Steem Power Distribution Trends - August Update. The re-distribution skips down.
When I first joined Steemit a month ago, perceived inequality was one of the hot topics-de-jours. I started tracking trends in stake-holding distribution from 15th July. After two weeks of tracking, I submitted my initial findings two weeks ago. There was a clear and rapid trend of re-distribution, particularly from whales to orcas/super-dolphins. Two weeks on, the equation is changing once again - particularly in Week 4.
The stacked chart represents Steem Power distribution over the last 4 weeks. It's immediately obvious things are a lot more nuanced this time, relative to the first two weeks. Let's dive in.
Methodology
The core methodology remains unchanged. The goal of this study is to determine the changes in impact of various stake-holding tiers on the Steemit community over time. To that intent, I have been tracking Active 24 Hours Vests distribution from Steemd.com.
Over the last 4 weeks, I have collected over 300 data points. For further details about the methodology, do read through the first post.
All charts show data from all 4 weeks - naturally the second half of each chart is the new data. I've also added a polynomial trendline. Fair warning - there's some speculation involved.
Over 1 Billion Vests - The Whales
Week 3 continued the trend established in the first 2 weeks - the whales' stake-holding continued to decline, reaching a trough of 68.5%. However, in Week 4, their stake-holding has been trending up once again, hinting at a reversal to the general re-distribution trend.
At some point earlier this month, the whales have become more organized and have re-examined their curation priorities. They have also become more active. Two weeks ago, there were 26-30 whales active everyday. In Week 4, this number has increased to 30-34. Four accounts may not sound like much - but that's a 15% increase given the small population. This has had a significant impact, clearly responsible for the uptick over the last few days.
Looking forward, I expect the 1B+ Vests stake-holding to plateau out at 72% and then start dropping again, albeit at a much slower pace than we saw in Weeks 1 and 2.
10 Million Vests to 1 Billion Vests - The Dolphins (and the Orcas)
The orcas' (100 MV and above) spectacular growth in Week 1 was already showing signs of slowing down by Week 2. By Week 3, their stake-holding had pretty much plateaued. However, Week 4 brought a dramatic an unexpected reversal. The orcas' stake-holding has positively plummeted in the last few days. This is likely a direct result of aforementioned change in priorities for the whales shifting towards growing diversity across the community.
The 10MV-100MV dolphins fair much better. In weeks 1 and 2, they were essentially flat. This is the category which sees a lot of activity, building the foundation for future curators. Many minnows are promoted to dolphin status, while <100MV dolphins being promoted to the >100MV tier. The net effect was a flat curve due to slow re-distribution among the minnows.
Things are starting to change - we finally see a gentle upswing for this volatile tier in Weeks 3 and 4. I fully expect this trend to gain pace, ceteris paribus.
Under 10 Million Vests - The Minnows
We saw a hint of upward pressure from the 1 M to 10 M Vest tier leading to the gentle rise of the 10 MV to 100 MV tier. It is happening - the crucial 1 MV to 10 MV tier has skyrocketed in Week 4.
2 weeks ago, I had expected the stake-holding to trickle down, but it looks like re-distribution in Week 4 has skipped the dolphins and headed directly from whales to minnows. This uptick is a (flipped) mirror image of the decline in orcas' stake.
Looking further down, under 1 MV continue to hold negligible stake. There's a slight increase, but I don't expect these two tiers to take off as the successful <1MV minnows are continuously promoted to the 1MV-10MV category in short order.
TL;DR
It has been a dramatic week. We have seen some significant shifts. Whales are more active and organized than ever before with their curation efforts. They have shifted a major chunk of their re-distribution from orcas all the way down to the minnows. Instead of waiting for a trickle-down effect, we may be seeing minnows moving their way up the ranks to dolphin status. However, I'm concerned this shift may be too dramatic - orcas are essential for curating diverse content in the short term.
This would be a good time to remind ourselves that the Steem platform and the Steemit community are at a very nascent stage. Things will change on a daily basis, often significantly. Medium-to-long-term, I expect the re-distribution to settle down, particularly once the inflation rate for Steem settles at 100%. But for the next few weeks and months, it's going to be a wild ride.
Bonus - All Accounts Distribution
For those who requested Active 7 Days or All time trends in response to the first post, here's something for you. This is how the All Accounts trend looks over the last 4 weeks.
The movement is simply too slow to notice - there are way too many bots, investors and inactive users that dilute actual trends for impact on the community. Even Active 7 days masks the rapid evolution Steemit is undergoing.
