Into The Heart of Sustainability: Fractions of a Fraction

in sustainability •  4 months ago 

Fractions of a Fraction

Last week in Into the Heart of Sustainability we defined Sustainability and began introducing the concepts that explain its relationship to Steem Basic Income.

Today we are going to focus on measuring sustainability. What metrics we use, and how we use them, to determine when we have what it takes to last forever, and when we need to make adjustments. Today’s episode will rely heavily on math, and we encourage you to both follow along and to ask any questions in the comment section below.

sustainableLOGOedited.jpg
Logo design by @ecoinstante


Do You Know what Steem Basic Income is?

Steem Basic Income is a social experiment to bring a basic income to as many Steemians as possible. Members join by sponsoring others into the program. Steem Basic Income is delivered through providing regular upvotes to member content.

Check out our Frequently Asked Questions!


Base SP

The ‘native’ Steem Power of the Steem Basic Income accounts accumulates over time. It is important that this number grow at a similar rate to the enrollments growth of the program. This number, and its relationship to total SP of the program, is also useful in calculating other important metrics. It is where we start our calculations.

Base SP.png
If it is not our SP, it has a cost.

We include in Base SP all the native SP in the Steem Basic Income accounts, as well as the SP from member delegations. Member delegations do have a price, but is paid in upvotes - not in liquid STEEM. In a future article we will break down the math behind member delegations even further; for now please note that they are included here.

Weekly costs

The leasing of Steem Power to fulfil our mandate is a very important part of what we do. We primarily use the Minnow Booster market to pay for 24 week leases.

weekly costs explained.png

While individual lease prices can vary, we calculate our total weekly costs with the following formula:

Leased SP / Price = Weekly Cost

‘Price’ here is the inverted metric used by Minnow Booster, and not the normal way we think of prices. Roughly speaking, it indicates the total SP that each 1 STEEM could lease at the same price if it was all combined into one week instead of 24. It’s a weird pricing schema. Suffice it to say that a higher 'price' actually means a lower cost. This smoothed weekly cost metric represents the cost for us to replace 1/24th of our leased delegations (which last 24 weeks).

Author rewards and Curation

Total author rewards and curation combined sum to 82.28% of our weekly costs, as seen below. Some programs might stop here, but this is not the whole story, because it does not take into account the 'Base SP'.

weekly cost division.png
Here, 100% describes only the Weekly Costs

As you can see, curation and author rewards do not currently cover the full cost of the program. We have been using SBD conversion to bridge the gap, but that opportunity may be coming to an end.

Putting it all together - with Conversions

When we combine our Base SP into the equation, we can see the current totals (as of February 25th, 2019).

combined1.png
Sustainability Metric, without conversions is 86.31%

As a reminder, we currently use market arbitrage to make up the difference, buying SBD at prices below a dollar and converting them to one dollar worth of STEEM. We stagger our conversions to lower the risk associated with price swings during the 3.5 day conversion period. This produces an additional income stream, which in the week ending February 25th, 2019 represented 22.19% of weekly costs. When multiplied by our 77.23% it yields 17.13% of the total ‘cost of upvote delivery’.

This is enough to make up the difference and keep us above 100%, the realm of sustainability. But SBD is getting close to $1 again and conversions likely won't last much longer.

Sustainability Coverage

In order to maintain the program’s sustainability, never risking the future of the program for today's payouts, we are introducing ‘Sustainability Coverage’ as a key metric. Measured by the metrics just explained, our current Sustainability Coverage is the total of 86.31% + 17.13% = 103.44%.

If at any point our Sustainability Coverage drops below 100%, we will apply it as a multiplier to the existing member rshares accumulation rates. That will reduce upvote values for all members at exactly the level that remains sustainable.

To provide an example, without conversions our current Sustainability Coverage would be 86.31%, or 0.8631. We multiply the current rshares accumulation of 800M rshares per unit per day by this number, which yields 690.48M rshares per unit per day. Instead of member rshares balances growing by 800M per unit per day, they would grow by 690.48M per unit per day, or 86.14% of our target rate.

Whenever Sustainability Coverage is above 100%, then member rshares balances will grow at 800M per unit per day. This change will guarantees that under no circumstances will we ever become (or be reasonably interpreted to become) a ponzi scheme.


Our goal with introducing Sustainability Coverage is to make the program stay stronger and last longer, which will benefit everyone involved. Rest assured that we will use all of the tools at our disposal to keep Sustainability Coverage above 100% as much as possible.


