My Thoughts: Steem Witnesses meet with Justin Sun (1st contact)

in PowerHouseCreativeslast year

Well.. I finally had a bit of time to listen to the YouTube recording of the Zoom discussion between the Tron and Steem sides of this huge blowup. I definitely recommend that everyone listens in on this recording... it does start to lay out some interesting reasons about why we are currently in this fight!

However, that said... jump ahead to around 5 or so minutes, otherwise you are going to be listening to a lot of dead time!


Well... if you are on the STEEM blockchain, either you know what is going on or you are just dumping your content and running to milk your "investment" without any interaction with the rest of the community. Hmmm... at least you are better than people who think that the best way to fight the hostile takeover of the consensus witnesses is to shitpost as much as possible and farm your own comments with self-voting... yes, a crisis does make people reveal their true colours!

  1. Tron (Justin Sun) buys Steemit from Ned.
  2. There is no mention of how the Steemit stake will be used (in the past, there were statements (but not legally binding?) that it would be used for funding development and wouldn't be used in governance actions. Questions about this were NOT answered in AMA.
  3. Consensus Witnesses soft-fork to lock the funds of Steemit.
  4. Steemit retaliates with the help of 3 exchanges to take over the consensus witness positions.
  5. Community rallies to reclaim half of the Consensus Witness positions.
  6. Contact is made between the two sides (in this recording).

This video recording

So, this audio recording of the Zoom discussion between the Tron and Steem sides is the first contact point since all of this blew up in everyone's faces. As such, it is a start to discussions and it doesn't serve the purpose of coming to a binding agreement on how to progress or what to do. I'm not totally sure that was understood by everyone on the Steem side of things... however, that points more to the decentralised and individual nature of the old consensus witnesses rather than the corporate and controlled front of the Tron side!

The recording does bring up very interesting information, as it seems that there has been misunderstanding and miscommunication on all sides. Most notably by the previous CEO of Steemit... more accurately, a slight omission of information...

My Thoughts


The Tron side (led by Justin Sun...) have a much more professional front to their discussions. However, it does appear that they were woefully under-researched about the mere technical aspects of the STEEM blockchain. This is quite a surprising discovery, as one would think that a large investment in anything would require more technical understanding of the underlying technology... after all, we aren't supposed to be thinking that the TRON Foundation is run by a retail investor with a mobile phone app!

This was apparent in their lack of knowledge about what the price feeds of the Witnesses contribute to the system... and also to the lack of understanding about the code that could bind the Steemit account from governance, whilst allowing for free transfer of the STEEM.

It is also interesting that Justin Sun really sees this as only a money making business venture. Of course, this doesn't mean that he can't be allied to the STEEM vision of the community... however, it would only be an alliance of convenience whilst the two goals were aligned... He is clear that he is in it for a profit and the quality of the ecosystem is a side-effect and path to get there. Now, many people on STEEM also have a similar motive... but many also have it in a lesser way!

It is clear from the recording that the TRON team were not fully briefed by the old Steemit CEO about the pre-mined Steemit Stake and the statements (which the community feel to be binding...) that were made by Steemit about how it was to be used. This is a pretty serious omission by the old Steemit CEO, and I think that the TRON team have cause to be pretty pissed at the old CEO for that...


On the Steem side of discussions, well... it was never going to be a polished show... however, I have to say that I was most impressed by @starkerz. I found that there were others that were too confrontational and that was not constructive in a first contact meeting. However, I see that other people in comments and elsewhere seemed to prefer that... I find it less useful. Understandable, but not wise.

The soft fork was intended to be a temporary measure to lock the Steemit stake until there was a public declaration (re-declaration) from the new owners about how the stake was to be used. However, due to the omission of information from the old Steemit CEO, it appears that the TRON team only saw a hostile seizing of the funds that they had rightfully purchased. Thus, the response...

The STEEM side (at least at the moment) has the advantage of of momentum and eyes in the crypto space are paying attention to see how this plays out. I would have to say, there are some who think that this fight has been a proof the strength of dPOS, however, I would have to say that this has highlighted the flaws of dPOS. There is no other blockchain community that would have stood up so strongly to fight... this is due to the types of things that were built on STEEM, not because it was dPOS. Most other communities would have dumped their coins, cut losses and run for the door! Here, we have fierce loyalty to the chain, community and each other... perhaps in the reverse order, which is why there was such a strong reaction!


From the information that is now available... it appears that this current set of troubles stems from the understanding of what the Steemit stake means. The STEEM side understands (due to previous commitments by the last CEO) that was to be used for development and NOT governance; meanwhile, TRON believed it was obligation free, like any other token purchased on the market. In between all of this, the old Steemit CEO gave assurances to the STEEM community whilst perhaps not informing the new owners (TRON).

This has led to the misunderstanding and our current impasse... However, it is a good thing that the two sides have come together to talk... after all, most conflicts don't stem from no reason... and most have a common misunderstanding of intent that spirals out of control. Thankfully, this misunderstanding is now clear in this case.

