HF21: The Future of Bid bots - Contributed by @Gandhibaba

in #steem5 years ago
One might be quick to say that HF21 will even enhance the use of bid bots given the 50% curation reward, but the opposite is true.

Image credit: @majes.tytyty

The clock is ticking fast. HF21 is just about three days away. I've read a couple of insightful posts about what to expect from the forthcoming hardfork. @Steemblog has also done a fine job to educate us about what to expect.

However, I've not been lucky enough to find a post detailing how HF21 will impact the use of bid bots on the Steem blockchain. So, since I cannot find what I would have loved to read, I've decided to write it myself. Be my guest.

To start with, I believe that HF21 will drastically have a negative impact on the bid bot market. That is, bid bots will most likely become less fanciful and even more difficult to use after HF21.

There are two important ways in which HF21 will impact negatively on bid bots:

HF21 Will Reduce the Voting Slot For Bid Bots

As you probably know, HF21 will introduce a 50/50 reward system for both curators and authors. This will mean that unlike the present arrangement in which bid bots get 25% curation reward, post HF21 will see bid bots getting 50% curation reward.

One might be quick to say that HF21 will even enhance the use of bid bots given the 50% curation reward, but the opposite is true.

A 50% curation reward for the bots will mean an automatic negative ROI for the bidders.

To mitigate the above scenario, the bid bots operators are left with two options. The first is to increase their default minimum ROI configuration to about 25% or more to save the bidders from a looming recession and stay in business.

The second option will either be for the bots to share their curation rewards with bidders depending on the votes purchased or refund a certain ratio of Steem to the bidders as soon as their bids are made.

The above approach is the second path that bid bots can follow to stay in business by keeping bots users motivated.

One thing is, however, quite clear from the above approaches. The voting slots for bid bots will decline sharply. For example, bots that can take up to 100 Steem bids from bidders per voting round, will certainly take less bids afterwards because of the new ROI settings they would need to implement to stay in business.

HF21 Will Discourage Delegation To Bid Bots

Today, the bid not industry on Steem is powered by millions of delegated Steem Power from those who want to make passive income.

Post HF21 is very likely going to see a situation whereby it becomes unprofitable to delegate to bid bots. With a 50/50 reward system, delegators may start to withdraw their delegations, hoping that they will get more rewards curating by themselves.

If the above scenarios play out, there are tougher days ahead for bid bots. I see bid bots gradually becoming undesirable in the days ahead. Well, only time will tell if these predictions are correct.

Until I come your way again, I wish you a full Steem ahead.