If you are interested in helping Steem Basic Income to stay above 100%, consider our delegation and/or upvoting programs.

Writer Bio

This Sustainability report was prepared for us by @ecoinstant.

From a young age, @ecoinstant continues to be very interested in the mechanisms of sustainability, and loves being a part of several teams working on promising projects, including the marvelous Steem Basic Income!

Questions?

Please read our FAQ. If you still have questions, ask in the comments section or join us in our discord channel.

You can look up your current membership levels by using !sbi status in a comment or post, or by using our newly modified member lookup tool.

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
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How does upvoting help sustainability when you're returning greater value than the upvote was? Is it because the program is better than average at getting curation rewards?

Posted using Partiko Android

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It is indeed because of that. 37.5% coverage from curation implies that we are able to recover 37.5% of our voting value in curation rewards. Since only 25% of vote values goes into curation, that means we are 'outperfoming' by 50%.

1.34x voting rewards may still be too high. We temporarily decreased it on comments already (to 1.15x) to help VP recover. Sustainability Coverage just dipped below 100% today, although I will double-check all the data before making any changes to member rshares growth rates). This also means we will actively power up instead of leasing delegations until Sustainability Coverage rises above 100% again. If that results in another decrease in VP below 15%, we will further cut voting rewards to 1.25x on regular updates and 1.10x on comments until VP recovers.

It's all a fine balance and we have a lot of levers we can pull now, though the impending loss of conversion income means we are not in quite as strong a VP position as we would like to be when shifting to power-up instead of delegation.

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What's really great is that you are essentially doing all the hard work of making the most "profitable" decisions for the whole group. It also makes me feel better that I stopped doing the SBD conversions myself, because it means there was a teensy bit more time that SBI could profit by it.

Posted using Partiko Android

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I don't know that any individual level of conversions has a big impact on the total time that they are available, but maybe a little impact. SBD is still below $1, the profit failure of recent conversions has been because of a pop in STEEM price (we calculate everything using STEEM as our base currency, so a pop in STEEM price results in an unprofitable conversion, even though it would have been profitable still if we used USD as the base currency for calculations).

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Me encanta poder vivir sin tener que hacer un trabajo que no me gusta: ¡gracias por difundir un mundo nuevo!

!sbi status

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Hi @pedronel!

  • you have 1 units and 0 bonus units
  • your rshares balance is 118462138560 or 0.064 $
  • as you did not write a post within the last 7 days, your comments will be upvoted.
  • you need to wait until your upvote value (current value: 0.003 $) is above 0.025 $


    Did you know Steem Basic Income has a Quality Policy?
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I was wondering the same thing. Maybe it’s just a cheaper way to get steem and sp than delegating?

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Cheaper in the long-run, but it does have a short term 'cost' in that we need more voting power up front.

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Can you maybe make a post about it? Maybe dumb it down so I understand 🤯🤔

Posted using Partiko iOS

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We can cover those trade-offs in a future post in this series if @ecoinstant is up to the challenge. If not we can cover it separately.

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It was between this and the break down in delegations. Those are looking to be the next two. We can start with voting!

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Agreed. Good call to tackle the more complicated one first!

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I'll be interested in seeing the answer to this, as well.

I'm gonna guess it has something to do with timing as you suggest, but also that curation rewards become part of "owned" SP, and hence that's SP that doesn't have to be leased, which is an expense. It's tiny fractions of a cent, but multiplied by thousands it adds up.

=^..^=

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That's the basic idea. The question is whether it's cheaper to lease the additional voting power needed every time, or cheaper to lease a little extra up front to provide upvoting rewards. With our 'above average' curation rewards the extra expense up front is covered.

Realistically we should make upvoting rewards a parameter too (set at author rewards + curation rewards, but using our curation % instead of assumed 25%). In this case that would be 75% + 37.5% = 112.5% as a sustainable upvoting reward multiplier. This is something I will investigate further.

Making the different reward aspect paramaters that we can manage based on the performance of different areas is easier for us to maintain sustainability, but more complicated to explain to members.

Instead of 'the reward is always this' in the FAQ, it would be 'the reward is based on this complicated formula and constantly changes'. It's better to overpay a little and build a reliable base of upvoting members than to overmanage.

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I love you, guys! <3

!sbi status

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Hi @scilwa!

