Voting Values and the Upvoting Rewards Multiplier
You may have heard the phrase ‘Member Upvotes Provide Sustainability’ from us, and so today I would like to break that down. We will take a look inside the Upvoting Rewards Multiplier, and get to the bottom of, ‘if we give more than we take in, how can it be sustainable?’.
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.
Upvoting Rewards Multiplier
Our voting multiplier is an adjustable tool that we have, and it describes the amount that we will increase any votes received and payout with our own upvotes. So far, we have used a multiplier of 1.34x the upvote value to calculate the return value to the voter. This will not always be the case, but I will show you the math behind why this number is greater than one.
Example: A $1 vote
In this hypothetical example, we are going to imagine that someone gives us an upvote of 1 dollar. Now, I will go into currency conversion in a later episode, but I hope it is enough to say that for this example, we are going to use ‘dollar’ as a unit of value, and base our calculations on this ‘dollar’. Internally, all of the math is done with rshares.
| 1.34x | 1.25x | 1.10x |
|---|---|---|
| When we receive a $1 vote, we do not get all of it in our payout, but curation rewards are paid to the voter and others totaling up to 25%. This leaves us with only $0.75 in author rewards. We then return a vote valued at $1.34, based on the 1.34x multiplier. | When we receive a $1 vote, we do not get all of it in our payout, but curation rewards are paid to the voter and others totaling up to 25%. This leaves us with only $0.75 in author rewards. We then return a vote valued at $1.25, based on the 1.25x multiplier. | When we receive a $1 vote, we do not get all of it in our payout, but curation rewards are paid to the voter and others totaling up to 25%. This leaves us with only $0.75 in author rewards. We then return a vote valued at $1.10, based on the 1.10x multiplier. |
| Because we get back an average of 37% of our vote value as curation rewards (yes we are just that good! ;), we can assume that we will get back, on average, $0.4958. Adding this to the original author rewards of $0.75, we get $1.2458 received. | Because we get back an average of 37% of our vote value as curation rewards (yes we are just that good! ;), we can assume that we will get back, on average, $0.4625. Adding this to the original author rewards of $0.75, we get $1.2125 received. | Because we get back an average of 37% of our vote value as curation rewards (yes we are just that good! ;), we can assume that we will get back, on average, $0.407. Adding this to the original author rewards of $0.75, we get $1.157 received. |
| Let’s compare that number to what the member received. With an average curation value across the platform of 25%, we can estimate a value of $0.25 for their curation rewards. Plus, they will receive 75% of our return vote value (of $1.34) in author rewards, or $1.005. This gives a total of $1.255. | Let’s compare that number to what the member received. With an average curation value across the platform of 25%, we can estimate a value of $0.25 for their curation rewards. Plus, they will receive 75% of our return vote value (of $1.25) in author rewards, or $0.9375. This gives a total of $1.1875. | Let’s compare that number to what the member received. With an average curation value across the platform of 25%, we can estimate a value of $0.25 for their curation rewards. Plus, they will receive 75% of our return vote value (of $1.10) in author rewards, or $0.825. This gives a total of $1.075. |
| $1.2458 vs $1.255 | $1.2125 vs $1.1875 | $1.157 vs $1.075 |
As we can see, a $1 vote being rewarded with a $1.34 vote gives just about even results to both parties. Although the 1.34x multiplier might be too high, it's not too high by very much. This clearly shows that this set-up is better than a self-vote for both parties.
Because of this, there is some benefit to offering a high multiplier as ‘promotion’ - as we encourage and educate our Steem Basic Income members about this mechanic. We would like to be able to replace our 10% self-vote target entirely with upvote-multiplied payments to member accounts. This would benefit all involved, and make the program more sustainable.
Another Example
Let’s look at this from one more angle, just to complete the picture.
| 1.34x | 1.25x | 1.10x |
|---|---|---|
| We currently need approximately 743 SP to deliver a weekly $1.34 upvote. Our current lease costs on that SP are 3.215 STEEM. From a $1 incoming vote we get $0.75, plus we get curation of $0.4958, which totals $1.2458, or about 2.793 STEEM*. This shows again that 1.34x is too high with the currently expensive lease prices. | We currently need approximately 693 SP to deliver a weekly $1.25 upvote. Our current lease costs on that SP are 3 STEEM. From a $1 incoming vote we get $0.75, plus we get curation of $0.4625, which totals $1.2125, or about 2.718 STEEM*. This shows again that 1.25x is a little too high with the currently expensive lease prices. | We currently need approximately 610 SP to deliver a weekly $1.10 upvote. Our current lease costs on that SP are 2.64 STEEM. From a $1 incoming vote we get $0.75, plus we get curation of $0.407, which totals $1.157, or about 2.594 STEEM*. This shows again that 1.10x is still a little too high with the current price of leases. |
| 3.215 vs 2.793 STEEM | 3.000 vs 2.718 STEEM | 2.640 vs 2.594 STEEM |
The current lease market is a topic for a future article, but suffice it to say that this is why we have let VP drop so much, to avoid taking on unsustainably expensive leases.
*We used a reference price of 0.446 for STEEM for these calculations. A higher STEEM price requires less SP for a specific vote value, but means less STEEM coming back as well, thus the daily price of STEEM only minimally affects these basic calculations. In another future article we may break down the effects of rising STEEM price and falling STEEM price on the program.
Notes about curation
There is an additional positive aspect in this exchange of value with regards to curation rewards. Members who upvote our posts are more likely to give us better curation rewards. How can this be? It has to do with the way our voting algorithm works.
When our members already have enough rshares balance to receive a vote when they post, our accounts vote on them at a scheduled time to maximize our curation rewards. This is good for our program, and everyone involved, as discussed in our previous article on the subject: Fractions of a fraction.
But when a member doesn’t have enough balance for an upvote, the accounts will not vote until their rshares balance is high enough. In that case, when their balance reaches the minimum upvoting threshold, we look for a post that is less than one day old. If that post exists, it will receive a catch-up vote. This can lead to a situation where we are not voting at ideal times for curation on posts from members whose post frequency keeps their rshares balance near this threshold amount.
If these members were to vote for any of the Steem Basic Income accounts, it is more likely that we would vote on their posts at ideal times, and help make the whole program more sustainable!
Upvote multiplier as a Tool
We have started to use the upvote multiplier as another tool to maintain the sustainability and longevity of our program. We believe this provides a powerful incentive for members, as the math shows that this is more profitable for members than self-voting and even vote-selling.
When our VP drops below 15% (as it just did a couple days ago) we adjust our multipliers down to reduce the short-term costs and VP impact of upvoting rewards. When our VP gets back above 80%, we will increase the multipliers back to our target level of 1.34x.
We encourage you to ask any questions you may have in the comments section - our program benefits the more our members understand the mechanics; because the reality is just that good!
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!
Sustainability Coverage and VP Management
Sustainability Coverage is currently at 69.98% and rshares reward rate is 559,871,740 per SBI unit per day. This is another slight improvement from yesterday and we hope to see continued improvement as our recent conversion losses drop back out of the calculation.
The rshares reward rate for bonus units (delegation reward) is not decreased, and you can help increase the sustainability coverage (and thus the rshares reward rate on regular units) by delegating to @steembasicincome.
For more information, please read Into the Heart of Sustainability.
Upvoting Reward multipliers are currently at 1.10x on regular updates and on secondary accounts and comments, until our voting power (VP) recovers to 80%.
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.
