Ultimate Guide for Minnows - what are VESTS?
This is the first in a series of posts in which I will discuss important Steem terminology and details of the inner workings of this platform in a way that minnows (like myself) can understand. There are many excellent posts covering what I intend to discuss but I wanted to tailor this series to newbies and really break down some of the concepts into bitesize, digestible pieces of information.
"Knowledge is Power" and Steemit is no exception to this rule. The purpose of these posts is to communicate a new piece of knowledge that can be easily and quickly digested rather than bombard the reader with a thesis of information.
In this first post, I will give a simple explanation of the term "Vests".
Vests are essentially shares of Steemit. By owning "Vests", you effectively have a stake or equity in Steemit.
But what is Steem and why is it different to Vests or Steem Power?? This is an excellent question which most of us newbies have asked ourselves.
If you think of the entire Steem capitalisation which has a current market value of $533,806,000 and a supply of 250m units of Steem), the majority of this supply is held in a Steemit fund.
This is depicted in the diagram above. The important message to get from this post is that MOST of the steem in existence is held within this fund. When someone buys into the fund (by "Powering Up") they are given shares of the fund which are demoniated in Vests (Currently 1000000 Vests = 480 Steem).
This is all I'm going to cover in this post as I think the ecosystem of Steemit is complex and understanding one key concept at a time will be more beneficial than a comprehensive explanation of the whole system in one post.
Next I will discuss why the ecosystem is structured this way and where Steem Power and Steem Dollars come into the equation.
Thank you for reading.