#steempower

Two big issues that are plaguing Steem from an Investors POV & a proposed solution

They Call Me Dan@theycallmedan (80)2602d

Talking to investors and hedge funds and being an investor myself, we've identified two key issues that are currently hurting Steem.

The two issues are Liquidity & The Hard Lockup (locking up Steem with no way to get our early).

In the investing world, you have hard lockups and soft lockups. In the crypto world, being so volatile and risky, hard lockups are very unusual. Most hedge funds or traders get into crypto for the volatility, which creates huge volume and demand. When Steem starts to pump, there simply isn't enough supply supplied fast enough for a big whale to accumulate sufficiently to make it worth their time to trade.

What happens is an artificial rally with noobs chasing the burning end of a wick until it inevitably goes out. The volume is nothing spectacular for long, quickly fleeting up then disappearing.

What I propose is a 5% fee that is burned for powering down instantly any amount you want. If the price of Steem pumps 50%, what is a mere 5% fee to catch dem gains? Keep in mind, Steem currently has around 8.5% inflation, so 5% burns on large amounts of stake can add up quickly. (I would have powered down 1mil Steem when it ran up to 10k Satoshis, poof 50k Steem burned from existence, and guess what, I'd bought twice as much on the dip).

People think 5% is high until Steem pumps to $1 overnight and you can't push withdraw fast enough xD source

Allowing people, the scapegoat to power down early should increase the confidence for more people to power up. The sell pressure that comes from large whales instantly powering down is met with large buy orders looking to pay a reasonable price.

This all creates much more liquidity, which in turns makes Steem more attractive to exchanges. More exchanges mean more liquidity. More liquidity means more speculative investors. I can do this all day. It's a nice conveyor belt to solving two issues that currently plague Steem with its 1mil 24hr volume and thin ass sell walls, making volume even lower.

With thin sell walls come thin buy walls, who wants to lock up a lot of capital on a centralized exchange in hopes someone decides to sell. Traders want action, and when Steem moons, we'll get a lot more speculative action if there is a healthy supply of Steem on the market for sale.

I know it sounds crazy, but when you combine a healthy supply with a burn, the result on paper equals more liquidity and a lower total supply of Steem, which equals: insert rocket ship emoji

I'm a fan of burning, any way you can think of burning more Steem? Any way you can think of to add more liquidity to Steem? - Please post your suggestions below.

Comments · 39

@joshman(74)· 2597d
I'm late to the party here @theycallmedan, but couldn't you just build a bucket (e.g. savings) conforming to those rules? You could keep the slow power down for people who want the peace of mind and have the 'rainy day' bucket for people to withdraw instantly with a penalty. Hell, I might keep some percentage of my SP in that rainy day bucket for emergency beer money. I don't know if technically it would be the easiest solution, but conceptually for me it is.
@bafi(68)· 2598d
Love this idea @theycallmedan, and I certainly agree with you: a burning mechanism is vital for steem to thrive!
@hiroyamagishi(69)· 2599d
One of the best idea I have read this week. Burning Steem in exchange for instant liquidity is a game changer. Good point of view dan you always shared!

Things to work on after HF and SMT's
1. Resource Credit delegation
2. Instant liquidity in exchange for Burning some Steem
@jbgarrison72(50)· 2600d
Respectfully, I disagree... if instant power down were suddenly available, this platform would be a ghost town already.

The "delay" is what has kept everyone from acting on hasty and impulsive fear.
@jrcornel(82)· 2600d
This seems like a great idea. I would support it. (Barring some security protections are put in place in case of stolen accounts)

Also I think we should be reducing the 3 month power down window to something like 2-3 weeks, even that would be more attractive to investors.

Great ideas overall by the way and keep up the great work you are doing with steem!
@lordbutterfly(80)· 2600d
A lot of people have been talking about this for a long time. Its a decent idea. The biggest issue though would be the reward pool size fluctuations.

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@arcange(79)· 2600d
Congratulations @theycallmedan! Your post was mentioned in the Steem Hit Parade in the following category:
- Comments - Ranked 2 with 77 comments
@kenanqhd(69)· 2601d
5% is a lot man. If someone wanted to powerdown 1 million sp, they'd have to burn 50,000 steem? If steem was $1, thats be $50k just to have steem liquid. I dunno man, but that still sounds way to expensive.

