Both are useful: Literal redistribution (by the largest stakeholders selling) and voting with an intent toward widening the base of rewarded posters. But rewards themselves themselves are relatively modest.
A total of about 20 million Steem will be given away in rewards over the next year (57600 STEEM per day x 365 days = 21024000 STEEM; for simplicity we can assume that curation rewards have been entirely eliminated and this all goes to posters), while 180 million is distributed to existing SP holders (mostly whales) in the form of antidilution payments. That will make the supply about 320 million, of which 20 million will have come in the form of rewards. Some (in fact a lot) of those posting rewards go back to current whales (think about this the next time you are voting up one of Dan's posts, or mine should I make any) or to established, successful posters.
Nearly all practical redistribution must come from selling.
I agree with everything you said about the improvements to curation that have already been happening. I very much disagree with the constant shifts in the rules just as people are starting to work within the existing rules and we haven't even seen the results of those efforts yet (for example the new Project Curie program). The constant tweaks create way too much uncertainty for those trying to build initiatives and business models that are reliant on the platform rule set. It is for this reason I have already curtailed some of my investments into curation-based initiatives. Not only this change, but potentially others that may be coming soon (see Ned's reply) make it an unattractive environment to try to operate.
I cannot agree enough. This was the same problem experienced with BitShares as projects that were building applications for BTS suddenly were informed that the rules/code had changed.
Moonstone is but one example. The abrupt changes from the onset, up until Dan chose to focus on Steemit, set them and others back and completely eliminated a few projects altogether. I think it's safe to say that a large portion of the BitShares Community was not pleased with what appeared to be an unhindered desire to make drastic changes to a system many felt was fine as it existed.
Whether or not the changes were ultimately the best decision for BitShares the platform, the Dev's or the Community is completely subjective and an entirely different discussion from how those changes affected the projects attempting to build upon the platform as it existed.
While I agree that changes need to be made to create the best system possible, I feel that those decisions should have been made prior to a public release and especially prior to allowing any third-party to begin building applications around the platform.
Slapping "Alpha" and "Beta" next to a logo, while still pumping the platform to the masses in the press is a bit spurious. On one hand it allows the Devlopers to say, "Well it's still in alpha/beta". On the other hand they are out there pushing this alpha/beta onto the masses inviting them in before the basic structure of how the platform will work has been settled.
Some may argue that they need that wider user base to determine what changes need to be made, and that may be the case. But at the same time the types of people that are being invited in (no offense to anyone) to this alpha/beta platform have no clue what they are getting themselves into most likely and I feel that the Developers are well aware of this fact. If they aren't, then that's ... well I'll just leave it at that.
And at the same time you have companies attempting to build their own business models around an ever changing set of rules and they are being invited to do so. Those companies are of course assuming all of the risk themselves and can choose not to build upon the platform until a more stringent set of rules are adhered to for longer periods of time, but there are no guarantees on that either, as we saw with BitShares.
I'm sorry to say that I don't have a solution. This field is not my expertise. I'm merely offering up my observations from the past/present and how I see things unfold, and how I see the same scenario playing out once again at Steemit. The good news is, it can only get better (I hope)!
You make a good point that selling is the most effective way to redistribute. The problem is, what is the incentive to buy if the curation rewards are restricted to 5 votes a day?
@smooth But surely the "meat" of the curation award is really in voting and then having a lot of people voting after you. If no-one is voting after you, you might as well use your five votes voting on your own stuff. Restricting the votes defeats the whole point about crowds discovering good stuff together by voting.
@alyssas it is 5 more powerful votes per day. Also you can vote more often if you voluntarily reduce power per-vote using the slider. 10%-power votes after the change will be about the same as regular votes now.
I think people are getting a little confused. Of course the changes are somewhat disruptive, but we have to remember that the 5 votes are really just 5 more influential votes per day, as @smooth reminds us. We can still vote all we want. It just becomes more diluted as we vote, which is not much different. The only difference is that our 5 votes we actually have some control over. Which I don't know. I think that's cool. It makes me feel dolphin-ish.