SP balance will delegated (or, if there are no worthy delegation targets identified, unused)
Power down payments (STEEM) will treated as incoming STEEM payments (see #5 below)
Incoming SBD will be converted to STEEM using the blockchain function if SBD is trading at or below 1 USD. SBD will be sold on the internal market (buying STEEM) if SBD is trading for more than 1 USD. In either case, the resulting STEEM will be treated as incoming STEEM (see #5 below)
Incoming STEEM will be powered up if SBD is trading above 1 USD and burned (sent to @null) if SBD is trading at or below 1 USD.

The primary rule (social contract) governing the account remains this:

In no case will any coins from the account ever be sold, transferred, or powered down except to @null. Any value in the account can be considered as irrevocably allocated for burning either immediately or a some time in the future.

All rewards from this post will be sent to @burnpost as a donation which will then be traded from SBD to STEEM, powered up, and/or burned in accordance with the usual @burnpost rules. That includes SP which will be immediately sent in the form of STEEM from my own account

Comments · 14

@kiranvarma(39)· 2421d
fire her up to the ashes call the mob
@vinzruzell(54)· 2910d
Thank you for the ideas!
@online87700(45)· 2953d
This is new information about delegation steem power and steem , I would like to learn more kindly help , thank you bro Upvote my comments and Reply
@zaxan(67)· 2969d
Hey, Smooth! What's up? I wanted to ask you something: Is there a method to promote a project to investors or sponsors? Currently I am the CEO of a project called @elarca dedicated to the arts inside and outside the platform but for some reason it has been difficult to get the support or at least upvotes to help us grow as a project.

I know it's hard to want to support something but you've really been there before, if you know someone who spends their days thinking "hey! who can I reach out to?" I'd love to hear it from you.

Thank you very much. You can read more about the project here: https://steemit.com/art/@elarca/the-ark-or-our-project-following-the-design
@smooth(74)· 2974d
Proof of donation to @burnpost

Author reward 17.534 SBD, 43.965 STEEM and 57.857 STEEM POWER for smooth/burnpost-update-for-sbd-at-1-usd-and-accompanying-rule-improvements

Transfer 17.534 SBD to burnpost

https://steemd.com/tx/4f24f09487cecf90fe290c13ba9c16a9bcec8371

Transfer 101.822 STEEM to burnpost

https://steemd.com/tx/e04d8d2ff9b26d1891ef6616955df37373491449
@dhouse(58)· 2979d
Does burning really do anything since Steem is inflationary? The supply is still going up and up and up every day, indefinitely.
@anthonyadavisii(73)· 2980d
Hey @smooth, I hit you up on steem.chat but understand you're a busy person. I wanted to remind you of another anti-spam initiative that I believe is worth a delegation.

It's been my labor of love in development and I would love (and hate I guess you can say because I hate abuse. Period) to see flaggers have more of an incentive and extend our reach to higher magnitude abuse.

Even with our between 200 to 700 SP delegation we have had throughout the last 180 days, we have rewarded approaching 600 flags against abuse. Furthermore, the project is designed to address abuse that would typically fall outside of @steemcleaners scope such as video plagiarism and general voting abuse.

I know I am kind of tooting my own horn here but I think it is a damn shame that the project has such nominal delegation (even so I am extremely thankful to our delegators) respective to the proportional impact we are making on Steem. I've added numerous capabilities using Beem and intend to add more in the future. A delegation sure would help energize things though.

I really hope you will give the usage of your current delegations an evaluations and consider fitting the @steemflagrewards project into the mix.

Also, thank you for what you are doing with burnpost to help boost the price of Steem.
@layra(48)· 2982d
Hello @smooth, we are new to the community and your article is advanced but we will read it several times to get a better understanding. Greetings from Mexico! @Layra
@cryptotechnical(27)· 2983d
What can i do in steemit for improving reputation.
@lemony-cricket(63)· 2984d
Hey @smooth, I love what you're doing with @burnpost and though I haven't been voting it very often (I've chosen instead to positively reward others' content), I'd like to thank you for any impact this experiment may have had on SBD's fall to $1. This will be good for the platform in the long run and I hope it stays this way.

I have one question regarding the "rules" here. Why use the conversion transaction when the SBD price is below $1? Here's my understanding:
- Exerting downward pressure on SBD market price is good for everyone, even if it is at $1, because it creates incentive for people (even outsiders to STEEM) to purchase SBD, bringing money into our economy.
- Burning STEEM is also good for everyone, since it decreases the supply which should create an upward force on the STEEM price.
Now, I understand that on a large scale, the net effect of this difference is minimal, since STEEM is eventually being burnt either way, and it is irrational not to convert SBD below $1. However, the way things are, @burnpost does not act as a constant downward force on SBD; in fact, I think it starts acting as an upward force once it starts using the conversion transaction, since it is decreasing the total supply of SBD.

