Steem is a token-incentivised social media platform that intends to reward users for their contributions to the community.
Steem.it was founded by Dan Larimer and Ned Scott. CTO Dan Larimer co-founded Bitshares and BitUSD. In his Steem.it autobiography, he explained that he founded Steem.it as an economic system and a community that expresses the basic premise “everyone who brings value deserves a share.” CEO Ned Scott met Dan through the Bitshares project and, after meeting in person, they decided to launch a blockchain project focused on community. They developed the business plan in January 2016 and launched the main.net in March 2016. The system issued its first payout on July 4th, 2016.
Steem is a token-incentivized and user-curated blogging and media platform, designed to minimize advertising revenue’s influence on content and quality thereof, an issue faced by many media platforms. Steem is one of Dan Larimer’s prolific projects that utilizes a Delegated Proof of Stake (DPoS) consensus mechanism to increase transaction throughput in less time and at the expense of less energy than preceding blockchain implementations. An emphasis on usability and low transaction fees is essential for a platform that is seeking to rival the UX of popular social media platforms, such as Reddit.
Steem’s primary offering is user-curated content and a means for rewarding contributions to the platform. Steem also has several features focused on providing a smooth UX, such as stolen account recovery and escrow services. Users have multiple keys for various degrees of required security for different types of actions on the platform, ranging from a key required for posting or engaging with content to one enabling users to restore their offline-stored accounts entirely.
Like other projects of Dan Larimer, Steem utilizes a DPoS consensus mechanism to enable short block times, with a new set of transactions committed to the chain every 3 seconds. A system of witnesses elected by token-holders within the DPoS system act to decide on which version of events to agree at each potential fork. As of Q3 2019, new developments will be funded by the Steem.DAO, which allows Steem users to propose and vote for work to be performed that is compensated with Steem dollars (SBDs). In early 2020, Steem was subject to major governance disputes, ultimately leading to a hard fork and competing network, called Hive. In February, the founder of the Tron blockchain, Justin Sun, acquired Steemit Inc. as well as a large share of STEEM tokens with the view to replicate the service on Tron. To a large part of the Steem community, Sun was perceived as a hostile actor whom they believed was intent on using his share of tokens to influence the governance of the network. As a result, Steem executed a soft fork, freezing Sun’s tokens, in turn leading to a tit-for-tat between both parties as they each introduced new validators, while many of Steemit’s employees resigned. Ultimately this led to a hard fork in March, with a rival network, Hive emerging that uses the same DPoS consensus mechanism and Steem codebase
STEEM tokens are one of several tokens on the Steem blockchain and are exchangeable for Steem Blockchain Dollars (SBDs), designed to be pegged to USD; STEEM tokens can also be deposited to produce Steem Power, the acquisition of more Steem Power also entitles holders to a greater share of the bandwidth on the network. STEEM tokens must deposit tokens in a 13 week lockup scheme to gain voting rights, whis is meant to discourage those with a short-term interest in the token from participation. The motivation to acquire Steem Power comes from user’s being afforded a fraction of the available network bandwidth, varying along with usage such that more bandwidth will be afforded individually when network usage is low, beyond which their actions on the network will be de-prioritized.
The Steem blockchain issues new tokens at a decreasing rate of 0.5% annually, starting at 9.5% inflation in December 2016. Of the new tokens issued 75% are allocated to a rewards pool which will be granted to content creators and curators on the network for their contributions.
Smart Media Tokens (SMTs) are proposed to help businesses issue use case specific token incentive structures that benefit from Steem’s exchange functionality and user base. Each SMT issued would have a configurable supply, inflation schedule and algorithms determining their distribution and thereby the types of content to be incentivized.