We believe all past and pending hard forks are in line with the [recently proposed constitution](/steem/@dan/draft-steem-constitution). Over the next week a major irreversible distribution of Steem and Steem Dollars will be made. There has been a heated discussion on slack over which algorithm should be used to distribute funds.  

## New Curation Reward Algorithm

The hottest issue of dispute is the curation rewards algorithm. This algorithm has changed 4 times including the initial release.  Steem 0.2.0 changed it by accounting for integer overflow.  Steem 0.4.0 (April 29th) changed it by converting from `r^3/R`  to `r^3 / R^2` and Steem 0.8.2 changed it to another equation all together.  All of these changes have been made in an effort to achieve a reward distribution proportional to effort and stake.  

The first two changes were clear "bug fixes" designed to bring the code in line with the intended algorithm.  The third change is different.  It is a change to the intended algorithm with an effort to achieve an intended result.  

There are currently 2 options that are on the table that witnesses must decide between by July 4th.

### Steem 0.8.3 
This version of the software uses the Steem 0.4.0 algorithm to distribute curation rewards prior to June 24th and uses the new algorithm for rewards after June 24th. Under this algorithm 40 people get 99% of curation rewards, 6 people get 75% of curation rewards, 3 people get 50% of the rewards, and 2 people get 42% of the rewards.   

### Steem 0.8.2 
This version of the software will distribute all pending rewards using the latest algorithm which is designed to remove a strong bias toward rich accounts getting a disproportional rate of return on their votes. Under this algorithm 60 people get 99% of curation rewards, 13 people get 75% of curation rewards, 5 people get 50% of the rewards, and 4 people get 42% of the rewards.  

### Summary of Options
In both cases the distribution of curation rewards is heavily biased in both cases towards whales who are actively voting.  Going forward there will be more people with larger stakes voting, bots will no longer have a speed advantage over humans, and total curation rewards will be reduced by 50% in favor of increasing content rewards. The result of this initial distribution is a small percent of total steem and will be quickly dwarfed by the steem allocated over the next 3 months.  In other words, there is relatively little long term impact in terms of wealth allocation.

In total less than 60 people are meaningfully impacted by the difference between 0.8.3 and 0.8.2.  Of those impacted, most have expressed a desire to support the best interest of Steem over any personal profit.  We commend the team spirit of everyone involved.

## Principles 

At stake is the question of principle. Principles have value and are what unite each and everyone one of us under the common banner of Steem.  For many people a system that violates their principles is a system that they do not want to be involved in. As a community it is to our benefit to adopt principles that are widely accepted and highly valued in the market.  

The principles of keeping promises, following contracts, and respecting property rights are sometimes at odds with the principles of stakeholder voting power, democracy, code is law, and greatest good for the most people. 

Even when we have clear principles choices are not always clear when there is an unresolvable contradiction. Regardless of which route the community decides (0.8.3 or 0.8.2) there will be people who feel that promises were broken. On one hand there are the masses of users who believed us when we said everyone could earn something meaningful by voting, and on the other hand there are a few people who studied the fine print of the code and decided to vote accordingly. 

What is most important is the perception of everyone outside our community who is trying to decide if they will join. This is especially true of people with a large amount of money they might invest.  Dana Edwards recently wrote a quality article on [Ideological Security vs Financial Security](/crypto-news/@dana-edwards/ideological-security-vs-financial-security-which-comes-first).  

We believe that whenever there is ambiguity, conflicts should be resolved with a bias toward the code.  

## Steemit, Inc Supports 0.8.3

This has been heavily debated inside Steemit, Inc.  We have a desire to see everyone rewarded for their participation, but we also have a desire to respect the code, intent, and documented communication.  We would also like to reward those who discovered the “bug” in the curation reward algorithm. The resulting debate has forced us to find solutions that will improve Steem.

The bug in the curation reward algorithm may have allocated about 1% of the Steem market cap in an undesirable manner, but it is just below the proposed threshold of justifying any kind of major retroactive change.  The impact of adopting 0.8.2 would be similar to the impact of losing well over 1% of all Steem to a theft or hack. By adopting 0.8.3 we can retain support of a large portion of the cryptocurrency community who might perceive 0.8.2 as theft  (even if it technically wasn’t).  

## Conclusion

We recommend all witnesses upgrade to 0.8.4 which will include an important bug fix, but is otherwise identical to 0.8.3.  Witnesses will need to upgrade by July 4th. We also recommend the community work together to refine an official *constitution* that all Steem users should be asked to sign by vote.  This constitution will help us avoid / resolve future conflicts and communicate to the outside world what our community stands for.