There was a demand from one of the STEEM side that the TRON team remove their votes from the "new" witnesses. I don't think that is going to happen... they could do it, but from a tactical point of view it doesn't make sense. If they relinquish the rest of their consensus witnesses, then they are at the mercy of the old witnesses and have no power to block what they would consider "malicious" intent. I think this is perhaps something that can come down the road if they agree... but for a demand at the first contact meeting, it is a bit of a tall order!

I think that further down the line, if the TRON team really don't want to engage in governance, then they should have no problems with the governance lock (code) on the steemit and related accounts. Note that this governance lock doesn't freeze the market abilities of the STEEM, they can still move and sell it. I really do think that they need to learn more about the ecosystem... as their stake is also indirectly delegated to projects that contribute a great deal of value to the STEEM ecosystem (like @steemcleaners...). This needs to be understood before thinking about selling it off...

Finally, we should really think about the ability to lock the governance voting rights of the exchanges. They (mostly...) have realised their error... but this is not the sort of thing that you should leave to chance if you have on-chain governance.

So, all in all... talking is always good. Now the two sides understand each other and it is bit of common ground to build towards. Each day better than the last!

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 last year (edited)

FFS... in the time that I wrote this post... we dropped from 10 to 2 witnesses.

I don't think the recording shows that Ned didn't tell Justin about the prior promises for the stake, and actually I think if you read between the lines it more likely confirms that Justin DID know of this. A non disclosure agreement between Ned and Justin RE the sale was mentioned in the recording - by the nature of a NDA of course we don't know what was covered, but it would be much harder to believe that Justin had no idea of prior commitments to the stake, than it would be to believe that he did know about it, didn't consider prior commitments by stinc to be legally binding to him after he purchased the stake, and that he is pretending ignorance while communicating with witnesses to buy time while he continues to try to gain more Steem to stake, push through a hardfork with short power down time, and allow the exchanges who helped him to get their steem liquid again... because that is exactly what his actions have been. Don't listen to the words, watch the hand holding the knife.

EDIT - and actually, you can just listen to the words as well - how many times in that talk with the witnesses did he say variants of "the past history between you and Ned is between you and Ned, and has nothing to do with me". That doesn't read to me like he was unaware of the past history, it reads to me like he doesn't think it has anything to do with him and his purchase of the stake. It is debatable if the multiple promises on the chain RE the intended use of the Steem stake amounted to a legal obligation that would transfer to a new owner of the company, particularly when those promises were worded in such a way as to keep it open e.g. in the Steem road map which many people point to there is wording that the uses listed are not an exclusive list. Not to mention, the programmatic powerdown and sell off that Stinc was doing the entire time was NOT used for development and was instead used to send $ dividends to Stinc shareholders, so precedent was already in place for exactly what Justin stated he planned to do with the stake - sell it and profit from it.

 last year 

I did notice those words as he did keep going back to them... However, I took it to mean that past agreements, as known to him now, are not binding (even if they were legal in a blog post?) to him?

But yes, I do agree that the Steemit stake has never really properly and legally defined... We just chose to read what we wanted in what was said.

However, I'm not really sure what the end goal is if he planned to just dump the Steem? That in itself seems not as profitable as you would think. A consensus witness takeover also doesn't seem really required for that either (until the soft fork). I do think that there is more at play as well... But I don't see what the goal is.

I see 7 as of now. (four hours after you wrote this comment)

Posted via Steemleo

 last year 

Seven now, there was an agreement with the Korean community proxy to keep a balance whilst things were being worked out.

That's pretty cool. I would like to see more information about that.

Posted via Steemleo

 last year 

Does this change your opinion expressed above?

 last year 

No, it doesn't. I still don't think we should lord it if we regain an upper hand and make demands. Gentle concessions and understanding will be better.

Keep in mind that the exchanges are going to be tilted towards tron if we look like we are going to shaft them for their actions.

 last year 

I completely agree. The debate is if steemit owns their stake or is a custodian. Justin saw an opportunity and says he did his legal due diligence and isn't going to just give in.
He won't stop calling them malicious hackers who tried to steal his private property until they present a lot of convincing evidence it is not his private property.

 last year 

Honestly, I don't think that there is proof that would hold up in a court... and crypto isn't really a regulated space... Steemit might be, but what would we do... a class action, that is a joke and a token gesture at the best of times!

I think that the stake is a lost cause... the real problem is the broken governance model... but I think the witnesses are going to dodge that, and present the problem as the big bad exchanges and Sun.

 last year 

Welcome to the supreme court of Steem where whoever has the most is the court. No country or national court may interfere with our domestic internal affairs. Putside arbitration is the last thing I want. I have a feeling they don't care about us little guys. But they are definitely greedybenough to believe Ned and Justin don't get it either. Binance and Huobi said they won't get involved which means they will accept the out come as long as we don't punish them, too. I can agree to that.

There ate definitely other issues and fundamental flaws with Steem. Part of me wants to reset and find another blockchain, while part of me wants to hold on to the last satoshi and fork away.

