Yes, you've read that right. Steemit pays $65 Million USD in rewards to authors and curators every year.
Here is the math. The market cap of Steem is around $1 Billion USD at the time of writing this post [1].
Every year the total supply of Steem tokens are inflated by 9.5%. That 9.5% is distributed as rewards to witnesses, Steem Power holders, and authors and curators.
Witnesses deserve their 10% of the 9.5% inflation, because someone has to power the blockchain.
I can understand the idea of paying 15% to the Steem Power holders to compensate them for holding an illiquid asset. In essence, this doesn't make much sense either, because you're taking money from one pocket of a person to put it into the other pocket of the same person.
The biggest problem as we all know is the 75% of the 9.5% yearly inflation. 9.5% inflation means 8.7% dilution every year. 75% of that makes 6.5%. That means $65 Million USD is distributed to the authors and curators.
Sure, some of those authors and curators deserve their share of the $65 Million USD. But can you say that the content created in a year on Steemit deserves $65 Million USD?
If you had a billion dollars in the bank, would you pay $65 Million USD of it to the content created in a given year on Steemit? Does that content have that kind of commercial value?
If your answer to those questions is yes, I'm sorry for having wasted your time. Please close this tab and ignore this post.
If your answer is no, then we have to do something about it. I came up with a solution proposal to this problem and it is already being discussed by other Steemians in this post.
Come and join the discussion and let your opinions be heard. Moreover, please resteem this post, if you think that something needs to be done about the Steemit reward pool abuse.
Here is my solution proposal: How to Solve the Reward Pool Abuse Problem Once and For All
If we don't act now, it's a matter of time before investors of Steemit figure out that a significant portion of their investment is thrown away each year. When that happens, a selloff will start and Steem and Steemit will implode.
Disclosure and Disclaimer
At the moment of writing this post, I owned some Steem Power tokens. This post is for information purposes only and not intended to be business or investment advice.