How much in Steem Rewards is created each day from Upvotes?
I am challenging myself tomorrow to dive into the blockchain database to find out how many rewards in practice are given out each day... And if this has changed after today's fork.
I am challenging myself tomorrow to dive into the blockchain database to find out how many rewards in practice are given out each day... And if this has changed after today's fork.
Steem has an inflation rate of 9.5% per year currently. (This is set to decrease approximately .5% per year until reaching and staying at .5% yearly inflation) There are approximately 235 million Steem at present. Doing a bit of quick math leads to about 430,000 Steem in each weeks reward pool or 61,000 Steem per day. At $2 per Steem we should see total rewards of about $120,000 per day. As price of Steem fluctuates the dollar value changes on rewards, but the underlying Steem rewards remains constant.
The system pays out a variable ratio of Steem to Steem dollars depending on the current valuation of the Steem dollar. At times when the Steem dollar has been below $1 USD the blockchain has completely stopped producing them until they reached parity with the dollar again. Currently SBD are worth more than a dollar so they are produced at a high rate.
Actually, I'd forgotten that rewards are only 75% of the inflation, 15% is paid out as interest on holding Steem Power, and 10% goes to the Witnesses running nodes and producing blocks to keep the chain running. This system was very different from the original economics of Steem and was adopted in an earlier hardfork. Here's a link to the notes on that fork from last December. Link
Today's fork should not have fundamentally changed these amounts. What it did was change how influence was calculated. In the past, the power of your vote was equivalent to your Steem Power squared. So if you had 1 SP and someone else had 1,000, their vote would not be 1,000 times more powerful, it would be 1,000,000 times more powerful! This is what had the early miners and adopters (whales) wielding a very outsize effect on the platform. Now influence is calculated linearly. Think of it as 1 SP = 1 vote. So having 1,000x more SP means 1,000 times more voting power, not 1 million!
Everyone but whales is seeing their voting influence increased because the whales voting influence is decreasing by a corresponding amount. Thus the nickname "Equality" for this hardfork.
Thanks for the detailed responses, I've just had the chance to read them in full this morning!
There's about 25 accounts which have around 1,000,000 in Steem Power. Now I am getting around $0.10 per upvote with 100 Steem Power and before was probably getting around $0.01.
So by my rough maths, now these 25 accounts have 10,000 x my $0.10 = $1,000 per upvote. If all 25 of these accounts upvoted 5 times in a day, wouldn't that use up all the steem? Or would the upvote reward be reduced accordingly?
I think my estimate of $0.01 per upvote before the fork must be wrong, since by that they would have (10,000 ^ 2) x $0.01 = $1,000,000 per upvote?
You're welcome, and you're correct in thinking the upvote reward would be reduced accordingly in the instance you described. Your voting power will always fluctuate in response to what others are doing, it doesn't really define a set dollar or Steem reward. Rather it is your influence in voting where the reward pool is distributed.
Since the reward pool is fixed and finite, we're only steering the rewards, not creating them. In your example the whales would definitely see the dollars their votes were giving decreasing as more votes were cast by other whales.
Imagining an extreme scenario to the other side... if by some strange circumstance nobody on Steemit voted on a given day except for you... your vote would direct $100k plus of rewards simply because everyone else essentially abstained!
One real world scenario that people often can see but not understand is how their post may actually decrease in payout value as it approaches the full week, even with the price of Steem stable. This can happen because most of the time the votes we receive come in early on in the week and then die off. If later in the week a bunch of whales get more active, some big news happens that results in a few posts raking in major payouts, etc. your payout can decrease as the active voting shifts some of the reward pool another way. It's a never ending tug of war contest and the rope can move back and forth all the time!
I believe it is 54% of all steem transactions !
=]