The Steemit project will update its network to create an automatic financing system for development proposals, through a decentralized autonomous organization (DAO) incorporated into the protocol of its Steem blockchain.
The changes will be made by means of a hard fork ( hard-fork ) programmed from the Steem blockchain, which is expected to occur on August 27. It will include, in addition to the Steem Proposal System (SPS), a Steem Economic Improvement Proposal or EIP. Steemit recently announced the release of Steem v0.21.0, the official version of the new network software, which contains the hard fork- compatible updates, which they called HF21.
According to the information published in the official blog of the project, the new SPS involves the creation of the SteemDAO fund, from where the development proposals will be financed. The system will allow users to present their proposals publicly so that the Steemit community can vote for the most valuable projects, which add long-term value to Steem. The voting model is similar to the one the project uses to vote for network witnesses.
The DAO will receive single initial financing from Steemit of 200,000 STEEM, equivalent to USD 35,385 at the time of writing this note. The funds in STEEM will be converted to the second token of the project, Steem dollar (SBD) since SteemDAO only accepts this asset.
Michael Vandeberg, senior blockchain engineer at Steemit, said the concept was proposed by a developer who is part of the Steemit community, who identifies as @blocktrades. The Steemit team decided to directly commission the development of the proposal.
«This is a great step forward in the development of Steem. We look forward to more partnerships between Steemit and our community. The Steem Proposal System will help make it a reality, ”said Vandeberg.
As explained in the Github repository of the project, other forms of financing are foreseen, such as donations. However, at the request of the witnesses, a long-term financing mechanism was also included in the update, which takes 10% of the general inflation (extracted from the rewards group) for SteemDAO. This implies that the fund to reward content will go from 75% to 65% of the budget.