Why the Inflation-Funded Reward Pool Should Remain Intact

How should content creation be rewarded to make it more fair to authors and the blockchain?

The current system of rewarding content creation via the inflation-funded reward pool should remain the core mechanism for now. This pool, receiving 65% of new HIVE created each day (around 70,000 HIVE based on current inflation rates), works well to incentivize and compensate both content creators and curators in a decentralized, sustainable way aligned with the blockchain's interests.

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Specifically, the reward pool lets stakeholders distribute half the rewards from a post directly to the author, with the other half going to curators based on their upvotes. This puts voting power over rewards distribution into the hands of stakeholders, while still ensuring authors are motivated with significant compensation for providing valuable posts. The daily minting of new HIVE to fund these payouts ensures sustainability without taking money out of stakeholders' pockets.

In essence, the reward pool aligns the interests of contributors, stakeholders, and the blockchain, decentralizing control and participation while providing fair incentives tied directly to the production and promotion of quality content.

There is no clear evidence the system needs an overhaul right now. None of the proposed alternatives, like layer 2 token rewards or ad revenue shares, have mature and sustainable reward distribution models ready to replace the current inflation-based pool at a large scale. Unless or until a new system can demonstrate at least equally fair, broad, and sustainable compensation for all key parties over an extended pilot period, the status quo should prevail.

If alternatives do develop further, they may be able to complement the main HIVE reward pool with extra incomes someday, especially for social content creators. But the core inflation-funded pool should continue as is for the foreseeable future rather than risking the system's stability on unproven models.

Define what the reward pool

As defined in the sources, "This is a fund pool where rewards to content creators and curators come from. About 50% of the post payout goes to the author and 50% to the upvoters. It's a unique reward mechanism...because it incentivizes both the stakeholders who upvote and users who create content." Specifically, "65% of the HIVE inflation is allocated to this pool" on a daily basis (around 70,000 HIVE currently), giving stakeholders decentralized power to distribute rewards from this pool to content focused on their interests.

Source

From where should the rewards come?

For now, the bulk of rewards should continue coming from the inflation-funded HIVE reward pool itself. This aligns incentives, is working sustainably, and has risks in dismantling it before alternative models are proven. Additional secondary incomes that layer extra incentives atop the main pool could come someday from layer 2 dApps or ad revenues if those distribution mechanisms mature. But for now the core design should not be scrapped in favor of undeveloped theories.

Can rewards come from other than the reward pool?

Yes, secondary extra rewards could eventually stem from places like layer 2 token reward pools or ad revenue shares to complement the core inflation-funded HIVE distribution model. In fact, an upcoming testnet plans to allocate supplemental social publishing rewards this way. But these extra incentive layers should only augment, not replace, the primary sustainable pool without demonstration over years of results at scale indicating robustness.

In conclusion, Hive's inflation-based rewards system works well to decentralize participation and provide fair compensation for content creators and curators. Alternatives may supplement it someday, but cannot replace it without an extended trial period first proving improved sustainability. As no current model meets that bar, the status quo should be preserved, with significant changes only following irrefutable evidence of a better mousetrap over years, not months. There is no reason yet to dismantle a fair system aligned to community interests in favor of unbake.

Posted Using InLeo Alpha