Steem Basic Income
Steem Basic Income is a social experiment to bring a basic income to as many Steemians as possible. Members join by sponsoring others into the program. Steem Basic Income is delivered through providing regular upvotes to member content.
Introduction
Where does the value of your vote come from in Steem Basic Income? The purpose of this series is to break things down with as little math as possible. To make it easy for everyone to better understand how value moves within the SBI system. To let everyone make the best decisions about how to use SBI to help you reach your Steem goals.
Series Roadmap
In Part One, we explored what drives value on Steem.
Vote Values in Steem Basic Income - Part One: Blockchain
In today's post, we will explore each of the factors that determine how we allcoate value within the SBI system. After explaining the four factors in brief, we will talk about how those four factors are handled under our current system.
Later in this series, we will explore how the four factors are handled in the new system. After showing how those factors are managed in both our current system and in the new system that will be released soon, we will recap the changes. We don't want you to make big financial decisions to maximize your reward under the old system, only to have your value outcome dramatically change when the new system is released.
Value Factors in Steem Basic Income
External value factors may determine the total upvote value that Steem Basic Income distributes, but our own program design determines the share of that total that each SBI member receives. There are four key value factors internal to Steem Basic Income.
SBI Levels
The first factor is your SBI level, or the number of units for which you have been enrolled or sponosred. SBI units (or levels, or tokens, or shares) represent your level of subscription to our service. We originally called these 'shares' because they reward you with a share of the total value that we can distribute. Since 'SBI shares' has become a common term, we expect that a lot of people will still use it (especially with reference to SBI as contest prizes), but 'shares' indicate your subscription level. They are not equities. We are not a security.
Delegation
The second factor is delegation. When you delegate SP to @steembasicincome, it increases the proportion of the asset base that we control, so we reward you for that. You still have to be enrolled in @steembasicincome to receive this benefit.
Upvoting Bonuses
The third factor is upvoting. When you upvote Steem Basic Income accounts, this helps build our resources and increases our long-term sustainability. Our overall sustainability depends on the interplay between the four factors and the ways we reward them, as you will see when we talk about the way these factors actually impact our internal value distribution. We reward you for this contribution to our sustainability. Just like with our delegation bonuses, you still have to be enrolled in @steembasicincome to receive this benefit.
Redistribution
The fourth factor is redistribution. When an enrolled member becomes inactive, we are unable to deliver any value to them through our subscription upvoting service. Instead of letting that value go to waste, we allocate it to the other members.
Current Value Mechanisms
Having described briefly each of the four factors that determine value distribution within Steem Basic Income, let's look at how these work in the current system.
The current system was designed with manual tracking in mind, and it has some scaling issues because we expected to move into our new system before reaching our current size.
To start out, we use separate voting pools. Each pool controls its own distribution as a microcosm of the SBI program. This results in some strange behavior or unexpected disparity between members that are in different pools, and even for individual members when they move between pools or transition from inactive to active again. After explaining how the four factors drive our value distribution, we will explore how the pools impact things.
SBI Levels
Each 1 STEEM enrollment creates 2 units. We have determined the maximum sustainable SP level per unit to be 2 SP. As each pool grows, we monitor their effective SP levels and lease additional delegation whenever the effective SP per unit in that pool drops below 2.
Delegation
When you delegate SP to @steembasicincome, you receive 1 bonus unit for each 10 SP delegated. This is not a great return for delegation, and we really appreciate the members that have done this. Only stacking the upvoting bonus with the delegation bonus makes this a decent return.
Upvoting Bonuses
When you consistently upvote @steembasicincome, you get a multiplier on your units. If you upvoted 100% of our updates over the last 28 days with a full upvote, then you would get a 100% bonus on your unit count. This bonus stacks with any bonuses you might have from delegation.
Redistribution from Inactives
Since we can't upvote inactive members, their upvote value needs to be redistributed to the active members. We do this in three ways.
- We move inactive members out of the pools entirely after 28 days without posting. That means we don't have to keep our SP levels quite as high for each pool, and we don't have to lease as much delegation.
- We redistribute the voting weight for members that are inactive between 7 and 28 days within each pool. This is redistributed evenly across the active members, not by unit counts. Every member receives the same boost from this, no matter how high their level count is.
- We oversubscribe each pool's voting weight. Some members that are active within the last 7 days are already becoming inactive, so we set the weekly available weight for each pool at 7700% instead of 7000%. This gives everybody 10% more voting value that is distributed pro rata by effective unit levels (the level a member has after counting their bonuses from factors two and three).
Mechanism 1 moves members out of the pool system entirely, so it effectively redistributes the value from those inactive members across the entire system. Mechanisms 2 and 3 happen within each pool. The inactive % within each pool can swing around quite a bit, so the value members receive from these redistribution mechanisms may vary significantly from pool to pool.
Pool Structure - A Fifth Factor?
After taking all the unit levels and applying the various bonuses, we identify a target SP level for each pool. Sometimes we raise the target above 2 SP to help keep the SP ratios consistent across pools, but we don't allow the target to go below 2 SP per effective unit.
Depending on how members are distributed between pools, and what their levels are this can have odd results. As a member grows in a pool, we will keep leasing more delegation for that pool. When they outgrow the pool (their upvote in that pool would be two high), we move them up. We can't un-lease the delegation, so it leaves the pool with a higher ratio, either until the effective levels of the pool grow into its total SP again, or until the delegations expire. Since members growing their levels grow into bigger pools, it usually means waiting until leased delegation expires. This means some pools have a higher weekly value per unit than intended, and it can take a long time to fall back in line with the other pools.
Voting weights are managed manually in Steemauto, and we round every upvote % to the nearest whole number to make the rebalance process manageable. If your vote would be 1.49% you get 1%. If your vote would be 0.51%, you also get 1%. If your vote drops below 0.50%, you get moved down a pool. That can exaggerate the impact of a voting weight rebalance, since you may be getting upvotes nearly twice what you should be (rounded up from 0.51% and then move into a lower pool where you are rounded down from 1.49%) That would cut your vote by almost 2/3 and seem totally inexplicable. It's not very consoling to hear that it was cut because you were getting more than you deserve for a while.
Finally, all values are calculated on a weekly basis, and all factors in this discussion are based on weekly values!! Since your weekly value is actually divided by your posting frequency, then changes in your posting frequency may also result in exaggerated swings in your vote value when your pool is finally rebalanced again.
What Do You Think?
Did we knock these factors out of the park, or did we strike out and then round the bases anyway? Now that you've heard what we think the key factors are, how would you fix them? We will explain how each factor will be handled in the new system in our next post!
Enrollment
If you want to get involved, or to increase the share of basic income that you receive, enrollment is pretty straightforward:
Just send 1 STEEM to @steembasicincome. Include the name of a Steemian to sponsor in the transaction memo (preceded by @). You and the person you sponsor will each receive 1 share in the program. You can sponsor any active Steemian, it does not have to be a current member.
If you're unclear, please check out our full transaction memo guidelines and then let us know if you have any questions.
@steembasicincome/steem-basic-income-updated-transaction-memo-guidelines
The official currency for enrollment is STEEM. Please allow up to 7 days for your enrollment to be processed.
Questions?
Please read our recently published FAQ. Most questions are addressed in our FAQ or in the additional resources that it suggests. If you still have questions, ask in the comments section or join us in our discord channel. To review your share counts, we recently introduced our new SBI Member Lookup Tool.
