Curation & Voting- Steem Basics
There is a reward pool in Steem Blockchain in which the newly minted tokens are being accumulated in the pool at a certain fixed rate depending on the inflation rate. The inflation decreases at a rate of 0.01% every 250,000 blocks until it reaches 0.95%.
Of the total reward pool, 65% goes to the PoB(Content Creators & Curators).
What is PoB?
There is a reward pool to incentivize the authors and curators. The authors and curators share 50%/50% of the reward pool, which means 32.5% of the total reward pool is distributed among the authors, and similarly another 32.5% of the total reward pool is distributed among the curators.
Every user in this blockchain has a certain amount of stake called Steem Power(SP) which is also known as vested tokens. SP plays a bigger role in exercising the influence of power when it comes to distributing the rewards among authors and curators. More the SP more is the influence power to distribute the rewards.
Caveat: SP is an influence power to distribute the reward, SP is not paying that reward. So the reward is not coming from the SP, rather from the reward pool.
Being the first-ever decentralized social platform, Steem Blockchain empowers every user to apply their knowledge and determine which one is good content, hence should be rewarded and which one is a bad one, and hence should not be rewarded.
So the reward pool, the stake-weighted mechanism of influence power to distribute the reward, the independent knowledge of the individuals to determine good/bad content, all put together is known as Proof-of-Brain(PoB).
So what type of content the majority of the community will approve in PoB?
Ans- Good Content- Ideally original work, free from Spam/Plagiarism, or anything which adds value to the Blockchain.
From where the money comes when you hit the upvote button?
Ans- Reward Pool.
SP is just an influence power to distribute the rewards. Even if someone does not vote, or let's say no one votes for a day or two in the entire Steem Blockchain, then also Blockchain will continue producing the fixed amount of tokens as per the inflation. Those newly minted tokens will be accumulating in the reward pool.
Your post goes through a voting window of 7 days, the post payout matures at 7 days, and when it matures, you realize the reward by claiming it.
So it is the reward pool, it is the entire Steem community, that is paying you.
Upvote & Downvote
When you exercise the stake-weighted influence power, you will find there are two buttons in every post: Upvote & Downvote.
Upvote- If you hit the upvote button it will distribute the reward, and a certain amount will appear in the post payout subject to the stake weight(SP) and voting weight. So the reward will flow from the reward pool to the post being upvoted.
Downvote- If you hit the downvote button, the reward will go back to the pool, how much reward from the post payout will go back to the bool depends upon the influence power of the downvoter(stake weight(SP) & voting weight).
Put simply, Upvote is the process of distributing the rewards and downvote is the process of redistributing the rewards. Being a decentralized ecosystem, everyone is free to decide how to distribute and how to redistribute, subject to their influence power.
Note- Upvote earns curation reward while downvote does not earn curation reward.
Post Payout & Reward Setting
Every post in Steem matures at 7 days, and the reward is available to claim for both authors and curators. Once you click on the claim, it will be added to your wallet balance.
There are three types of Reward settings:-
- 50% SBD/50% SP
- 100% Power Up
- Decline Payout
The default setting is 50% SBD/50% SP.
Decline Payout means the author refuses to take any reward from the pool.
Let's say the post payout value is showing as $10. And the author has chosen 50% SBD/50% SP, then the rewards break-up will be like this:-
Author Reward
Author Reward= 50% of the total Post payout (which is $10 in this case) & this value is in SBD not $= 5 SBD
Now as the author has chosen the setting of 50% SBD/50% SP, this 5 SBD will be divided into SBD and SP equally.
So the Author Reward= 50% of 5 SBD= 2.5 SBD & 50% of 5 SBD (in SP)= 2.5 SBD worth of STEEM (at the current STEEM/SBD conversion rate, roughly 13.7 SP)
Author Reward= 2.5 SBD & 13.7 SP
Note- Please do note that Author's SP gets converted from SBD whereas the Curator's SP gets converted from USD. That is why the ideal designation of this unit is STEEM TOKEN UNIT(not $) which is a mix of SBD & USD.
