Whereas, for an instamine or stealth proof-of-work mining launch where a significant portion of the money supply is mined over a very short period of time mostly by the developers group (and their insider friends), there’s no significant competition and thus the developers (and friends) mine the tokens at nearly zero cost (relatively speaking to the price they sell them for), and thus a very significant portion of the money supply has been effectively pre-mined at nearly zero cost by the developers who the investors’ expectation-of-profit depends on. Thus this is economically equivalent to an ICO and thus those tokens are effectively “ICO-issued” tokens under the Howey Test’s criteria. This is what transpired for Dash, Steem, and Bytecoin. In Bytecoin’s case, the stealth mine may have been over a long period of time, because afaik it was not publicly announced for up to year from the date of the genesis block.
My only "objection" is that I don't think there was an "instamine" or "stealth proof-of-work mining" in Steem, there was the [ANN] thread, and there was the code available for everyone. No matter how much easy the mining process could have been, there would always be some people that could not mine at all. If we make the claim that Steem was "premined" because people could not mine it if they didn't have a degree in IT then we can also make the claim that most coins are also "premined" because they require at least some basic IT knowledge, lets also not forget those that don't even own a pc, everything must seem "premined" to them. What I'm trying to say is... where do we draw the red line when we talk about "premine" based on how "difficult" is something to mine?
Imo, it's too far fetched, that's all.
You can look at economic reality here. As Hyperme.sh pointed out, the mining was not competitive. It was at near-zero cost, based on asymmetric and privileged information, and therefore very much unlike competitive mining that takes place over a significant period when there is ample opportunity for information to disseminate (and the developers are not admittedly and deliberately exploiting their exclusive access to that information to gain a very large non-competitive advantage).
So the
outcome is effectively (about) the same as a premine, regardless of how they got there. (And conversely such an outcome would most assuredly not be achieved with competitive mining over an extended period as with Bitcoin or Litecoin.) Achieving the equivalent outcome of token distribution and investor funding of developer efforts via a different mechanism is effectively synonymous with looking past form to function (i.e. "economic reality") to me, but I'm neither a prosecutor, nor a judge, nor a jury. There is a small caveat here but I don't think it ultimately changes the conclusion so I will omit for brevity (and economy of my writing effort).