SteemAX allows Steemians to invite each other to automatically exchange upvotes for an agreed upon duration.
Once created between two Steemians, an exchange will occur between the two most recent posts not older than 5 days, and that hasn't already been voted on by either party. An exchange can be made using 1% to 100% of your vote value at any ratio between 0.001:1 to 1000:1.
Please Also Read How To Use SteemAX to Invite Someone to an Auto-Exchange of Upvotes
SteemAX is a significantly better method of making a guaranteed profit
from your quality blog than any other known method on Steemit. I wrote this article to help explain why, and to help you get started using SteemAX so that you can maximize your profits and your Steemit experience, especially in the light of Hardfork 20.
- Why is SteemAX a Good Thing?
- Automation is a Natural Solution
- SteemAX Solves the Problem of Quality Control
- SteemAX Increases Profits in Two Crucial Ways
- An Example Strategy for Minnow Newcomers
- Why Not Just Use SteemAuto?
- What About That Other Vote-4-Vote App?
- SteemAX is Open Source
- Won't the Good Person Token Solve All of This Anyway?
- Dust Vote Thresholds and RC Credits
Why is SteemAX a Good Thing?
First, let's look at some of the dilemmas facing Steemit.
Although it's highly unethical in the eyes of many Steemians, one of the most profitable methods for making money on Steemit is to self-upvote. This is precisely what many have done and are still doing not only because the system allows it, but because it truly is a guaranteed ROI, rather than waiting and hoping that your post will be noticed.
Curation rewards were created as an incentive to vote on blog posts other than your own, but many newcomers to Steemit do not have enough Steem Power to make curation rewards profitable.
As of Hardfork 20 authors will no longer receive curation rewards when they self upvote. Instead, self-upvoting will now cause the curation rewards to be returned to the reward pool.
Speaking of getting noticed, the Steemit "feed" is purely chronological and those with too many followers are unlikely to see most of the content they're following. Compound that with Steemit's emphasis on "quality" posts and you have a very long list of very long articles that One simply does not have enough time in their day to read.
Automation is a Natural Solution
Whale investors realized that for their investment to grow, Steemit must grow, and so they are very concerned about supporting quality content. But just as it's difficult to follow more than 50 people on Steemit, it's absolutely impossible for a whale investor to monitor all of Steemit without the help of automation (bots).
Whales are often also Witnesses, and a Witness node's profit is derived by the number of transactions it's processing. This is also how the Steem crypto unit is created and added to the reward pool so it's not only in a whale-witness' interest to create as many transactions as possible for the sake of profit, but it's also a necessary function that drives the entire Steem economy. This is actually true about any economy as it's not just about the number of bills in circulation but also how quickly they are moving from hand to hand that determines it's "health" and rate of growth.
Thus Bid Bots Were Born
A "work-around" was created where Steemians could "bid" on a whale's upvote, thus ensuring a profit for the whale as well as ensuring a constant outpouring of rewards and blockchain transactions; which is good for the witnesses and the reward pool. This also helped newcomers to the platform find a way of getting their posts noticed in the Trending category, and thus be able to create a following through "paid promotion", so to speak.
I think the idea was a good one when Steemit was much smaller, as the developers of these bid bots were relying on the good nature and honesty of those who used them. They probably had the belief that should anyone abuse a bid bot it would be no problem to just flag them into oblivion. Unfortunately, as Steemit grew, this concept no longer works as bid bots have now become a major tool for spammers. The reason for this is obvious: no one is checking the quality of the posts being bid on, except maybe other bots. And with so many abusing bid bots this way it's nearly impossible to flag them all.
SteemAX Solves the Problem of Quality Control
Because SteemAX requires each exchange to be mutually agreed upon, someone entering into one is most likely going to ensure that the overall quality of the other account is beneficial to them in an exchange. This is opposite to a bid bot which is blind to quality and only ensures a particular post gets seen. For instance, if invited to an exchange it's wise to see if every post created by a particular author is of sufficient quality and earns enough for the exchange to be beneficial.
