Hey,
I am reading quite a bit of stuff on here from misinformed people, so I thought I'd do a refresher on how the SPS works.
the sps in a nutshell
it's pretty simple, 10% hive inflation goes to a specific account steem.dao as HBD (hive backed dollars, a token that tries to stay at 1 USD value).
Then people can create proposals for 10 HBD. Where they ask for a daily amount of HBD. In order for them to receive that money. They need to get votes, it's the same as witness votes so it's hive power of an account + it's stake proxied to it. And he needs to get more votes behind him than the return proposal, is just a proposal that acts as a threshold : proposals with more votes gets paid out, proposals that have less votes don't get paid.
Steem.dao ? I thought this was hive !
So the name. We don't really have a new name yet, there are a lot of propositions, you can see some of them in the title. I'll call it SPS in this post out of habit, but I am indeed talking about the hive proposal system on hive and not the on on steem.
Yes the blockchain code still sends money to an account called steem.dao, we will change this in the future, it's just a minor thing for now and we have much higher priorities at the moment.
Who controls the steem.dao account ?
I saw here and there that the hive hard fork was a cash grab for witnesses because now we own all of the tokens from the ninja mine. This is not true, nobody owns the steem.dao account. In fact you can see on hive https://hiveblocks.com/@steem.dao that his keys are locked, it's because it's a special account like @null
Nobody can use that account to post, vote, transfer tokens or whatever. The only way for tokens to go out of that account is via proposals and in HBD.
So if only HBD can go out, what happens to all the HIVE on that account ?
It's currently locked. In a future hardfork (soon:tm: the code has been partially done by myself and @netuoso) we'll have a system where that hive will slowly get converted to hbd and thus available to be used for proposals. We decided to do it that way instead of converting everything to hbd during the previous hard fork because there are huge security and economic impacts in converting that much hive to hbd at once.
For instance you can withdraw 1% of the sps funds per day, for instance as of this time of writing there are 454,813 hbd on the dao, which means there's "only" 4548 hbd available per day. If we converted these 83 millions hive to hbd, a bad actor could potentially withdraw hundred of thousands of hbd in a day.
The sps is just a cash grab for witnesses, I only see them getting funded
That's a critic that I see often, and to a degree you're right, it's mostly top witnesses that get funded, but the reason is not the conspiracy thing that you think where we witnesses (I manage a top 20 witnesses so I would know) get together to exploit hive as much as possible.
The truth is, to reach high witness ranks like top 30-35, you need to convince/impress an enormous amount of stake to vote for you. Rank 35 is about 25.5 million HIVE as I'm writing this, top 20 is 60 million HIVE. These numbers are incredibly high. And if you managed to get that much stake to rally behind you, because they like what you do and trust you with governance issues. Then most likely that same stake will vote for you if you were to do a proposal (and that proposal is not bs obviously).
The sps is just a fund decided by stakeholders, and stakeholders want to "invest" in proposals that have the highest chance of success, and obviously they will trust someone who has been there for years more than someone who just arrived. And more often than not on this chain, if you have been there for years and are actively contributing to the community, you have a witness.
My point is, the fact that witnesses get voted in for proposals more often than non witnesses is just a side effect of how stake weighted voting and trust works.
That doesn't mean you can't get voted in because you're not a witness. And that doesn't mean we are hoarding all the hbd for ourselves.
Do you have other questions about the sps ?
Feel free to ask them in the comments :)