Allow me to re-introduce you to the "Power Up 100%" post option
Guess what y'all, under current market conditions the power up 100% option is your OPTIMAL CHOICE for maximizing post rewards! This may sound like crazy talk but bear with me, I promise you there is method in my madness.
If you have been on this platform for any length of time, and particularly if you can recall the halcyon days when SBD soared high above $1 USD, you have undoubtedly been told that selecting the 100% power up option is a BAD IDEA with capital letters. However, this is actually only true when SBD is over $1. At the time of my writing, SBD has fallen to $.92 and let's just say the overall crypto market tide doesn't seem to be flowing in a positive direction.
So let's revisit the logic behind choosing between 50% SP / 50% SBD and 100% power up.
Steem Blockchain always assumes that SBD = $1
This is the key thing to understand. The Steem blockchain has a mechanism for determining the actual market price of Steem (the witnesses' price feeds), and pays out the SP portion of a post payout in the USD equivalent amount of Steem. The lower the price of Steem, the more Steem you get to equal the USD amount shown in the pending post payout.
There is no equivalent to the witness Steem price feed for SBD
The blockchain has absolutely no mechanism for determining the actual market price of SBD. If you select 50% SBD / 50% SP, the Steem Power portion of the payout will be in the amount of Steem equal to half the pending USD payout value... but the SBD portion will simply assume SBD = $1 and will pay you out SBD accordingly. This is great if SBD is actually worth more than $1 (you get more USD value than the pending post payout actually shows), but if SBD is less than a dollar you actually lose $!
Let's see some examples
Imagine you have a post displaying $13.333 pending payout. Assuming 75% author reward, $10 of the pending payout will go to you as the author. We will use the current prices of SBD= $.9327 and Steem = $.6077
Scenario #1: $10 author reward payout, 50% SP / 50% SBD
SP portion: 50% of $10 author reward = $5. $5 / $.6077 = 8.228 Steem paid out
SBD portion: 50% of $10 author reward = $5. $5 / $1 (remember, Steem blockchain assumes SBD = $1) = 5 SBD paid out
TOTAL USD payout value: (8.228 Steem * $.6077) + (5 SBD * $.9327) = $9.66 USD payout value
Scenario #2: $10 author reward payout, 100% power up
100% of $10 author reward = $10. $10 / $.6077 = 16.455 Steem paid out
Total USD payout value: 16.455 Steem * $.6077 = $10 USD payout value
Maybe SBD will jolt back up above $1 within the week, but it has already been 3 weeks since the last time this happened.
If you think there is a good chance SBD will remain below $1 a week after you publish a post, you should select the power up 100% option if you are trying to maximize post rewards.
NOTE If it is important to you that you can immediately withdraw a portion of your post earnings, then the 50% SP / 50% SBD may still be preferable as you can immediately withdraw the SBD portion without waiting for a power down.
How to choose 100% power up on Steemit.com
This option has become kind of buried with recent UX "improvements" to the main steemit.com website. These instructions may not be applicable to other front ends.
- At the bottom of the post editor, select "Advanced Settings"
- In the popup window select "Power Up 100%" from the drop down menu and "save".
Any questions?
Please feel free to ask questions in the comments. This isn't necessarily an intuitive subject, and I personally feel the existence of SBD, without a hard peg of any sort to the dollar, and without an internal price feed, just complicates things unnecessarily. If I had my druthers SBD would be eliminated entirely if it cannot be hard pegged to the dollar (my first preference).
Well, sort of. At this point it's worth noting that the peg will stop working if the feed price drops below (currently) $0.49, and SBD will become pegged to Steem instead of USD. (At a rate that depends on SBD supply but would be approximately 1 SBD = 2 Steem at the moment.)
interesting - that is new to me. Do you happen to know what section of the code that is on github? I sure hope it remains only theoretically interesting though we do seem to be approaching that price... :(
I should take a couple of days and index the thing, but that's not going to be today. Right now I have to find something again every time I want it. That's the section of code @timcliff was working on, though; maybe he can help.