This point may not be taken into account if SBD respects the peg of 1SBD= 1 USD every time, but it is not the case anymore and SBD hovers around 1 USD, not exactly 1 USD, hence this Steem Tokens unit(STU) seems profound in this case.
Curator Reward
Curator Reward= 50% of the total Post payout (which is $10 in this case)= 5 USD worth of SP (at the current feed price set by the witnesses, roughly 28 SP)
Curator Reward= 28 SP
Let's say the post payout value is showing as $10. And the author has chosen power up 100%, then the reward break-up will be like this:-
Author Reward
Author Reward= 50% of the total Post payout (which is $10 in this case)= 5 SBD worth of SP= (at the current rate of STEEM/SBD conversion rate, roughly 27.4 SP)
Author Reward= 27.4 SP
Curator Reward
Curator Reward= 50% of the total Post payout (which is $10 in this case)= 5 USD worth of SP (at the current feed price set by the witnesses, roughly 28 SP)
Curator Reward= 28 SP
Voting Window
In the context of payout maturity, the age of a post is considered as 7 days. During these 7 days, the post receives upvotes (or down votes if any) and the net amount matures at the end of 7 days and then available for claim.
Of the 7 days, the first 5mins of the post from the time of publishing in Steem Blockchain is known as Reverse Auction, in which a linear discount of curation reward applies.
For Instance, if a curator votes at 2 mins age of the post, he gives up 60% of his curation reward, similarly if he votes at 4 mins age of a post he gives up 20% of his curation reward. At 5 mins age of a post, the curator receives 100% of his curation reward.
Example,
The upvote worth of a voter is $1. As 50% of the vote value goes to the author and the remaining 50% is for the curator. The normal curation reward for the voter should be $0.5 worth of SP.
Let's say the voter votes a post at 3 mins age of a post, due to reverse auction he will give up 40% of his curation reward, so in this case, he will get $0.3 worth of SP. If he votes at 5 mins age of the post, he will get 100% curation reward which is $0.5 worth of SP.
The lost curation reward in the Reverse Auction window goes to the Reward pool.
From 5 mins age of the post until 7 days the curator receives full curation reward.
However, there is a caveat, if a curator votes after 6 days 12 hrs age of a post, the upvote worth starts decreasing at a linear rate from 6 days 12 hrs and becomes zero at 7 days. Voting at 7 days or thereafter will not generate any monetary value.
For instance, Let's say Steemcurator01's upvote worth with full weight is $200.
If Steemcurator01 upvotes at 6 days 12 hrs age of a post, then the upvote worth will be $200, (full value, full weight).
If Steemcurator01 upvotes at 6 days 15 hrs age of a post, then the upvote worth will be $150, (75% value, with full weight).
If Steemcurator01 upvotes at 6 days 18 hrs age of a post, then the upvote worth will be $100, (50% value, with full weight).
If Steemcurator01 upvotes at 6 days 21 hrs age of a post, then the upvote worth will be $50, (25% value, with full weight).
If Steemcurator01 upvotes at 7 days age of a post, then the upvote worth will be $0.
Put simply, the general voting window is from 5 mins to 6 days 12 hrs age of a post.
Please feel free to ask any questions related to Curation & Voting in the comment section. This publication aims to guide the new users particularly participating in Newcomers Achievement Program, Achievement Tasks 6: Understanding Curation & Community(This post covers only Curation & Voting).
So this post along with the post published by @cryptokannon on "Curation & Community" covers all aspects to guide you on the Achievement Tasks 6: Understanding Curation & Community(This post covers only Curation & Voting).
Thank you.
Cc:-
@steemitblog
@steemcurator01
@steemcurator02
@steemcurator03
@steemcurator07
@cryptokannon