How To Solve the STEEM/Exchange Liquidity Crisis
Backstory
Vandeberg's heart was in the right place. But he allowed his emotions to overtake reason and he secretly reached out to the witnesses. It's completely understandable. His life was directly impacted by the recent Tron acquisition of Steemit, Inc.
Tron initially expressed what was considered hostile terminology, using words like "token swap" and "Old Steem." It looked like the chain was under attack.
What would you do?
As a result of this situation, Vandeberg felt compelled to instruct the witnesses on the correct course of action that minimized overall impact on the chain.
First and foremost, he did not want to see anything irreversible. So he pleaded with the witnesses if they intended to deploy a code changes in response to numerous hereto "token swap" phrasing, it must a) not require exchanges to upgrade and b) be reversible (in the sense that it not later require another hardfork to undo).
Vandeberg also pointed out that that the threats of a "token swap" may have been a miscommunication to get a press release out as soon as possible. He suspected that Tron just wanted to overshadow EOS/Voice on Valentine's Day by getting the release out.
With this in mind, he suggested that if the witnesses wanted to take action, they should only censor certain operations from certain accounts, via softfork.
Vendeberg was absolutely clear that any unwarranted, preemptive action needed to be avoided, if possible.
Witnesses went ahead with the softfork even after various clarifications were made that "token swap" was erronious. Tron responded by labeling the action as a "hack" in order to communicate to exchanges what they perceived as unusual in urgency.
Due to these circumstances and how it was later characterized, the exchanges powered up so the softfork could be bypassed.
Problem
Witnesses went ahead with preemptive action, regardless of the facts and Vandeberg's warnings.
To the exchanges, the situation was characterized as a security breach. It's not hard to reason that it was, from the exchanges' perspective because the witnesses deployed the softfork without facts.
The idea of the softfork itself was too clever for the witnesses to come up with on their own. But once armed with this solution, they felt emboldened, allowing emotion to take over.
Solutions
Witnesses should swallow their pride, accept the temporary label of "hackers," and consider a special hardfork to restore exchange liquidity in a specific timeframe only. The chain has been vandalized and we should accept that in and of itself as restitution.
The chain will forever reflect this one-time vandalization of emotion. That's punishment enough.
Witnesses should apologize to Tron Foundation for operating without facts to protect the chain. Witnesses should re-evaluate their process and criteria of protecting the chain.
Exchanges should begin their powerdown now, so that in 7 days they will begin to restore liquidity in case the witnesses are too prideful to implement the special hardfork.
To put this in perspective, if various exchanges with 100 million STEEM all begin to powerdown today, in 7 days 7.6 million STEEM would be available for withdrawal by depositors, each week.
Trying to get all the points of views here and be open mined.
But making a HF just for exchanges seems a big favor from the community. What will we get for return?
Also I'm not totaly convice we should make the hf for the exchanges special treatman. Its for them to sort that out with Justin.
One thing I'm 100% convinced is Sun should not vote witnesses.
What a coincidence, only Chinese exchanges connected to Sun acted in this matter... Binance was so concerned they they have received 2mln STEEM from steemit - oh how nice of them for helping out...
Bittrex had 0 problems with the softfork... And even if it would be a "security breach" - does it legitimize exchanges to use their clients tokens, stake it and use it to change witnesses elected by the community? Sorry, but this doesn't make sense. Those Chinese exchanges hopefully learned their lesson - don't make deals with Sun.
I could see that playing out with very little repercussions, as long as less than 7.6 million STEEM exits these exchanges per week.
Yea. Lol
Thinking the same.
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I don't agree with the actions of the witnesses or the label "malicious hackers" either. But the label and actions are both somewhat justified temporarily.
The exchanges decided to lockdown
theirfunds for 3 months. A quick hardfork to give specific stake specific privileges is in no one's interest. Justin shouldn't have promised them otherwise. It seems especially ironic given his stake may be special stake with special responsibilities.No one shall be given special privilages or restrictions without consensus should be everyone's default opinion. I don't think any move should happen in either directions until this is understood.
Governance decision making of decentralization is slow are difficult by necessity.
