Your STEEM Earnings are as Good now as they were in the Summer
Let me explain...
Forget about US Dollars for a moment. You are in the Steem ecosystem and your native currency is STEEM; its US$ value is meaningful when you need to exchange STEEM into, or out of, some fiat currency. But while you are in Steemland you are trading in STEEM. [1]
The prices of STEEM and SBD have been hovering around the US$1 mark for the past 3 months or so. The recent drop further down towards 50 cents for STEEM has spooked many Steemians, but what effect is it having on your earning power within Steemland?
STEEM author and curation rewards
The graph below shows data from the end of July 2018 to the present. The blue line is the earning power per active SP, assuming 10 upvotes per day at full power, annualised into an APR (non-compounded annual percentage rate). This is essentially the value of an upvote. The red line below it is the author-rewards for the same upvote; it thus subtracts the curation rewards per upvote.
One thing to bear in mind is that although curation rewards are fixed at 25% of the pending rewards, this does not translate into 25% of the actual post payout; it can be both higher and lower than 25%. When SBD was high, curation rewards as a percentage of payouts was squeezed because of the high value of SBD payouts. Curation rewards at the moment are about 25-27% of payouts because of the SBD price being below US$1.
But let's get back to the main thrust of this post. The large spike you see took place around the time of HF20. Many users were unable to interact, this increased the reward pool so that those upvotes that did take place were worth more. It then took about 3 weeks for the upvote values to come back to their pre-HF20 equilibrium.
Let me pull out some numbers. The value of an upvote is equivalent to about 22% APR, based on STEEM earnings per SP. The author rewards are currently yielding about 16% APR. All of this on a Steem blockchain that has an inflation rate of about 8.5%.
How can you earn 22% (or even 16%) in an ecosystem that is growing at just 8.5%? It means that not all the existing STEEM coins are vested and upvoting. If we ever reach the point of mass adoption and full activity, then the earnings percentage would approach close to the inflation rate. I publish these numbers every week in our MAP Rewarder distribution post to check on the health and profitability of the Steem blockchain.
Notice that there has been no drop off in rewards potential in the last 2 or 3 weeks. The profitability of STEEM depends both on blockchain activity and its external fiat value. The current low price should be a signal to increase activity, not decrease it.
Yes, it would feel great to see STEEM at US$10, but that feeling of abundance comes from the value of the STEEM you already hold! A high STEEM value, on its own, actually decreases your future percentage earnings.
The motto for Steem must surely be: earn low, withdraw high.
This is no different to those companies who buy up what appears to be cheap inventory from failing businesses in a downturn in order to see a profit later when the price rises again.
Why are pending rewards not priced in STEEM?
In closing, I think there is a deep psychological problem in seeing post pending rewards in "$", even if such dollars are actually SBDs. I thought this was odd when I first joined Steemit: why not publish the pending rewards in the native currency of STEEM?
Publishing pending rewards in STEEM would concentrate the mind on the Steem ecosystem rather than an external currency. It would also stop people being confused as to why their post rewards go up and down with no visible activity. You can always check the US$ value within your wallet - it is surely more important to monitor the value of your whole account rather than every single post.
In the current situation of falling prices, users would see that their pending rewards have changed very little, if at all, and may therefore worry less about STEEM's price instability, instead being pleasantly surprised at the stability of the Steem ecosystem.
What do you think?
Please resteem to inform more Steemians and improve understanding of the Steem ecosystem.
[1] Before anybody jumps on this, I am fully aware that when SBD is above US$1 and above STEEM that there is an increase in rewards, although this will also then erode the value of an upvote. However, a high Dollar value for STEEM, with SBD lower, will have the opposite effect, lowering the percentage rewards. This article really is aimed at the current scenario where both coins are about, or below, US$1.
images: logo by @rycharde; pixabay (edited); graph by @rycharde.
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- -Please Comment, Resteem and Upvote. Thanks!
@rycharde manages the AAKOM project and the MAP Trail.
I have to say that my English level is not the best in the first place. Responding to your publication, it is good to see that there are people giving their positive side in a place where everyone sees a bad moment now.
I have been here for 8 months and I still do not know many things in depth (influential factors such as Steem inflation, rewards, curation), and I consider what you mention important, which I really hope many of you will be able to read.
I agree when you say it's time to interact more. By the way, Steemit came to see the earnings in SBD/STEEM instead of the USD in his day, but for purposes of mass adoption was placed in the US currency.
Reestemed.
Thanks for your support.
I think every newbie is confused about the rewards structure and payout - actually, not just newbs - that working in the native blockchain currency makes more sense psychologically. Especially as the "$" is not even the current USD price but the 3.5-day median. There is thus both a disconnect and a lag. lmao
I wish it would be reflected in the moment, although in the same way, I suppose that they will have their reasons to see themselves with that delay, since indeed, the figure in USD is not what is really obtained.
Hi again, please be very careful with voting. I only noticed as am online, but it looks as if you voted on my comment but then wanted to increase the %. One cannot do that - the system cancels your original upvote and you end up using VP and the recipient gets nothing. To see what I mean, take a look at the steemd version of this article: https://steemd.com/steemit/@accelerator/your-steem-earnings-are-as-good-now-as-they-were-in-the-summer
For anybody who feels they have voted the wrong amount, just leave it alone and upvote something else, like a different post or comment.
I had no idea about that. I'm glad that in addition to learning about what you mentioned, something new also I just learned about the vote.
In Steemd I did not notice anything. Could you tell me what line you are referring to? I can see 0.01 $, or I do not understand at all.
Yeah, where you copied that image, scroll down past all the data for that comment and in the bottom right you'll see "vote details (3)", click that and it opens up all the voting details. Sadly you will see yours as zero even though voted at 33% :-(
Steemit should really warn users before they double-vote... but don't - it only warns you if accidentally double-clicked within 3 seconds.
In the 8 hours since posting this, STEEM has risen in an almost unbroken straight line from 57c to just over 61c. Maybe someone, somewhere has understood something ;-)
To listen to the audio version of this article click on the play image.
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Hi friend, great work in the community for steemians. A hug from Venezuela.
Cool, that's good news.
By the way, I am now delegating a whole whopping 100 SP :) Just changed that now. The extra Steem has been coming in real handy these days... *ahem Steem Monsters.
:-) Many thanks! Just processed it now.
You also get a nudge up in the value of the bonus upvotes!
Oooh, really? Is only for mapster related tags or for any post? And what's the extra nudge?
Mapster kinda stopped when chainBB closed down, so upvotes are max once per day on any post.
If you haven't read it, this is the latest guide: https://steemit.com/delegation/@accelerator/delegating-to-map-rewarder-benefits-for-small-sp-accounts
Cool, thanks. I'll check that out. One upvote per day seems reasonable. Very reasonable.
Thanks :-) always with the caveat of a min VP and no techie glitches!
I think you got an upvote in the last hour or so - just noticed as am online scanning transactions.
Cool! Awesome :) Thx.