The basic theory of it is that the total value of SBD is capped at 10% of the value of the whole Steem ecosystem, and when that would lead to SBD being worth more than $1 US the whole thing changes.
Ah that makes sense. The funny thing is I was thinking about a timcliff post from a while back when I said that the blockchain always assumes SBD is $1 LOL
Well I guess it is time to look into this now :( what with Steem at $.47 and all
There's an interesting race going on between those of us who are converting and the feed price. Even with Steem at .43 as I write this it's not inevitable that the peg will break. SBD supply keeps dropping. The magic number is down to .45 and falling.
Thanks for the advice! I think I will give this a try, since I hardly take out my steem anyway!
very good point. I had not even thought about that in quite a while
Yeah I am pretty sure the vast majority of users just internalized that it was better to do 50/50 split and haven't even thought twice about it as SBD fell below $1. I thought it was a good time to post about it.
Think we need the Convert option back for SBD instead. I think it is still in the API, and there might have been good reasons to remove it back from thw steemit.com wallet page then, but now getting payout partially in SBD to then have 'converted' to STEEM by the blockchain should be an important option to have back. Should help making the old downward peg working again. I saw there is a lightsteem example in the docs of lightsteem:
So you can always do it in a little python script using lightsteem by @emrebeyler.
Getting it back for web users though should still be important though.
I don't see any reason why 100% PU would turn out better than going 50%/50% and using Convert, and you will be helping pegging by using this option I think.
thanks for pointing this out and @tcpolymath noted that Steemworld also has a gui for it. Think this through with me though - isn't this in practice the exact same thing as selecting 100% power up, only it takes more steps and an additional 3 days after you receive post payout? What is the benefit? I don't see any big drawbacks, but having to take extra steps to achieve the exact same result is a slight reason to use 100% power up instead of conversion. I have seen some people saying that the conversion is preferable because it takes SBD out of circulation... but isn't selecting 100% power up taking the exact same amount of SBD out of circulation (or rather, causing the exact same amount of SBD to never be circulated in the first place, which is the exact same difference?)? Am I missing something?
EDIT - I guess it isn't necessarily the exact same amount - for a 100% power up post, the exact amount of Steem would be based on the 3 day rolling price average from the feed for the 3 days immediately before the post paid out, while if you use the conversion feature the exact amount of Steem would be based on the 3 day rolling price average from the feed for the 3 days immediately after making the conversion request.
EDIT 2: Thinking about this some more, I think the prime advantage of using the conversion feature is that you only have to predict the market for 3 days instead of 7 days. With how swingy crypto markets can be and generally unpredictable, with price movements based almost entirely on market manipulation and news stories, this may not actually make much difference in practice LOL But yeah I think it probably gives you a little better control I guess?
Steemworld has a gui to do it.
Just noticed this post by @emrebeyler, should be relevant.
I seem to remember SBD spending a fair amount of time under 1$ just over a year ago, but since then you would have been doing it wrong without going 50/50. A good day to re-introduce (but a shitty day for crypto!).
Yeah when life hands you a bloodbath, turn it into lemonade! mmmm
perfect :)
It's all in the timing.
I dont trust you Carl! Crying into a pillow right now.
:D
There there pats you gently and reassuringly and not at all creepily on the head LOL
Thanks for this - I kinda forgot about it, and I can forget WHY I would have done it, but you explain it all so nicely that it's a timely reminder. Posting this in my Discord channel for hte benefit of my homies. x
Thanks! Yeah I hope the market reverse soon but if it doesn't this message needs to get out there! Cheers
which option did you choose for this post ? 50/50 or 100% ?
I unfortunately am in the position where I have to liquidate some of my Steem posting earnings weekly to cover living expenses and I don't want to have an ongoing power down (because I have delegated most of my SP out to projects I like and support) so I did choose the 50/50 split LOL
If you are in a position where you are just trying to build up an account and are powering up all earnings anyway, then the 100% power up option is the best choice as long as SBD is under $1
Very good articulation on the reason why 100% power up is good under such market conditions!
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