In general, I feel that since we are lacking a good downward pegging force, especially given the history of irrational valuation, I think we should be focusing on exerting as much pressure in that direction as possible, even below $1. I'd love to hear your thoughts on this.
@ranahussnainali(43)· 2984d
CPA here. Former Big 4 Auditor. Have done said cash confirm procedures many times. Wanted to a share a few thoughts, FWIW.

Cash Confirm Procedures.

These simply confirm a cash balance. The "unencumbered" written in the report after each balance is awkward, with no clarification as to the definition in the context of the report. I personally interpret that to mean unrestricted, non-escrow account, which I would expect this entity to hold their cash in--doesn't give me any additional confidence whether it was stated or not.

It's important to note that without a full audit, you're only seeing a third of the balance sheet categories right now. We have no information as to the entity's liabilities, and let's ignore equity for this discussion.

Without a full audit, we have no evidence that the entity has net assets. They could have $1 or $2.5B in liabilities, for all we know, thus rendering the true cash backing USDT (net of liabilities) unknowable

In my professional opinion, I do gain some confidence from the cash balances reported, but seeing only a portion of the balance sheet, the cash balances do little for me overall.

Additional note: the sentence in the report: "FSS did not provide the Tether personnel with any advance notice, nor did FSS provide Tether the account balance information gathered from the two banks prior to receiving the Tether balance information."

This also means nothing to me... The "advanced notice" portion is useless--Tether contracted FSS thus they know the procedures will occur. Also, Tether not providing FSS the bank balances and vice versa also means nothing--in fact, in a normal financial statement audit, you often are provided the balance by the client which you are confirming with the bank, which is totally legitimate. The fact that they didn't share balances doesn't give me any additional confidence, but seems written as if it's supposed to provide an uneducated reader such confidence.

Choice of firm used

Strange to me that a legal firm is performing an accounting firm's role. An entity this large can easily afford a Big 4 accounting firm to perform these procedures. Or even a mid-sized firm, which would provide investors greater confidence over the report. While cash confirm procedures aren't very difficult, would you rather have a plumber or an electrician wire your house?

Also, note that the report reads:

"Judge Eugene R. Sullivan (Ret.), one of the partners, is a member of the advisory board of one of Tether’s banks. It was through this connection that Tether was introduced to FSS. As well, the firm's relationship with the bank allowed for the following review to commence in a timely and comprehensive manner, ensuring that no pertinent information was overlooked in the process."

While AICPA independence codes don't explicitly restrict an auditor from being on the board of a bank for which confirmation procedures will be performed with for a client, this falls into the gray area where the auditor would want to maintain independence "in form AND appearance."

Again, we aren't dealing with an accounting firm here, we're dealing with a legal firm. As I'm a CPA, not a lawyer, I am unaware of the independence rules that lawyers must abide by, and openly stating something like that, I'd imagine they are in the clear. Not ground shattering. However, contextually, Tether has struggled with accusations, and I find it strange that they wouldn't seek out a completely independent, third party accounting firm. Furthermore, the comments regarding the review occurring "timely/comprehensive/ensuring no pertinent information was overlooked" is very, very unprofessional. You wouldn't say something like this in an actual opinion and/or procedures letter, at least coming from an accounting firm, as it opens you up significantly to liability in the advent of a lawsuit. I'm rather surprised a legal firm would issue that in their report.

Final/Overall Thoughts: This report gives me no additional or decreased confidence in Tether. The questions it raises as to their lack of an entire audit, along with choice of firm, leave me with little evidence and don't do much for me.
@jesse2you(55)· 2984d
Why not just send the sbd to dead accounts,or to new accounts...might bring back some of the huge turnover rate,or encourage people to stay with platform....
:-) I admit I don't understand the intricacies behind this... But from the laymans point of view,it sounds an awful lot like burning/destroying $... Feel free to send some my way,Or maybe give it to @youarehope they can definitely use it to help others!!!!! Namaste
@jang(73)· 2984d
Burn, MF, Burn!!!....:)....
@lunaticpandora(70)· 2984d
So basically? while Sbd is at or below peg, it will be used to buy steem to help maintain the peg and possibly move steem price up a bit while keeping the peg of sbd?