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@matt-a(66)· 2601d
Woah, this is a seriously cool idea. However, I think a flat static 5% may be a bit too small of a penalty. Maybe make it bracketed? Maybe have an option to dump to project funding instead of a burn? This is something I honestly haven't thought about and I like it.
@svamiva(61)· 2601d
It was always my desire to have an internal SP/Steem market, but your suggestion seem to be much easier to realize.
@ssjsasha(74)· 2601d
We are getting rekt
@sumit1998(67)· 2601d
Power down is always a headache for any investor in steem because it takes to much time to recover all steem to trade that’s really not a good idea to attract investors. Because ath comes only for two or four days not for three months so every wants to sell but can’t because of power down features. So why would any investor invest in steem, when they can’t sell when they want. Really this idea can work 5%fee for power down.when we don’t have any transfer fee for any amount of transfer and This can also help to fight with inflation of steem supply
@sepracore(64)· 2601d
We do need more ways to burn Steem that essentially doesn’t equate to user fees ..... hmmm.
@marki99(62)· 2601d
The best idea for steem I've heard in a year
@cmplxty(78)· 2601d
I would like to see this but with 2 factor authentication. With the advent of google Authenticator type apps, this type of thing would be great.

There would be a sliding scale; the faster you want your money the more you burn. It requires an owner key as well as the 2 FA and burns 6%; 3% to go to the new pool for projects, 2% to existing SP holders over the standard 15 SP account creation (perhaps goes only to those who have non-delegated >16 SP staked, though this could get tricky since some would just create accounts in order to benefit any time a whale cashes out) and 1% gets burned from the reward pool.

I also think a 6 hour period would be required; if someone has access to all of your 2FA things such as the app on your phone, your owner key and your email/phone number then you should have some serious security concerns and this shouldn’t be your top priority! 6 hours would be enough time to do this type of thing without being a burden on the investor, because when markets move quick you don’t want to wait >12 hours to do these moves.

Hope this can be incorporated into a future update, you’ve invested quite a bit so will they listen to one of their investors?
@blazing(71)· 2601d
the lockup period is what keep many investors away the team has to consider that thing to be change soon
@borislavzlatanov(65)· 2601d
I think it may disintegrate the community, which I think is the most valuable thing we have. Steem doesn't have big money behind it (like Binance or EOS), it's a more genuine grassroots ecosystem, and this gives it much more resilience. The more centralized blockchains/cryptocurrencies may be doing a lot better in terms of price, but they can die much more easily because of the lack of resilience.
@moon32walker(72)· 2601d
There are 100 million of liquid steem stored on exchanges. Sell walls are there and they will be very tough to crack. The issue is the lack of big buy walls. There are way too many sellers in our system, not nearly enough buyers.
It would be neat to have a quick powerdown, but that will only create more selling pressure making steem a coin with destructive downward pressure. It would be devastating for Steem price, a total reset of market cap. It would almost mean a total waste of time for everyone who grinded for 3 years and decided to power up. It is quite possible to go there without this insane proposition if btc dumps to 6k, back to 10cents. With this proposition Steem could go as low as 2-3 cents if btc dumps, and that would be a total and utter disaster.
@graylan(56)· 2601d
I've been saying this for very long time. My idea was to bring power downs to instant with no fee and let the market flow freely. Many of us warned of these dark days of liquidity back in january with ned's mass powerdown to exchanges . Some deal was made with witnesses but it was never public. If we forked steemit Inc out then they would have been forced to actually get profitable or die right then. I think forking a danger out of the chain is acceptable. Today, on July 6 months later, We are past that point and can never return to edit any transactions in the chain for any reason in the future. The only option is to let steemit sell millions of coins.. forcing the price down... and the problem of liquidity gets worse. Bit of a shit situation I'm afraid.

But we can fix it all. Here's how.

We have to build decentralized repository on steem for steem, then vote this code in with community support. Steem becomes unstoppable. Bitcoin is our dad but it will seem like our grandpa once this phase of governance development is complete.
@rok-sivante(77)· 2601d
Brilliant.

I love your line of thinking: solutions to some serious hurdles.

Never would’ve thought of this. Really hope this gets proper consideration and perhaps implementation, if it’s serve as well as the theory suggests... :-)
@chekohler(76)· 2601d
I really like the burning of tokens idea, we clearly have to find more ways of pulling STEEM out of circulation other than just powering it up, its clearly not a motivation for people to have strong hands or see any benefit.

I think the instant trade for a 5% burn fee seems fair and it will also discourage users or rather allow them to think twice about powering down to sell if they have a smaller stake while whales can do their thing

I would like to see more ways to burn STEEM. I like what LEO is doing with burning bid bot bids and promotion tokens are burned, I think those are viable options too.

I'd also like to see with SMT's and SCOT tokens creation of Smart contracts for services that also burn a small amount of the tokens
@freddio(60)· 2601d
whats about 4 weeks for powerdown and you can get for 1 week powerdown instant for a fee? This fee can be use for onboarding for example, like it creates some Tickets for wallets? if Someone powers down 100k fo he can get 25k instant.

So 25k - 5% =1250.

