I have began working with @cass and a number of other users on a Steemit Educational Programme. We are all working on simplifying some of the more complex aspects of Steemit into an easy to understand guide. You can see @cass's work on this project here and here
Consider this post a very small start to this project...
Over the past few weeks, I’ve heard a number of users asking this question, but for many, there is still a lack of clarity on the topic. I’m going to attempt to simplify Vests, in a way that everyone can understand;
This is how I understand Vests…
What are Vests
Steem Power is essentially Steem held in a fund. Vests are Shares in that fund.
I'm going to refrain for providing definitions on Steem, Steem Power, Steem Dollars, however if you would like to read a little more on these topics, I have posted previously here.
For every Steem Power that exists, a corresponding Steem exists. With Steem Power you have limited liquidity (you don’t have access to your underlying Steem immediately), and you have zero transferability (you cannot move Steem Power anywhere). In exchange for these limitations, users get rewards for there long term commitment to Steem(it) in the form of extra Steem Power.
This is similar to many financial instruments in the real world. There is often a trade-off between larger rewards, but diminishing access to your wealth.
Vests are shares in the Steem Power Fund. If a user takes no action on the Steemit Platform, his/her shares will remain static in quantity, just like shares in a financial fund. Also, like shares in a financial fund, the underlying asset base can change with new investor’s joining, other investors leaving, or fund performance being good, but non of these action change the amount of shares you hold in that fund…
How does you Vest balance Change
- You can Increase your Vest’s balance by; Creation, Curation or Powering Up.. You could also be a Witness/Miner
- You can Decrease your Vest’s balance by Powering Down
Powering Up essentially creates new Vests. This action does not reduce the value of other users Vests, as the share creation is relative to the Steem investment.
Powering Down destroys Vests. This is an on going process at the moment with larger levels of Powering Down compared to powering up. Total Vests Decreased by 0.56% last week
To find out how many Vests you have;
Hope this helps
Feel free to suggests amendments where you feel necessary. And look out for the following icon (designed by @cass) for follow up work on this project