![scoop.png](https://steemitimages.com/DQmQf8ttEZgM5yjQ1vMG6h6MfX1KjKDq7yuDzprpVotBWfp/scoop.png)

## Introduction

Yesterday, @ned [dropped a new video](https://steemit.com/steem/@ned/explainer-value-flows-on-steem-with-smts-video) talking about the economics of SMTs as it relate to STEEM. 

Some people in the comment section were worried that this "new direction" would distract Steemit from becoming a power website that competes with the likes of reddit, snapchat, Facebook and others. 

What I am going to explain today is how SMTs fits perfectly with the brand new front-end that is being worked on right now. I pray that the big reveal will be at SteemFest. :-) 

#### Until September 2017 - Working On The Foundation

From the information I was able to parse together by talking with people at Steemit and by watching the github like a hawk is that until September, they had to solve issues with their infrastructure. 95% of the bandwidth was entirely dedicated to how the blockchain could sustain all those apps being worked on as well as the enormous demand that was put on the blockchain.

All that seems to have been solved by the end of August. They mentioned that they expanded their front-end team in [The State of Steem - August Expansion](https://steemit.com/steemit/@steemitblog/the-state-of-steem-august-expansion)

Now, all resources seems to have been dedicated to releasing a powerful front-end and mobile app that will include the [hivemind protocol](https://github.com/steemit/hivemind) which is going to power the community feature. 

> hivemind is an off-chain consensus layer for Steem communities and API server for social features like feeds and follows.

#### How SMTs fits into the picture

I have been a long advocate of communities. I first thought that having multiple communities on the front-end would allow for a richer experience and fairer distribution...but I was wrong.

##### Anyone who complains about inequality of reward should rejoice

Under the STEEM reward mechanism there is only 1 hierarchy one can climb. Everyone competes to climb a single ladder. Even with multiple communities...there is only 1 reward pool and one power hierarchy. Because of the 80/20 rule, we would end up with only a handful of communities were curators will hangout to maximize their profits. 

By creating many domains or ladders one can climb, they have multiplied to possibility for people to find success within this ecosystem.

Without SMTs, the growth of communities could be stunted since there will be only 1 token all the communities would compete for. Scaling would be difficult since there is only so many whales and so much attention they can dedicate to curating content.

Now, with SMTs, we can create "new whales" and way more "power curators" who can affect different reward pools that are specialize around topics or usecases.

#### Example

Let's say @steemstem decides to build a community around it's mission: 

> Community Project to Promote Science Technology Engineering and Mathematics Postings on Steemit

If only the STEEM token was available, then the only way it would succeed is if enough whales congregate there and curate the content. But whales are scarce and their attention finite. There is only so much a few hundred or thousand people can pull off in terms of curation. Also, the current Steem Whales do not necessarily have the competence to decide which article should be rewarded.

But let's say @steemstem start their own token called STEM and distribute it to the people who participate to their community based on their contribution. They could have very high standards to make sure only the best stuff makes it to their community. 

Community features will have owners, admins, mods, etc. They could decide to have a policy to only reward genuine high value scientific papers. They can set it so that SteemPower doesn't affect rewards and therefore have much more control on WHO should be rewarded. 

As their community gets bigger, the value of their token will increase. If most of the voting power is owned by genuine scientists who value peer-review by their community, then a virtuous cycle can be created that goes beyond curation reward game theory. 

SMTs fits perfectly within this context. They create possibility for the communities within the steemit.com website that were not possible before. It also multiplies the domains under wish success can be found outside of the STEEM reward mechanism.