As you probably know STEEM is an inflationary cryptocurrency. This means that, unlike Bitcoin, STEEM doesn't have a fixed supply. New STEEM is continually being created to reward authors, curators, witnesses and Steem Power holders. In order to calculate how much STEEM is added to the reward pool per day we must first understand how the inflation rate works. So let me explain...
STEEM inflation
When Steem forked to version 0.16.0 in december 2016, an instantaneous 9.5% inflation rate was set at block 7,000,000. It started at 9.5%, but even the inflation rate itself is not fixed. It decreases at a rate of 0.01% every 250,000 blocks. This narrowing contineous until it reaches a floor inflation rate of 0.95%. This happens on block 220,750,000 and I hope we are all still alive by that time. It will take approximately 20.5 years.
Blocks? How does that work?
As you know, STEEM is a blockchain: A chain of blocks. Each block contains data. On the Bitcoin blockchain, for example, each 10 minutes a new block is added to the blockchain. This new block contains the latest Bitcoin transactions. The STEEM blockchain processes all data much faster than Bitcoin does. Instead of a 10 minute 'block time', STEEM has only a 3 second 'block time'. Every 3 seconds a new block is added to the chain which contains everything that happened on the network in that short period of time. Posts, comments, votes, transactions and so on and so forth.
What is the current STEEM inflation rate?
Now that you understand what blocks are, let's calculate the current STEEM inflation. Here is the formula:
current_inflation_rate = (978 - (head_block_number / 250000)) / 100
'head_block_number' is the number of the latest block on the chain. You can find the current value of 'head_block_number' on https://steemd.com. Let's fill in it.
current_inflation_rate = (978 - (13,387,926 / 250,000)) / 100 = 9.24
The current inflation rate is 9.24%. As said, this decreases at a rate of 0.01% every 250,000 blocks (every 8.68 days).
How much STEEM is added to the reward pool per day?
Now that we know the inflation rate we can go back to our main question. Here is the formula to calculate the number of STEEM that is added to the reward pool each time a new block is produced (every 3 seconds):
new_steem = ( ( virtual_supply * current_inflation_rate ) / ( 10000 * BLOCKS_PER_YEAR ) ) * CONTENT_REWARD_PERCENT;
- virtual_supply: The virtual supply is the supply of all STEEM + all SBD if all SBD would be converted to STEEM at the current price. Go to https://steemd.com again to find the current value.
- current_inflation_rate: The value we just calculated.
- BLOCKS_PER_YEAR: A fixed value of 10,512,000. 1 new block every 3 seconds, makes 10,512,000 new blocks annually
- CONTENT_REWARD_PERCENT: 75% goes to authors and curators. 15% goes to witnesses and 10% goes to SP holders.
new_steem = ( ( 252,970,254 * 924 ) / ( 10000 * 10,512,000 ) ) * 0.75 = 1.66769773613 STEEM;
So each time a new block has been produced, 1.668 STEEM is added to the reward pool.
- Every 3 seconds: 1.668 STEEM
- Every minute: 33.354 STEEM
- Every hour: 2,001.237 STEEM
- Every day: 48,029.695 STEEM
Answer to our question:
About 48,029 fresh STEEM will be added to the reward pool today, but because it depends on multiple factors it might be slightly higher or lower tomorrow.