Why Has the Value of Your Steem Upvote Risen 60% in a Week?

Have you noticed how much your upvote is currently worth?

Calculating an upvote in terms of STEEM per SP, at the moment, an upvote is worth some 60% more than just a week ago! Sure, the Dollar price of STEEM has been dropping at the same time, but only about 20%.

Look at the graph below. This shows data starting in mid-July and shows the annualised, non-compunded, value of a full quota of daily upvotes at 100% Power. The top (blue) line has been stable during this period at about 20-22% APR. The lower (red) line is the author rewards after deducting curation rewards. Although not obvious, the curation rewards have been stable at exactly 25% since the SBD printing rate fell to zero.

Notice, however, the sudden steep rise since HF20 in both the values of upvotes and author rewards.

So what's going on? Quite a few changes have happened because of HF20, so we need to look carefully at the effect of each factor. The curation rewards that previously went to the author are now returned to the reward pool, thereby potentially increasing the pool; the SBD print rate is back to 100%; and there was a loss of about 5 days of activity on Steemit and the Steem blockchain.

To put this into further context, during the last 3 months, the reward_pool has been fairly stable at about 700-740k STEEM; today it is over 950k... and rising!

The author_curate_rewards going back to the reward pool will have some effect. I haven't investigated this in detail, but suspect those who used this to give themselves extra rewards will have changed their voting habits. What I am seeing is some users forgetting to change their autovotes, or just confused by the process. I estimate maybe 10% is being lost to curators and ploughed back into the reward pool. This is 10% of 25%, so a mere 2.5% of rewards. Even if this is a low estimate, it would not account for the meteoric rise in the reward_pool.

Having the SBD print rate back to 100% could potentially make a significant difference to the distribution of rewards. However, the price of SBD is hovering just below US$1 and is therefore having little effect on reward payouts.

The US$ price of STEEM will also affect reward payouts. With STEEM currently at about 80 cents, this is currently increasing the payouts in terms of STEEM per voted SP. However, this value has no effect on the size of an upvote in STEEM terms (although it does in US$ terms), which is calculated purely from the available reward_pool and the recent_claims and then multiplied by the Dollar price.

So we are left with one major effect on the rise in the value of an upvote: activity.

Most of us (probably all of us) had to wait at least 5 days before our Voting Power (or Mana) returned to pre-HF20 values. Some people started upvoting earlier than others, but overall the whole ecosystem suffered 5 days of slowdown. We have still not gone past the 7 days after returning to full Power; this will happen within the next couple of days. Then we will see whether the reward_pool continues to rise or whether it will max out and start to fall again.

Of course, it may be possible that some earning strategies are no longer viable and that those accounts using them are powering down and leaving. Possibly. This also opens up the discussion as to whether all activity is good activity, at least as far as the STEEM price is concerned.

We shall have a clearer picture over the next 7 to 10 days.

For now, if you are posting and voting and earning, welcome to HF20!

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Please Comment, Resteem and Upvote. Thanks!

@rycharde manages the AAKOM project and the MAP Trail.