I'm not sure I understand these results. The uptick in whale holdings is attributed to voting, but I'm not sure that makes a lot of sense. Curation rewards are <25% of the reward pool, which is about 2/3 of total dilution. Combining the two means that <16% of dilution is going to curation rewards, with only a portion of that going to whales (granted it is probably a large portion). A small shift in voting behavior on that <16% probably wouldn't explain much of a larger trend.
I think something else is going on here, like whales earning more content rewards, whales powering up, and/or reduced rate of whales powering down, possibly combined with other tiers powering down. Whales earning witness rewards is also significant but probably hasn't changed much.
The use of 24-hour active numbers probably plays a role here too, especially on the whale end. One or two whales shifting between active and inactive could make a measurable difference.
Certainly, I did address this. Just to quote myself -
I believe that is the major reason for the whales' uptick - I didn't really attribute it to voting. If it continues over the next few days/week, there's probably something else going on, but we shall see.
PS: Looking at the numbers today, it seems to be plateauing already.
This information is incredibly useful and informative and makes perfect sense.
A whale earns more by voting on a minnow than by voting on a dolphin.
Thanks for the insight, it's great to hear from a whale's perspective! That does make sense, and a healthy validation for the platform that it rewards voting on minnows more.
This is good news provided that rewarding minnows is not at the expense of simply rewarding quality content regardless of it's source.
Also I'd hope that the ability for whales to earn more by voting on minnows isn't factoring into their decision making, else that will be very short sighted also.
There's certainly a debate to be had here. If a dolphin created a post that was slightly better than a very similar minnow post, will the whale vote for the minnow still? How about if it was substantially better? Do the whales hold a lower bar of quality for minnows than dolphins? I don't have any answers here, but it'd be great if some whales chimed in.
This means, whales, yo, upvote me while I'm still a minnow. This deal doesn't last long, you know.
I wish I were a whale for one second just so I could give your comment a boost with my upvote. It deserves it for the humor.
Great analysis. 👌🏼
Excellent analysis! Thank you for putting this together. Have you also factored in who is powering down and who is powering up and how those actions impact VEST holdings? That, to me, seems like an important factor to take into account. If, for example, the orcas powered down the most and the minnows powered up the most, that might skew the numbers related to distribution through content curation and creation. If we could factor out all power ups and downs, would the data look different? I re-read your first post to see if missed something where you may have already addressed this. Sorry if I missed it again. :)
I'm interested in that, too, but so far I've no idea how to do that.
However we can estimate the effect of content and curation rewards on redistribution of power. At current mining rate of 800 STEEM/minute it's 800 * 60 * 24 * 7 = about 8 million STEEM per week. Of that amount, 7.75% (is this the actual number?) go into content/curation rewards - this is 625k STEEM. According to steemd.com,
total_vesting_fund_steemis now 125 million STEEM, of which 625k is exactly 0.5%.So even if all rewards went to a single group of steemians, e.g. to dolphins, that would increase their share by no more than 0.5%. Any increase beyond that point should be attributed to other factors, such as powering up/down or changes in activity.
My math might be off quite a bit, would be great if someone checks if it makes sense
Good question! I think someone asked the same in response to the first post as well.
The numbers are the Vests distribution itself, on a daily basis, so whomsoever may be powering up and down is directly accounted for. Even so, it's a negligible factor anyway, as the powering down process is very slow and takes 104 weeks, far beyond the scope of this time period.
I'm sorry, I don't quite understand what you mean here. If, on a given day, a minnow powers up 5000 Steem Power, they'd get around 18.3M VESTS, correct? That's not a content creation or curation distribution, but a financial one, right? If, on that same day, a whale finishes the first distribution of a power down which began 7 days before (for example, Ned could have powered down $700k in value each week, at one point), then their VEST amount would decrease (again, not related to curation or creation of content). Though the overall power down process takes 104 weeks to fully complete, the weekly impact of a large account powering down is significant enough to matter, right?
Sorry if I'm still missing something there. Thanks for answering my questions! :) I've been thinking about this stuff in terms of who is cashing money out at exchanges and who is putting money in. If the financial side of things end up being more significant than the curation/creation reward side of things, that's important for us all to know about.
Ah, I see what you mean. These numbers aren't just about content creation or curation - It's the overall impact. Whether someone increases their Steem Power holding through rewards or powering up is irrelevant - their votes will still carry the same weight.
Perhaps you are looking for statistics regarding exactly how much influence is flowing directly from the whales to the minnows and the life? I'm afraid I don't know how to track that - perhaps someone can devise an automated tool to do so. I think each account's activity will need to be tracked individually to get a precise picture. That's a different topic though!
Ah, I see. I incorrectly thought you were addressing power redistribution instead of just distribution. I get that now.
