A quick look at Steem's rewards for curator-investors

in #penny4thoughts3 months ago

If we want people to invest in Steem, we need to explain the benefits of curation. Steem isn't just a blockchain that rewards content creators, but it's also a blockchain that rewards investors who are willing to engage in manual or automated content discovery.


A couple months ago, @cmp2020 posted that in recent times his bot voting account, @cub1 has been accruing curation rewards and interest at a rate of about 30% APR (You can join the account's voting trail, here). Personally, I've been wondering if that is an outlier or if it's typical for Steem curation at the moment. With the recent launch of the steemdb.io block explorer, I have been able to get an inkling about the answer to that question using data from the last 7 days.

This evening, I pulled the curation numbers from 19 Steem accounts of varying sizes, and graphed what I found. Here is the graph:

image.png

The X-Axis, across the bottom, lists the effective voting power of an account. The Y-Axis on the left-hand side shows the APR that the account is returning. This includes curation rewards and 3.26% "interest" in the form of blockchain inflation. Note that in the case of delegations, the interest is paid to the delegator, not to the voting account. (This analysis did not include any fees that may be paid to "bid bots" or payouts to delegators. It also doesn't incorporate power-ups or power-downs that may have happened during the previous 7 days.)

And here are the numbers:

image.png

I control some of these accounts, but not others. For the ones I don't control, I made a best guess as to whether they're bots or operated manually. "Effective SP" is the SP in the account after subtracting outbound delegations and adding inbound delegations.

Observations

It's not obvious to me that there's an advantage for accounts of any particular size, although small accounts may exhibit more variability. All the way from ~60 SP ($12) to ~4,000,000 SP ($800,000), accounts are currently returning similar amounts - between 10% and 45% APR, with a trend line centered around 25% APR.

It's also not obvious to me that there's any advantage for either manual or bot voting. Returns on bot and manual accounts all look similar to me.

Discussion

Having been here for four years now, I can say that these returns are far above what I would normally expect. I assume it's because of the reduction in competition after the recent community split. In the long run, we have seen returns more in the neighborhood of 5% to 15% on our accounts. I hope and expect that competition will return and the rates will go down again. (Isn't it strange to be hoping for a lower rate of return? But to me, that would signal a more robust ecosystem and hopefully a higher value on STEEM itself.)

Additionally, this list of accounts is undoubtedly biased, since I basically just pulled the numbers for arbitrary accounts as they occurred to me.

In my opinion, the good news here is that the blockchain seems to reward accounts of all sizes in consistent fashion, regardless of whether they're operated by manual voters or by bots. We appear to have a "level playing field".

The one thing that concerns me here is that there's no obvious indication that content discovery skill plays much of a role. Information about that may become more clear under longer time scales, but the new block explorer hasn't been online for long enough to supply much historical data on the account curation pages. In order to see the role that skill plays, we'd probably need to look at more accounts for a longer time period at the smaller end of the scale, so maybe that'll be a future project.

In closing, I'll repeat that if we want people to invest in Steem, we need to explain the benefits of curation. Steem isn't just a blockchain that rewards content creators, but - perhaps more importantly - it's also a blockchain that rewards investors who are willing to engage in manual or automated content discovery.

For discussion, what do you think is the ideal ratio of voters to authors on the Steem blockchain? My gut feeling is that for the ecosystem to really thrive by reliably bringing attractive content to the surface, we need somewhere between 100 and 1,000 curators for every content creator. In order to attract that level of curation interest, shining a spotlight on curation rewards may be helpful. Please comment with your own thoughts.

The experimental @penny4thoughts account will distribute 18% of the rewards from this post to the authors of relevant and substantive replies.

Disclaimer: This is my opinion, not investment advice. Do your own research.


Thank you for your time and attention.

As a general rule, I up-vote comments that demonstrate "proof of reading".




Steve Palmer is an IT professional with three decades of professional experience in data communications and information systems. He holds a bachelor's degree in mathematics, a master's degree in computer science, and a master's degree in information systems and technology management. He has been awarded 3 US patents.

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Thank you for this Steve, a most interesting post.

We are trying to encourage people who can to set their Diary Game posts to 100% Power Up so they accumulate a bit more SP to make curation a more attractive prospect.

At the low end of the SP scale the rewards are so very small as to make a curation not worthwhile.

It would be interesting to present some numbers to newcomers particularly to show how accumulating SP can begin to bring them curation rewards.

The Steemit Team

At the low end of the SP scale the rewards are so very small as to make a curation not worthwhile.

Yeah, this is something I was thinking about after I made this post. There's a bit of a paradox here. The smaller accounts are the ones that are best able to increase their returns by discovering attractive content and front-running the bigger voters, but the incentive is not really there to get them to spend a lot of time doing it.

Your idea of rewarding people in the diary game for powering up 100% might help with that. Lots of people can spend less time per person and accomplish the same thing. I was also thinking it might encourage investment to have the web site report curation rewards as a percentage, in addition to the 7-day total. (with constant influx from rewards and interest, possible outflows from power-downs, and potential delegations in both directions, I realize that this isn't as easy as it sounds, though...)

I've also had a long-time idea of having a curation league, where people could compete for the best curation percentage during a period of time like a week or a month, but it seems pretty hard to prevent someone from cheating by following themselves with alt-accounts, so I'm not sure how well that would work.

It would be interesting to present some numbers to newcomers particularly to show how accumulating SP can begin to bring them curation rewards.