  • you have 150 units and 0 bonus units
  • your rshares balance is 1751830130795 or 0.949 $
  • as you did not write a post within the last 7 days, your comments will be upvoted.
  • your next SBI upvote is predicted to be 0.038 $


    Did you know Steem Basic Income has a Quality Policy?

Thanks for the explanation, has the native SP percentage grown over time? Do you foresee a day when it will be 100% native power? Thanks!

Posted using Partiko Android

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We don't expect to ever hit 100% native power. Read last weeks post on this and you will see why (enrollments would basically have to stop for that to happen).

Native SP percentage has decreased over time, as its growth has not kept pace with enrollment growth. The potential issues around that are part of what motivated us to get this series going when we did.

!sbi status

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Hi @r2cornell!

  • you have 1111 units and 850 bonus units
  • your rshares balance is 43694596080247 or 23.678 $
  • your next SBI upvote is predicted to be 4.736 $


    Did you know Steem Basic Income has a Quality Policy?
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You received an automatic vote, because I believe in you and I love what you create! ;)

A huge hug from @amico! 🤗


@oneoageX !sbi status

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Hi @amico!

  • you have 113 units and 508 bonus units
  • your rshares balance is 2481334235507 or 1.339 $
  • your next SBI upvote is predicted to be 0.268 $


    Did you know Steem Basic Income has a Quality Policy?

!sbi status

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Hi @mastergerund!

  • you have 84 units and 0 bonus units
  • your rshares balance is 1788302617384 or 0.968 $
  • your next SBI upvote is predicted to be 0.194 $


    Did you know Steem Basic Income has a Quality Policy?
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!sbi status

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Hi @mastergerund!

  • you have 94 units and 1 bonus units
  • your rshares balance is 1304169952272 or 0.920 $
  • as you did not wrote a post within the last 7 days, your comments will be upvoted.
  • your next SBI upvote is predicted to be 0.037 $

Structure of your total SBI vote value:

  • 87.58 % has come from your subscription level
  • 0.23 % has come from your bonus units
  • 16.93 % has come from upvoting rewards
  • 0.00 % has come from new account bonus or extra value from pre-automation rewards


    A pending upvote balance is tracked for you in our database. Each time you post, your balance is drawn down by up to 20%. If you post again before that amount is replenished, your next upvote will be smaller. Our minimum upvote for posts is $0.012. Your balance accumulates until a minimum upvote can be delivered with 20% of your pending balance.
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!sbi status

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Hi @mastergerund!

  • you have 94 units and 1 bonus units
  • your rshares balance is 1285437178356 or 0.938 $
  • as you did not wrote a post within the last 7 days, your comments will be upvoted.
  • your next SBI upvote is predicted to be 0.038 $

Structure of your total SBI vote value:

  • 87.65 % has come from your subscription level
  • 0.24 % has come from your bonus units
  • 16.84 % has come from upvoting rewards
  • 0.00 % has come from new account bonus or extra value from pre-automation rewards


    A pending upvote balance is tracked for you in our database. Each time you post, your balance is drawn down by up to 20%. If you post again before that amount is replenished, your next upvote will be smaller. Our minimum upvote for posts is $0.012. Your balance accumulates until a minimum upvote can be delivered with 20% of your pending balance.
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!sbi mastergerund

I continue to appreciate the transparency in the process and now having the understanding of what drives the sustainability of the initiative! This is a great way to continue to attract users into the community and add value to the ecosystem. Thanks for sharing!

Posted using Partiko iOS

Thankyou, that was a really good explanation of how SBI remains sustainable.

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You're welcome! @ecoinstant has been working with us for several weeks to make sure everything is covered properly (and in manageable sized pieces).

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Me encanta poder vivir sin tener que hacer un trabajo que no me gusta: ¡gracias por difundir un mundo nuevo!

!sbi status

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Hi @pedronel!

  • you have 1 units and 0 bonus units
  • your rshares balance is 118462138560 or 0.064 $
  • as you did not write a post within the last 7 days, your comments will be upvoted.
  • you need to wait until your upvote value (current value: 0.003 $) is above 0.025 $


    Did you know Steem Basic Income has a Quality Policy?
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Thank you! Thank makes the work learning how it works worth it :)

I am honored to have been invited and sponsored by @jongolson I will do my part to help in every way I can. Donate Streem or SBD, upvotes whatever it takes to make sure this project not survives but thrives!

Everyone wins here and all that are a part of the community should also feel so supportive of it!