Since I already typed this out, I'll just include it, but I see what you mean now that it's a separate discussion:
When discussing redistribution, it can only happen in three ways, as far as I understand:
When analyzing the overall distribution, I think it's important to clarify which aspects are impacting it the most. If we create the picture, for example, that curation and content rewards are the primary driver of redistribution, and later we find out powering up and down (again, I don't know if that's the case, just giving an example) is far more significant, then I feel that's an important aspect of the redistribution discussion. Incomplete information could lead to incorrect expectations and, ultimately, frustration.
I hope someone can track that activity overall so we can have a better picture of how the money moves around over time given the various inputs to redistribution.
Thanks again for your answers and this great post!
It is relevant when you put forth theories about who is gaining or losing share and why. Are dolphins gaining due to rewards or buying in (powering up of SBD is some combination of these two)? Is the slowdown in orcas due to a slow down of reward earnings or have they stopped investing or increased power downs? These are all interesting and relevant questions. Not disagreeing that just the distribution numbers on their own are potentially important, but many times they raise more questions than they answer.
I don't know if I agree it is a negligible factor. The changes in all of these groups are small, roughly 1-2%. Power down is 1% per week so could account for a good chunk of that. Power up is not at a set rate.
I agree that for the whales tier, this is not a negligible factor, particularly since many are powering down. In fact I did investigate which whales are powering down, and determined the effect is roughly ~0.05% per day or ~0.4% per week for the tier.
The point though is that this is about overall Steem Power distribution - and powering down is just another way the distribution changes.
Like you point out in the other reply, it would certainly be interesting to see what the exact breakdown is - how much of it is due to powering up/down, author rewards and curation rewards? This is not something I have the data for, and will probably need an automated tool of some kind, which is way above my pay grade to create. :) All I can do right now is see how the overall distribution is changing. By "irrelevant", I didn't mean irrelevant in general, but just irrelevant specifically to this being about overall distribution trends.
Also, the changes are pretty drastic in some cases. For example, the minnows have gone up by 35% in the last 2 weeks. Sure, they are still only 2%, but a rise from 1.4% to 1.9% is pretty significant within their own niche.
Thank you for your inputs!
Great analysis. I am glad you are keeping the stats on this. It does seem like active users are increasing since dollar vigilante from the 4K range to 6k range but would like to see that increase more.
Yes, active users will continue increasing. In my last post I had mentioned how the influx of users was not keeping pace with the re-distribution. Well, that seems to be working out now - the minnows are getting more influential.
Good work man. I'm no data analysis expert, but is there a good possibility that things might've been "over-read"? If consistent building of any "original-content" is good sign enough for enrichment, then yea, this is quite like the time that I joined 2 months ago. I just tried to be consistent, submitting new stuff once a day. There's no real formula here.. but being consistent helps. It also pays to be someone popular. I'd be interested to know what the top dawgs are looking for. Are network effects all that valuable? And if so, what can those without network leverage do to get votes? Steemit's an interesting game..
Absolutely, these are just numbers. Anecdotally, I think most of us feel these shifts, this is just another evidence to support it. However, these shifts can be real, and can affect how people are creating and curating content. But most importantly, like I mentioned, I'm betting things are going to be shifting and changing rapidly given the platform has a long way to go before maturing. So, I don't know if it's worth reading much into this at all!
It'd be very interesting to dig deeper and also acquire first-hand accounts. Wanna do some kind of polling / interview? lol
That's a very good idea! It'd be interesting to see if steemers wish to comment on how the numbers illustrated here are affecting them. I'd be happy to collaborate on something like that. :)
Oh, it would also be cool to see the actual number of active accounts evolving over time. Have you made that graph yet?
Nope, I haven't really be tracking that closely. But thanks for the suggestion! Maybe I shall now.
This is amazingly insightful and helps us see the trends, not just between rich and poor but within several of the gradients. Thank you!
I don't know, man. I love that you're doing this and I'm really excited when you put a new one of these out, but the fact that you're just looking at the "Active Users" makes it extremely difficult to interpret the data just by looking at it. I mean, two things are happening at once:
How hard would it be to track something like "upward mobility?" Where you see how many accounts have actually moved from one tier to another?
This is simply about the trend in Steem Power (Vests) distribution over time. I think it's important to remember that. Of course, that implies a lot of different things, but it's an absolute data set by itself.
I do look at the movements, and add some observations accordingly. The number of accounts in each tier and movements there of are also available on the Steemd.com Distribution page.
Yeah, I know. And you do discuss the issue in your article; I don't mean to criticize what you're doing. I just find it a little bit un-intuitive when I try to interpret the graphs. :)
Great job. There's still so much to learn!