Still, a good read and it’s not over yet.

 last year 

... and it's still going...

That's just unbelievable!

proxy.token votes put most of the puppets back in, that account controls over 6 million SP.

 last year 

Moving money will affect the witness standing (which I think is happening on their side, ours if from voting), I checked this morning and afternoon we have 7 witnesses, it would be healthy to move to ten each.

A follow on meeting should happen soon, a more level headed approach to resolve issues rather than point fingers.

Always two sides to every coin.

 last year 

Agreed, I think ten each... so no-one feels threatened, and able to veto any hard-fork proposals. This way, talks can proceed with the feeling that one side will just stomp on the other!... However, I am a little worried that the exchanges aren't powering down!

 last year 

Exchanges should never have got involved in this in the first place, boycott them and never use them again would be my advice.

If an exchange is using their power (being paid off) in this manner they are no longer doing their core business, how could anyone trust them! Let us see once this is settled what happens to their users.

Domino effect....

 last year 

Agreed... but there is no real terms and conditions there... after all, however, I think people do store crypto there for easy trading and non-technical storage. I prefer to do otherwise... but I do leave small amounts there... and lots of small amounts add up!

However, the biggest problem was that it was at all possible... this points to a flaw in the current dPOS implementation... after all, if a large account (exchange or otherwise) can have that much of an influence, then it was NEVER decentralised to begin with! We were just naive and didn't notice....

Thanks for your useful recap, @bengy!

(...) exchanges. They (mostly...) have realized their error

I wonder why @binance-hot has not yet started the power-down, despite having suspended the withdrawal of STEEM from all its customers (including me)

A huge hug!


 last year 

Well... they finally did it... I think in the end it was unfamiliarity with the chain, the fact that they would have to use CLI... and needing to be hyper cautious with moving (plus, multiple people needing to sign the transactions...).

We use STEEM all the time... but if you drop most of us in a different ecosystem, we would be just as confused!

 last year 

Australia has much in common with our English roots... Understating is one of them!

I listened and had much the same reaction. Now that the witnesses are shifting back, I'm not so sure. IMO, for someone with business savvy, too much was missed. Whether it was hidden or questions not asked, most of the answers are in the public domain. Surely Sun has minions to do that work? The line between Steemit Inc and the blockchain is but a blurry one.

 last year 

To me, it sounds like a rushed acquisition to try and get ahead of the EOS Voice launch...

I don't think so, Justin was buying Steem for the entire month (ish) since the rumors first started flying. Maybe the announcement on twitter itself was timed to coincide with voice but I am pretty sure the deal had been in the works for a while given his activity in acquiring Steem prior to his announcement

 last year 

Possibly, but how do you know that he was buying Steem tokens? I missed that bit.

I do think that he was still looking for a way to trump the Voice launch. That date was also known for a long time. To me (but I have no experience...), a purchase like this over a month seems a bit of a short time frame... However, my life experience is a bit different to these high flyers!

But weren't there rumours of this months ago? But yes, I think you're right. And I agree with @nickyhavey about the communication issue. Poor @andrarchy was hung out to dry.

 last year 

I don't know... there were rumours of everything from Samsung to anyone else buying...

Nice post @bengy the lack of communication all the way around was the key to this poop storm.

 last year 

Thanks... it is a right poop storm all right... but it does bring out the true colours in people, which is interesting as well!

Great synopsis of the meeting. Your thoughts are very similar to mine.

 last year 

Thanks... I would have hoped for a slightly faster resolution to all of this... but it doesn't help that our side is full of mixed ideas at best... and the other side seems to be a little untrustworthy or chaotic at best!

It will be interesting to see how it plays out!

Thanks for summarising it all and putting some balance across.

The takeaway here is, communication is always key :)

 last year 

Yep... a little less macho posturing!

Haha yea that too!

Thank you for this write up. I appreciate it a lot. 😊😊 now I have an idea of what was talked about. However, it's still unclear on what is going to happen next. We could only hope for the best of everyone in the Steem communities. I still believe in the communities here and am staying on to do my part in helping any way I can. After all, I'm just a small fish 😊😊

Posted using Partiko Android

 last year 

Yes, in all this power play... we are the ones that are stuck in the middle... I hope that the principal actors can put their egos away in a box and just come to a solution!

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I am frankly convinced that however it goes it will be a success ... don't you think? It was just needed a tsunami to move the waters!
If the value of STEEM is its community, the worst that JS can do is destroy the BC, not the community. The community will then be able to start STEEM 3.0 stronger than ever... right?

 last year 

I'm not quite so sure about that... the governance problem is really quite a big one and one that I am worried that will be glossed over. STEEM price is only holding even as people are buying to bolster the witness positions... after this is over, it will be unstable (possibly...).

I listened to it too and came to many of the same conclusions — and also that it’s good Ned has moved on. Seems like a weasel move to sell Steemit the way he did, evidently acting like there are no strings attached and it’s as straightforward as buying a car.

 last year 

Yes... I think that it is good that he has moved on... but one week later... we are still at an impasse!

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