Thank you to the developers that have labored to put it all together!

Together let's build something truly marvelous!

Posted using Partiko Android

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We recommend reading the FAQ (if you haven't already). The SBI banner at the bottom of each of our posts links to it.

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Me encanta poder vivir sin tener que hacer un trabajo que no me gusta: ¡gracias por difundir un mundo nuevo!

!sbi status

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We appreciate your support...

however, there is no need to spam the same response on a regular basis.

Continuing to do so will result in your account being blacklisted from receiving upvotes from Steem Basic Income.

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OK, gracias a ustedes: experimento terminado! ;)

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Hi @pedronel!

  • you have 1 units and 0 bonus units
  • your rshares balance is 119262138560 or 0.066 $
  • as you did not write a post within the last 7 days, your comments will be upvoted.
  • you need to wait until your upvote value (current value: 0.003 $) is above 0.025 $


    Did you know Steem Basic Income has a Quality Policy?
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If you need any help regarding sbi , you can contact me I will be happy to help you.
Also I run sbi contests regularly , check my posts to participate in them.

Posted using Partiko Android

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Thank you! That would be awesome if we could schedule a time where I could pick your brain for a few minutes. I would love to get a full understanding so I am doing my part in the community.

Everyone I have been talking with so far are amazing and very helpful. This is way different than the normal people you find on social media.

Please let me know a good time to get together and where you would like to meet. Talk soon!😀

Posted using Partiko Android

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You can contact me on discord.
I will send you the id soon.

Posted using Partiko Android

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Great thank you!

Posted using Partiko Android

Cool to see the "nuts and bolts" of how SBI works.... I'm glad you have a sustainable model, because this is one of my favorite initiatives here!

=^..^=

!sbi status

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Hi @curatorcat!

  • you have 44 units and 0 bonus units
  • your rshares balance is 445826371720 or 0.241 $
  • your next SBI upvote is predicted to be 0.048 $


    Did you know Steem Basic Income has a Quality Policy?

Sustainability is key right now no more more us better. Great you guys are thinking about this!

Posted using Partiko Android

Congratulations @steembasicincome! You have completed the following achievement on the Steem blockchain and have been rewarded with new badge(s) :

You made more than 1500 comments. Your next target is to reach 2000 comments.

Click here to view your Board
If you no longer want to receive notifications, reply to this comment with the word STOP

To support your work, I also upvoted your post!

Do not miss the last post from @steemitboard:

Carnival Challenge - Collect badge and win 5 STEEM
Vote for @Steemitboard as a witness and get one more award and increased upvotes!

Nice explanation. Thanks!

Posted using Partiko Android

!sbi status

Posted using Partiko iOS

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Hi @mcoinz79!

  • you have 44 units and 151 bonus units
  • your rshares balance is 1836390142754 or 0.982 $
  • your next SBI upvote is predicted to be 0.196 $


    Did you know Steem Basic Income has a Quality Policy?
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You received an automatic vote, because I believe in you and I love what you create! ;)

A huge hug from @amico! 🤗


@oneoageX !sbi status

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Hi @amico!

  • you have 113 units and 508 bonus units
  • your rshares balance is 2282614235507 or 1.220 $
  • your next SBI upvote is predicted to be 0.244 $


    Did you know Steem Basic Income has a Quality Policy?

!sbi status

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Hi @nyarlathotep!

  • you have 8 units and 151 bonus units
  • your rshares balance is 1623765031814 or 0.874 $
  • your next SBI upvote is predicted to be 0.175 $


    Did you know Steem Basic Income has a Quality Policy?

!sbi status

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Hi @eklmv!

  • you have 22 units and 30 bonus units
  • your rshares balance is 1121762915617 or 0.606 $
  • as you did not write a post within the last 7 days, your comments will be upvoted.
  • you need to wait until your upvote value (current value: 0.024 $) is above 0.025 $


    Did you know Steem Basic Income has a Quality Policy?

!sbi status

Posted using Partiko iOS

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Hi @mcoinz79!

  • you have 44 units and 151 bonus units
  • your rshares balance is 1167140434274 or 0.648 $
  • your next SBI upvote is predicted to be 0.130 $


    Did you know Steem Basic Income has a Quality Policy?

!sbi status

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Hi @joelsegovia!