SteemAX Increases Profits In Two Crucial Ways
Most Steemians understand that they can upvote 10 times per day at 100% vote weight without depleting their vote power. Imagine you create 10 exchanges at 100% of your upvote value, and at a 1:1 ratio with 10 people who each post at least once per day. Now, by making a single post your upvote will be distributed to 10 people, and you in turn will receive 10 upvotes on your post at the same value as if you had managed to upvote yourself 10 times in a row. And that's just at a 1:1 ratio. SteemAX let's you create disproportional ratios, allowing even greater profits. Why would someone agree to a disproportional ratio? Keep reading.
What if you could self upvote and go for curation rewards simultaneously?
Instead of self upvoting, a Steemian can create exchanges at a 1:1 ratio that would get the full value of their upvote returned to them plus the curation rewards from upvoting other people's content. This is especially helpful after Hardfork 20 since self upvoting no longer grants a curation reward.
If a whale creates ratios that are disproportional, say 1.1:1 or even up to 10:1, then they might be losing out on the full return upvote value, but they stand a better chance at receiving a larger portion of the curation. For example, by entering into an exchange with a content creator that creates excellent, (potentially) high earning posts, then the curation will be much larger than the loss in returned vote value. A smart whale could use SteemAX to strategically target quality content creators thus increasing their curation rewards several fold. A bid bot, obviously, cannot target specific accounts and offers no long term support.
Additionally, a whale can "spread out" their vote to many people by creating exchanges using a low percentage of their vote vale. A 1% vote value multiplied by 10 posts/day equals a potential 1000 upvotes per day, keeping the witnesses happy with plenty of transactions. (Low vote values should not be a problem for accounts with sufficient Steem Power. See below for a further explanation of how the new dust vote thresholds in Hardfork 20 will affect exchanges.)
Let's do some math
The following example can be scaled to any size so I ask you just focus on the concepts and not so much the actual amounts.
Let's say you have an upvote value of $1.00
You want to maximize your profits using SteemAX. A good strategy would be to engage and interact with as many quality content creators as possible that post one or more times per day. You'll also want to check that their posts earn at least $4 to $5 each (or more). It would also be important to look at the voting history for their posts, or maybe just watch the account for a while to see how many other voters are vying for the curation rewards.
Let's say each post the author makes gets about $0.35 at the 15 minute mark after post creation. (As of Hardfork 20 the curation window has been receded from 30 minutes to 15, which is now the most ideal time to vote for the curation reward). We know that the curation reward is 25% of $5, which is $1.25. This gets divvied amongst the curators, so to beat everyone out you only need to upvote larger than the largest upvote. In other words, if 4 people already upvote at the 15 minute mark, and the largest of those is $0.15 (the others are $0.10 / $0.5 / $0.5), then you would do well upvoting $0.20 or more. The $1.25 will be divvied amongst the 5 curators, but not divided equally, giving you a portion larger than one fifth. So without doing too complicated of math, we already know the curation reward will be larger than $0.25 (because you upvoted larger than everyone else), which is already more then the $0.20 upvote used to get it.
So now let's also say the author of these posts only has an upvote value of $0.05. That's ok. If you create an exchange invite offering 20% of your upvote ($0.20) at a disproportional ratio of 4:1 ($0.20 vs. $0.05), although you are only receiving $0.05 in return, you're also receiving that curation reward of more than $0.25, a definite profit while at the same time providing significant support to another Steemian. And you did it by verifying the quality of all their posts, not just one.
Now imagine if that author created posts earning $20 per post and had an upvote value of $0.50. You could try 20% at a 1:1 ratio and do even better! Or you could be really nice and do 1.1:1!
An Example Strategy For Minnow Newcomers
A minnow newcomer can use SteemAX to create a following and start earning Steem in a much more natural way then by buying their way into the Trending category. As a matter of fact, SteemAX could be used to strategically launch an account and start earning Steem with almost nothing to start: they just need the time to create the exchanges. This time must be spent interacting with other Steemians in order to build the rapport necessary for them to accept an exchange invite, which is a much more organic method of creating loyal followers anyway.
Most who agree to exchange with newcomer minnows will be more likely to accept disproportional ratios since the values are already so small, such as $0.001 vs. $0.005. Those are very small values but for the minnow that's a 5-fold return, something not easily achieved by other methods. If a minnow creates enough exchanges at these ratios they will become a dolphin in no time.