Wait, what are you talking about? Is it common knowledge that Vandeberg wrote the soft fork code, are you claiming this or are you speculating?
When was it common knowledge?
He asks you that
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You're starting a story about Vandeberg's motives out of the blue as if we should be familiar with what he did, as if you know what he thought, without any evidence, without indicating how certain you are about this. I'm missing the backstory of the backstory.
Yup.
There is nothing true about this .. in fact I’m wondering if inertia is working on his fiction writing or something, as this is completely confusing ..
It is false. I can't quite tell if @inertia is speculating in which case he is being misleading by not being clear on that and presenting it as a sort of fact, or outright lying.
I disagree
Sun and his Chinesr Communist exchange buddys now have a liquidity issue.
If sun wanna go to court cuz of the Softfork, what about using clients stake to hostile takeover community property?
Neither the blockchain, nor steem, nor the Reward Pool, nor stake by other people on exchanges is owned by sun.
As I said, they have a liquidity issue and Im not going to sell any steem for less than 5$
I recommend you to do the same ;]
Exactly, the exchanges need to pay.
They should've asked both sides before taking this leap of faith.
Anybody selling for less than 4usd should never get another upvote, IMO.
Man I’m starting to believe those whole skull hacking rumors about that server your in.
It’s been said publicly who wrote the code.. go home, you’re drunk
WTH are you talking about?? Where did you come up with this nonsense? Our decision to soft fork had nothing to do with any of Steemit's employees and they had zero influence or involvement in it.
You're wrong on this point and wrong on almost everything else in the post too.
The soft fork was developed first by witnesses. I won't comment on any possible input that might have come from any former Steemit devs, except to say that there was categorically no such input as part of the conception nor initial implementation of the soft fork.
For that matter, the concept and method was discussed by witnesses as a possible remedy for Ned's horrific mismanagement (perhaps an overly favorable characterization, but all the facts are not out I guess) of the ninja-mined stake dedicated to development of the ecosystem over a year ago. No Steemit devs had anything to do with that either.
You're entitled your own set of views, but not your own set of facts.
OK, smooth.
Look at you bend over like a little bitch who was just put in his place.
You’re a fucking pathetic shill.
Witnesses acting belligerent about the importance of being friendly with major exchanges should be warned, "Don't cut off your nose to spite your face."
Excuse me? Steem should accommodate exchanges that colluded in a centralized hostile takeover attack on itself? LOL! They can deal with their stupid decision. They know the rules when powering up.
That's fine. That's Plan B, as I already explained, but they should begin their power-down right away.
In fact, if you are indeed too prideful to go with Plan A, I recommend making this part of your strategy. Something along the lines of:
"We will not hardfork a special rule, but we will consider changing the power-down to 4 weeks for the whole platform. Even if we don't bother with changing the rules, the exchanges will be fine getting a weekly power-down for 13-weeks. However, if the exchanges begin their power-downs now, this would be seen as an adequate gesture and we'll consider working on the hardfork that has a 4-week power-down."
Or something like that. And please remember to keep your cool when they stop the power-down after this hardfork so they have a chance to restart it again with the new rules. I would hate for you guys to wig out all over again due to something like that.
It's not pride
These are some fucking terrible solutions man.
After that we put in milestones in place. Once he delivers SMTs he gets to control certain percentage of funds, the next milestone and the milestone after that. We hold the stake ransom until he delivers on the promises Steemit.inc has been making these last 4 years.
4.The exchanges can fuck off. They fucked up and need to pay for it. That steem just left the market and is powered up (which is good for us) and Im not selling any Steem under 2 dollars. In absolutely no scenario do we allow them to powerdown in 24 hours.
Dude, its like youre rooting for the enemy? WTF? In no way do we win by going with your suggestions. You want us to capitulate while wer having an advantage over them and literally kill any and all integrity the chain has left.
Fuck no.
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Congratulations @inertia! You received a personal award!
You can view your badges on your Steem Board and compare to others on the Steem Ranking
Do not miss the last post from @steemitboard:
Vote for @Steemitboard as a witness to get one more award and increased upvotes!