Steemit, the blockchain-based blogging site where users get paid in STEEM tokens for content, is migrating its users, tokens, and decentralized apps to the Tron blockchain.
In a joint press release, the two companies announced Friday that their development teams will work together to migrate Steemit products and users to the Tron network, and ultimately switch out the STEEM token for a new Tron-based version.
What is not clear is what sort of deal took place to make this happen. Did the Tron Foundation or Tron’s CEO Justin Sun buy Steemit, which currently runs on its own Steem blockchain? Or did Tron make a big investment in the platform? We are not sure.
In the press release, Ned Scott, the founder of Steemit, referred to Tron as a “strategic partner” that would attempt to bring the ailing platform to “new heights.”
But then later, he proclaimed on Twitter that Tron actually bought Steemit. “Steemitans and Twitterers, after four beautiful years, I have sold Steemit to @justinsuntron,” he said. He also told followers that more news was forthcoming in an AMA on Saturday.
Sun has been on something of a buying spree lately. In July 2018, he purchased file sharing network BitTorrent. (BitTorrent founder Bram Cohen indicated there was a bit of an issue with payments though.) Last year, Sun bought blockchain-based streaming platform DLIve, which said it would migrate to Tron and replace it’s Lino token with BitTorrent’s BTT token. And in November, Sun admitted to being one of the investors behind the purchase of the Poloniex exchange, despite denying it at first.
Steemit’s business model
Steemit was launched in July 2016 by Scott and developer Dan Larimer, the current CTO of Block.one, the company behind EOS. That was when STEEM shot from 25 cents to $4.40, almost overnight, before collapsing down again to around 13 cents. Larimer stepped down in March 2017.
The company has not done well. In late 2018, it let go of 70% of its staff. In a blog post at the time, Scott cited “the weakness of the cryptocurrency market, the fiat returns on our automated selling of STEEM diminishing, and the growing costs of running full Steem nodes.” Last year, the platform also experienced some bugginess that saw it go offline for a few days.
But the bigger problem with decentralized media models is that journalists don’t necessarily want to be paid in volatile cryptocurrencies that collapse in value overnight. Civil, the ConsenSys-backed media platform that runs on Ethereum, faced a similar problem. Jay Cassano, now the editor-in-chief of Cointelegraph, who was writing for Sludge, one of Civil’s newsrooms, complained that the company hyped up returns of the CIVIL token, and then failed to pay, forcing him to borrow money to make rent.
At the end of the day, Steemit may have to do more than simply switch blockchains to build up its user base. But then again, maybe it’s more about the price of the coin than how many people are using it.