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This is an open-ended question about the future of STEEM governance, bringing up the question of large but dormant accounts. Perhaps it is an issue that is dealt with in code, but I thought it would be interesting to bring up the question publicly to see if other people have already thought about it.

In the dPOS model of governance that STEEM has adopted, the leading witnesses are essentially our representatives for the direction of all things STEEM related, as they will be to ones to "vote" on which versions of STEEM they will run during a hard-fork event. So far, things in that governance model have been (relatively) smooth despite some (personal) concerns about granularity and the ability to dissent among the top witnesses. However, that isn't the scope of this post...

A quick review of the current witness list on STEEM currently reveals community members and independent developers with personal interest in the well-being of the STEEM blockchain and ecosystem. This is a good thing, as most of the witnesses in the top grouping have a technical and long-term economic interest in the well being of both the blockchain and the communities that are integral to the network's intrinsic worth.

However, it is possible that this state of affairs in the top witnesses might not be always the case... and might be nothing more than a temporary aberration in governance. Over the past year, the EOS ecosystem (which employs a similar dPOS) model has had the leadership positions change from mostly community and independent developers to large exchanges (as voting power is tied to tokens held/locked) with backroom quid pro quos appearing to be the norm among the large exchange accounts.

My question: Is it possible that this could happen on STEEM?

The current situation is that the large exchange accounts appear to have stayed out of the governance game here on STEEM. I would argue that this is not a stable situation as it appears to be born from a lack of economic incentive, and if #newsteem has taught us anything... accounts tend to behave in a economically advantageous way, with morality being papered over as an afterthought (/snark... I do prefer #newsteem over #oldsteem... but let's not pretend it is due to people finding their better selves!).

IF STEEM is going to be successful in the future, this economic balance WILL shift... making it more interesting for large and currently dormant accounts to start thinking about the possibility of having a witness. If the exchanges start offering staking rewards (like they are starting to do with other staking coins) to users for holding STEEM on their platforms... then there is an economic incentive (possibly greater than being minimally active on the platform...) for people to "store" their STEEM on exchange to gain a sort of passive income which would be funded by the block rewards from an exchange top witness.

Now, this could also be possible with large community accounts as well, although the danger there is somewhat lesser, as the community accounts would have a different interest in the long-term direction of STEEM compared to the exchanges... and more to the point, their holdings are (and would likely continue to be) orders of magnitudes less than the exchange accounts. The only exception to this is the Steemit account, but so far I believe that they have refrained directly participating in the voting process.... at the very least, not running their own witness.

Now, there is no reason why exchanges (and communities) shouldn't be able to run their own witnesses and participate in the governance process. However, if they do, and do decide to vote for themselves (or quid pro quo)... this is not necessarily good for STEEM governance in general. Likewise, it could be possible for the exchange accounts to heavily influence the outcome of SPS proposals....

The argument is there that there is an economic incentive for exchanges to be invested in the long-term survival of STEEM over the short term gain in block rewards... this is true, however, we have seen on other dPOS blockchains, that this is not seen to be the case in the real world. It is a good game theory, but evidently there is an incorrect assumption in assuming that exchanges are particularly invested in the long-term health of any SINGLE particular blockchain.

So, this is a potential problem for the future... this is situation that possibly will never pass... but given the right economic incentives, there is no reason why it wouldn't. Is it something that we, as a community, should be thinking about? Perhaps there are already contingency plans in place... or some sort of way to mitigate in code already?

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