  • you have 58 units and 55 bonus units
  • your rshares balance is 726988553129 or 0.525 $
  • your next SBI upvote is predicted to be 0.105 $

Structure of your total SBI vote value:

  • 47.40 % has come from your subscription level
  • 18.65 % has come from your bonus units
  • 7.50 % has come from upvoting rewards
  • 26.45 % has come from new account bonus or extra value from pre-automation rewards


    A pending upvote balance is tracked for you in our database. Each time you post, your balance is drawn down by up to 20%. If you post again before that amount is replenished, your next upvote will be smaller. Our minimum upvote for posts is $0.012. Your balance accumulates until a minimum upvote can be delivered with 20% of your pending balance.

!sbi status

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Hi @louis88!

  • you have 49 units and 50 bonus units
  • your rshares balance is 970010864195 or 0.524 $
  • your next SBI upvote is predicted to be 0.105 $


    Did you know Steem Basic Income has a Quality Policy?

!sbi status Thank you

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Hi @duckmast3r!

  • you have 34 units and 400 bonus units
  • your rshares balance is 767047952745 or 0.418 $
  • your next SBI upvote is predicted to be 0.084 $


    Did you know Steem Basic Income has a Quality Policy?

!sbi status

Posted using Partiko iOS

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Hi @cst90!

  • you have 6 units and 0 bonus units
  • your rshares balance is 166297134176 or 0.089 $
  • your next SBI upvote is predicted to be 0.018 $


    Did you know Steem Basic Income has a Quality Policy?

!sbi status

Posted using Partiko iOS

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Hi @mcoinz79!

  • you have 44 units and 151 bonus units
  • your rshares balance is 1979827561433 or 1.070 $
  • your next SBI upvote is predicted to be 0.214 $


    Did you know Steem Basic Income has a Quality Policy?

Hi @steembasicincome!

Your post was upvoted by @steem-ua, new Steem dApp, using UserAuthority for algorithmic post curation!
Your UA account score is currently 5.745 which ranks you at #434 across all Steem accounts.
Your rank has not changed in the last three days.

In our last Algorithmic Curation Round, consisting of 202 contributions, your post is ranked at #38.

Evaluation of your UA score:
  • You've built up a nice network.
  • The readers appreciate your great work!
  • Good user engagement!

Feel free to join our @steem-ua Discord server

!sbi status

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Hi @amberyooper!

  • you have 158 units and 0 bonus units
  • your rshares balance is 1312879482955 or 0.702 $
  • your next SBI upvote is predicted to be 0.140 $


    Did you know Steem Basic Income has a Quality Policy?
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Thanks for your efforts and your creativity, guys!

🐶 HARF HARF! 🐾 !sbi status

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Hi @holydog!

  • you have 18 units and 0 bonus units
  • your rshares balance is 667522284260 or 0.357 $
  • as you did not write a post within the last 7 days, your comments will be upvoted.
  • you need to wait until your upvote value (current value: 0.014 $) is above 0.024 $


    Did you know Steem Basic Income has a Quality Policy?

!sbi status

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Hi @harryp3!

  • you have 9 units and 0 bonus units
  • your rshares balance is 113075398284 or 0.061 $
  • you need to wait until your upvote value (current value: 0.012 $) is above 0.012 $


    Did you know Steem Basic Income has a Quality Policy?

!sbi status

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Hi @guifaquetti!

  • you have 231 units and 40 bonus units
  • your rshares balance is 758560846044 or 0.416 $
  • your next SBI upvote is predicted to be 0.083 $


    Did you know Steem Basic Income has a Quality Policy?

Congratulations @steembasicincome!
Your post was mentioned in the Steem Hit Parade in the following categories:

  • Upvotes - Ranked 10 with 1250 upvotes
  • Comments - Ranked 10 with 60 comments

!sbi status....

@onepagex

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Hi @brickmanbrad!

  • you have 26 units and 0 bonus units
  • your rshares balance is 388386451899 or 0.214 $
  • your next SBI upvote is predicted to be 0.043 $


    Did you know Steem Basic Income has a Quality Policy?
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This post has received a free upvote by @OnePageX
OnePageX.com is the fastest way to convert STEEM and other assets to over 140 cryptocurrencies!

Great Rates, Low Fees & Fast Exchanges!

Giving my share of support for today's post.

!sbi status

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Hi @nuthman!

  • you have 51 units and 0 bonus units
  • your rshares balance is 7331944443809 or 3.999 $
  • your next SBI upvote is predicted to be 0.800 $


    Did you know Steem Basic Income has a Quality Policy?