It's also important to note that SteemAX uses the percentage and calculates the ratio at the time of the exchange, not at the time the exchange is created. This means that as an account accumulates more Steem Power and it's upvote value increases, so do the exchange values. For example, imagine there was an exchange agreed upon where the vote values were originally $0.001 vs. $0.005, and the left-hand (inviter) account increased Steem Power to a vote value of $0.002. Now, because the exchange would still be at the same ratio of 0.2:1, the new exchange will now be $0.002 vs. $0.010. This is truly excellent for the minnow as they will be accumulating Steem Power very quickly, and so their exchanges will also increase their profits over time.
This is why exchanges are designed to expire, and why picking the duration of the exchange should be proportional to the amount of growth in the exchange rate both parties can agree to.
Why Not Just Use SteemAuto?
Sure, you could just use SteemAuto to support another Steemian, but you would only get the curation reward. If a whale wanted to support just one minnow this might be a good strategy but if they're looking to support many minnows, then the return vote in the exchange adds up quickly.
Don't get me wrong, SteemAuto has many features SteemAX does not, such as curation trails and comment voting. Using SteemAuto may also be a good idea if you don't post very often but want your account to automatically upvote posts; SteemAX only makes exchanges based on the frequency of posting.
What About That Other Vote-4-Vote App "The Steem Vote Club"?
First of all, they do not use Steem Connect to log in, so you are trusting this service with your private posting key, which is NOT a good idea.
Second, this service does not allow you to adjust the percentage and ratio of the exchange, two crucial features for maximizing your profits.
According to Steem Vote Club:
After every 10 full votes (i.e. if the votes you receive add up to ten 100% votes for you) we will take your posting key and give one vote to steem-bounty.
That sucks. SteemAX takes zeros fees and would never do this with your account, ever. SteemAX also does not store your posting key as it uses the official and very secure method of using temporary access tokens via Steem Connect.
SteemAX is Open Source
SteemAX is an open-source project that was incentivized by Utopian.io, a major Steem blockchain organization that rewards developers for their work after a careful review and analysis. In other words, many Steem developers have and can look at the source code for SteemAX to ensure it's fairness and security.
Won't The Good Person Token Solve All of This Anyway?
The Good Person Token (GPT) is a Smart Media Token (SMT) that has been released for use with Hardfork 20. Along with this is an A.I. driven algorithm called "User Authority" (UA) that determines if you are a "good person" or not. If you have a high UA score you can earn the GPT alongside Steem, potentially earning bigger rewards for being a real person instead of a spam bot.
Also, the GPT is 1 vote = 1 token, no matter who you are.
Steemit Inc as well as many others firmly believe this is the solution to bad actors, sock puppet accounts and spammers. They also believe that this will help newcomers earn more, giving a bigger incentive to stay on Steemit.
However, there are others who feel the GPT is the wrong solution, and for a number of reasons:
- User Authority will be a centrally controlled whitelist owned by Steemit Inc, and for many this smacks of censorship, the very thing a decentralized blockchain is not supposed to have.
- Also, it's not very clear the exact rules UA will be using to determine if someone is "good" or not, and many feel there could be too many false positive identifications.
- Furthermore, there's the basic economic question of what will drive the exchange price of the GPT, or even how it will be exchanged.
Regardless of it's flaws and what anyone might think of the GPT, all the things you love about Steem will still remain the same.
Dust Vote Thresholds and RC Credits
Now that Hardfork 20 is here, there are some new rules regarding how low of a vote value can be cast. There are also some new rules about how much activity a user can perform on the blockchain. Although this will impact all Steemit users, it will not affect exchanges any more than if you had done the voting yourself. This will primarily effect accounts with very little Steem Power that attempt to vote too often (vote spamming).
When it comes to using SteemAX as a minnow, just be sure to make exchanges that use 90% to 100% of your vote value and this will unlikely affect you.
Whales using SteemAX need to be aware of their threshold as far as entering exchanges from 1% to 10% of their vote value. If you can cast a vote this low manually and it still impacts rewards then you can do it on SteemAX. It's that simple.
All images created by the author using royalty free images