So there are 416 new account tickets avaible. Its also important for a bull run :)
@sardar-sani(60)· 2601d
it is great 5% fee on instantly powering down ....
@mattclarke(71)· 2601d
Why not make SP transferable? If I'm going to buy STEEM just to power it up, I'd rather buy it at a discount from somebody who wants liquidity. Big wave of FUD hits, I can get more SP for my STEEM. Instead of a flat 5%, we let the market decide. Security's still a concern, though.
@devann(61)· 2602d
Great post with interesting and useful discussions.
@uyobong(78)· 2602d
Great idea you shared on Instant powering down with a 5% fee. We have to deliberately grow steem with burns.

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@rishi556(72)· 2602d
Not just that, EOS has set standard as 3 days. We need to massively drop it from the 13 days that it's at. I like the fee system as it does help reduce supply as well, but why not both? Take it down to a 2 weeks, 1 payout each week. Want it now? Pay current inflation price.
@dulce160(65)· 2602d
eso e sbueno saberlo, gran analisis,
@abitcoinskeptic(75)· 2602d
Great idea, but I want a 1 week lockdown option or a whitelisted powerdown withdrawl address incase someone steals my keys.

Also, a slopped slider would be great here. Kinda like post office. 13 weeks in 13 pieces is 0%, all after a week is 3%, all after 24 hours 5%, all now 7%.

Burn 50% use 50% to fund sps and reduce the 10% take based on posts.

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@arunava(76)· 2602d
When I read the first three Paragraphs of your post my mind instantly went like we could have a split system in which an Investor can lock in 10000 STEEM as Steempower and is eligible to withdraw 25% of it instantly but once a week.

But going further into the Post the 5% Fee sounds amazing as this Burns STEEM which makes it more alluring.

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@nealmcspadden(74)· 2602d
I actually like this idea a lot. Put a dent in the inflation, which creates an upward pressure price, when you liquidate, which puts a downward pressure on price.

On the other hand, heimindanger has pretty well convinced me that staking in and of itself is kinda pointless.
@kryptik(66)· 2602d
I really like the idea but it may negatively affect voting as people could shell out “free” votes. Power up, vote ten times, power down. Sure it would cost more than it’s worth but it may mess up the algorithm.

It might be a difficult thing to plug in.
@josediccus(83)· 2602d
The only issue I have is that this could Affect a person if their account was stolen but I think Steem now does better when it comes to account security so it's brilliant for me however let's say 5% for larger stake and 3% for lesser, theoretically it may still work. This way people will power up all their Steem cuz they know they can get it anytime either Small or large stake holders
@tomlee(71)· 2602d

What I propose is a 5% fee that is burned for powering down instantly any amount you want. If the price of Steem pumps 50%, what is a mere 5% fee to catch dem gains?

I totally like this idea. Waiting for such a long period of time before your power down completes is really not good for investors considering the unsteady state of coin prices. 5% isn't really that much I must say...

More so, I feel another problem investors face is the fact that curators' reward is somewhat too low and this discourages many investors who do not feel it's fair to start blogging before earning.
@fitinfun(72)· 2602d
Does it matter if we have more users succeeding here? One area I am concentrating on now is the dApps.

We have at least 20-30 now where people can post niche content, play games, gamble etc. I am testing them, polling about them, reviewing them, and helping others to get started withthem. I'm also promoting them on social media.

All of the dApps I push have big sp and vote for people who post with them. STEEM dApps are all at the top of the lists at thestateofthedapps and other similar lists.

So if you post random photos for free on fb, post here with appics. Pro shots go to ntopaz. Free restaurant reviews are paid at tasteem. Get your video paid at dtube instead of posting for nothing at yt. On and on we go.

Next up - is steem-engine a game changer? The ability to trade many coins and tokens while on steem seems to be to be a great step forward.

And as my last idea - does it help when people buy in at the dolphin/orca level to USE steem for their own work? The are not trading investors, these are small to mid-sized companies that invest to get promotion with steem posts and interaction. If we has 500 companies such as coingecko, would that help the problem you are talking about?

I wonder what you would be investing in if people are not blogging here. I try hard to ignore the price and just keep working. I find incredible new options many times a week. STEEM is a whole new world compared to when I got here two years ago, and far superior to that time.
@themanwithnoname(65)· 2602d
Sounds like a great idea to me. What would need to happen for something like that to be implemented?
@nonameslefttouse(77)· 2602d
7%. 5% gets burned, 2% goes to other existing SP holders.
@lunaticpandora(70)· 2602d
Having an option to burn to speed up power down sounds like a great idea! I mean, if you don't want to burn, you don't have to do it but you wait your 7 days and if you want it now, burn 5%!

Would this burn you are proposing be 5% per cycle or 5% for the whole 13 weeks?
@whatsup(76)· 2602d
Sure let's throw that in this hardfork too!

While I don't think it is a bad idea, no one is going to buy steem until they hear about it.

Keep playing with little details that bug our own team... and it might make a few people happy and stop some of the bleeding, but it doesn't fix anything.

Saw this conversation today, in another place also. ;)