I agree with this. It would probably be good to automate the kind of collection that I did here, run it regularly, and incorporate many more accounts into the analysis so people can get a real idea of what their investment can get them. Again, easier said then done, though...

@remlaps, I am trying really hard to understand how curation works on this system - but I need the kindergarten explanation because, as a newbie (recent returning Steemian), I still don't understand very well how the curation process and BOTS, work. Honestly, I am torn between trudging onward or putting my time and energy elsewhere because my returns are so small.

I wrote Discussing the factors that drive Steem's curation rewards back in June. Also, that article has a link to The Ultimate Guide to Voting Power (with cartoons, formulas, and code references!), which was written by @biophil in 2016. Maybe those will help.

Oversimplifying, the way it works is that 50% of every post goes to the author and the other 50% gets split among all the different voters, but it doesn't get split evenly. In general, the earlier voters and the voters with the largest stakes get bigger shares of the rewards (except that you generally don't want to vote on posts in the first 5 minutes because there's a voting penalty during that time in order to slow down the bots).

So, as a voter, your goal is to vote on posts that you think will eventually become valuable, but do it before they receive any large upvotes. Right now, voting on well-written posts in the diary game before @steemcurator01 or any other large voters do is probably a decent voting strategy. Or maybe check the "New" section in Project HOPE for well-written posts that haven't received big votes yet.

The other thing that's important is to make sure that you vote numerous times every day, at least 10 full-power votes per day. You can monitor your voting power on steemdb.io/@openmindedtravel, and you never want that to sit idle at 100% for very long (or at all).

Bots is a more complicated topic, and I don't really know what options are out there. I've written some of my own, but they're not really suitable for general use. I'd suggest exploring the site https://auto.steemdb.online/, but I'm honestly not very familiar with what's available. Maybe someone else can provide some more insights.

Hope that helps!

Hello @steemcurator01 - quick question. I am trying to find out if it is accident or design that my first diary game posts haven't been curated. My first post was - but none of the ones that followed of which the oldest one is now 4 going on 5 days old. I am doing a power down which after Monday I can go back to 100% SP again because I am only doing it in increments. So my question is - am I not being curated due to the power down? Or are there really that many entries to curate that you just haven't made the rounds yet? Thanks!

Thank you for being attentive to our questions. I have read and resteemed. #SteemOn

Hello there @remlaps, I have followed who is the owner of @remlapse1 who also voted from my Steem-Power-Up post and found you. You seemed to really be knowledgeable with the platform in terms of data analysis. I also wanna learn much about it. Can I be your apprentice?

I am really active in the TheDiaryGame right now and APPICS which runs on the Steem Blockchain. I also agree on your principle that it is worth rewarding people who also give a very engaging comments because they actually read the post no matter how long it is.

We seldom really find these kind of engaging members nowadays.

I am a graduate of Electronics and Communications Engineering in one of the Top Universities here in the Philippines.

I am also a pet-lover and has two dogs. I hope we can connect sometime. Even though comments only. Looking forward to a response from you.

@remplas, thank you for your interesting post.
I see your numbers, and I conclude that supervising with a bot and manually the result is almost the same.
In your opinion, with SP 3650 what is the weekly increase in SP?
What number should you strive for to supervise effectively?

Your account also has about 5,000 Steem delegated to it, so you're voting with about 8647 SP. The range I saw in my observations ran from about 10% through about 45%. For your effective SP, that would range from 16 SP to 75 SP per week (including curation rewards + blockchain inflation).

Looks like you got about 21 SP last week in curation rewards. Adding in blockchain inflation would put you around 16% APR, so that puts your account solidly in the same range.

To be in the same range without the delegation, the curation rewards for an account with 3650 SP would run from about 5-20 SP per week.

It's important to note that this was a snapshot of a small number of accounts at a single point in time. It's interesting to observe, but not really possible to draw any long-term conclusions from it, so I don't really suggest striving for any particular number.

@remlaps, Thank you so much for your valuable answer.
I realized that with my delegated power, I should better supervise and strive to get up to 75 SP per week.

Greetings @remlaps it has been a long time since I want to see the platform emerge again and that the value of steem returns to its moments of glory, but it is just at this moment where I am beginning to improve and dedicate myself more to steem, perhaps I do not have much power voting, and even for a long time I saw the need to depend on my Steem Power for financial reasons, as you will see I live in Venezuela and here the situation is super difficult, with a minimum salary that does not reach 4 dollars and a kilo of meat that almost exceeds that. But during the last 2 months thanks to steem I have been able to overcome that crisis and I have been able to improve even to the point of canceling the shutdown and having my first Steem Power start since I started on this blockchain, I have also seen how the rewards for healing me They have risen every day, I am attentive through the application https://steemworld.org/ where I keep track of the rewards I receive from the cures, although I do not understand much about this inflation and APR. Most of the cases I get it out of logic, but I see that some give me more healing rewards than others even voting in the same way, but I assure you that I want to understand it and I will do it, also together with my wife we ​​are teaching Several people that we attracted to steem the importance of voting, it has not been easy because little they understand it, but obviously I go through that and I try to get them too.

I think that content like this is necessary again for all the new users that are arriving, and even it works for me because I want the people I help to know what the platform is. Thank you!

Hi STEEMIT friends Good Morning.
Awesome post on Steemitblog
Like Comment back on my profile
thanks for cooperation
we will work togather

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