You are viewing a single comment's thread from:

RE: Where Does the Money Come From? - Ambassador Toolkit Item

in #steemit • 8 years ago (edited)

There does seem to be some confusion though... myself included. That 90% (roughly) interest that is earned on SP per year... is that earned no matter what or is the "interest" earned actually by voting throughout the year and can be as much as 90% (or more). The white pages weren't entirely clear to me and some others on that topic...

8 years ago in #steemit by
$0.00
    Reply 3
    Sort:  
  • Trending
    • [-]
     8 years ago 

    That's a great point and I had to do a bit of digging...and I might be off on my interpretation here. From the white paper:

    The majority of inflation is actually an accounting artifact rather than true reallocation of
    wealth. 90% of non-SMD inflation is distributed back to existing holders of STEEM proportional to the STEEM value of their SP balance, making inflation more of a “split”. Only about 10% of non-SMD inflation redistributes ownership in the network.

    My understanding is that the interest earned on SP occurs even with zero site activity (like posting or voting.) It's a mechanism to basically offset the inflation caused by new Steem created each day, so those who have Steem locked into Steem Power for the 2 years don't lose value on it.

    Because 90% of all STEEM created is distributed back to holders of SP, the result is similar to
    having a 2:1 “split” every year rather true inflation.

    I view this as a way for holders of SP to maintain it's overall value while the new Steem is created....essentially providing more Steem/Shares to offset the slightly lower Steem price due to the daily created money.

    I've not run numbers myself on if this merely maintains current value of holdings versus increasing the value.

    $0.00
      Reply
      [-]
       8 years ago 

      I went back and read the white paper in its entirety... and I think you are exactly right. The 90% is independent of any activity on the site... so really with the 90% and curation rewards, one can earn quite a bit of "interest" on SP over the course of a year...

      $0.00
        Reply
        [-]
         8 years ago 

        Glad that's how you read it too! This way i don't have to edit, lol.

        $0.00
          Reply

          Coin Marketplace

          STEEM 0.16
          TRX 0.15
          JST 0.028
          BTC 55994.69
          ETH 2375.77
          USDT 1.00
          SBD 2.31