Let me see if I get this straight.
Upvotes generate "claims" against the reward pool.
What's in the reward pool (and will thus be transferred to the upvoted posts and comments) is a mix of steem and SBD.
How is the composition of this mix calculated ?
I imagine the "smart contract" you mention looks first at the price feeds provided by the witnesses and averages them (all the active witnesses ? simple average of the ~140 price feeds of active witnesses ? or weighted average ?)
Now imagine the average price feed is 0.94 SBD to 1 STEEM
The total supply of SBD is 15 685 205. Circulating supply of STEEM is 274 725 189 and total supply is 291 699 283 (according to CoinmarketCap).
The smart contract calculates (15685205 * 0.94) / the supply of steem. If it uses "circulating supply", the ratio is 5.3%. If it uses total supply, the ratio is 5.05% (both cases it's above 5%, but which one is used?)
Therefore, it creates no SBD and only STEEM goes into the reward pool.
Is that correct ?
I'm not sure how the "bias" is used - given the fact that most witnesses have no "bias" set and those that have a bias set range from -0.2% for @pharesim to +0.81% for @raggaemuffin (I ignored @chainsquad and the dead witnesses), I guess my witness, @lux-witness, is not the only one to be unsure about how the "bias" is used in the code ... could you maybe offer a hint ?