Steem (STEEM): tokenomics, risks and score
The first blockchain social network paying users for content, which was subject to a contested takeover in 2020 that split the community.
What Steem is, and what it does
This is an NFT or culture asset. It is tied to a collection, marketplace or creator platform rather than to a protocol that earns fees.
What the STEEM token itself does: It can be staked to earn rewards, though a large part of those rewards is newly issued token rather than earned revenue.
Where it runs: Steem. Mechanism: Delegated proof of stake for social rewards. It has been running since 2016, so roughly 10 years.
The facts
- TICKER
- STEEM
- SECTOR
- NFT and culture
- CHAIN
- Steem
- LAUNCHED
- 2016, so around 10 years of operating history
- MECHANISM
- Delegated proof of stake for social rewards
- MAXIMUM SUPPLY
- No hard cap with ongoing issuance
- VALUE CAPTURE
- Staking only
- UPGRADE CONTROL
- DAO governed
- VESTING
- Complete
- LIQUIDITY BAND
- Micro cap. Thin, often a single venue or pool. Treat the quoted price as indicative only.
How the score breaks down
Each dimension is explained on the directory page, and the reasoning behind it is taught in the Academy research process.
Supply and value capture
High ongoing issuance. New tokens are minted continuously and holders are diluted unless they participate. Holders can stake to earn rewards, though much of that reward is newly issued rather than earned revenue.
Changes go through token holder governance, so control is distributed but influenced by whoever holds most. Ownership is heavily concentrated. A small number of wallets hold enough to determine the price on their own.
Where it is strong and where it is not
- Has operated for around 10 years and through at least one full bear market
- Audited, with published reports
- Fully open source, so the code can be independently reviewed
- Vesting is complete, so there is no scheduled supply overhang
- Heavily concentrated ownership means a few wallets control the outcome
- High ongoing issuance dilutes holders who do not actively participate
- Thin liquidity. Check order book depth before assuming you can exit
- Has 1 recorded incident on its history
Incident history
Following an acquisition, several exchanges voted with customer deposits to install new validators and override community governance. The community forked away to a new chain in response.
Our read
The main risk
Governance was captured using exchange held customer funds, and the active community left for a fork.
Before you buy anything
Check the contract address against the project's own documentation rather than a search result or a screener link, since impersonation tokens with identical names and logos are listed constantly. Check the order book depth before assuming you can exit at the quoted price. And write down what would make you wrong before you buy, not after. The Academy thesis module covers why that single habit protects more capital than any indicator.