All the different reward curves explained in an easy to understand way. And how they effect you.
All the different reward curves explained in an easy to understand way.
I have seen a lot of users asking for an explanation of the different reward curves and how it will affect them.
In this post, I will try to do just that.
I won't use terms like "Vests" or "Rshares" and things most users don't understand or want to know.
I just keep it simple with Steempower and Payout.
Let's start with the N^2 or the superlinear reward curve.
This curve was around when I joined Steem in 2016 and it looks like this:
As you can see looking at the picture, the more Steempower a post receives the faster the payout goes up.
This also means that the start of a payout is very slow. You need a good initial amount of votes with steempower to get the curve started but once it does it speeds up quickly.
As you can see from the example the first 100K Steempower on the post adds $5 to the post. But later that same amount (100k) of Steempower adds $25 to the post.
Under this curve, we had a 50/50 curation and author reward.
What ended up happening was that some popular authors kept getting all the votes because it was simply easier and more profitable for Steempower holders to receive curation rewards to vote for already popular content than to go out and find gems to curate.
If you were a 'good' curator and no-one else would vote for that amazing piece of content you found then all that time and effort was for nothing and you would have been better off voting for already popular content.
In this time all the Steempower was in the hands of a few.
Having Steempower was useless (unless you had millions) and so was buying it. There was no way you could compete with these giant accounts. Even with 10k SP you couldn't make a dent in your own account and help move it forward.
I remember I had 10k SP at some point and my vote was worth $0,01.
If you were not in the in-crowd you would be looking at $0,00 payouts most of the time and you could not empower yourself in any way to make a difference.
This is why the curve was changed. To make it fairer for everyone!
And that brings us to the next curve.
Linear Curve
This is the curve we have today. The linear Curve.
The linear Curve means that Steempower no matter where in the curve it is given will always represent the same amount of Payout.
The curve is as steep in the beginning as later on. This is why when you increase your amount of Steempower your vote is worth more. The two go hand in hand.
The premise is simple. If you want to give away more payout you need more Steempower or in other words, if you want to empower your account you need more Steempower.
I love this curve because it gives every Steemian control over their own account and they can make it grow.
It's an extremely powerful feeling and a good incentive to build a home here.
And this is what happened. We now have a strong Steem middle class and it's getting bigger with the years.
Linear doesn't come without flaws. Building your account is different for everyone. Some build by using their SP to empower their efforts on the blockchain through blogging or by building a business. Others grow their account simply by upvoting themselves or putting it in a bot.
And as another downside. So-called 'Content discovery' on Steemit.com went down the drain. But I didn't care much about that, it was the same people over and over so from my point of view there wasn't much 'content discovery' to begin with.
A lot of smaller users are empowered now under the linear curve and this is about to change under the new proposed curve.
The new proposed curve
This is the latest proposed curve I could find. It's called the convergent linear rewards curve.
This curve is a hybrid between superlinear and linear.
It starts off as N^2. Which means that you need a good initial amount of votes with Steempower to get it started. I have colored it in Green.
After it's up and running it will change to linear (in yellow) preventing payouts to get to high like back in 2016.
What will this mean for you?
Well if you have no Steempower you need people to vote on your content to get it started. If you don't have these votes now, you are looking at $0,00 payout unless you can find a way to make SP holders vote on your posts and you will need a lot more of them under this curve than linear.
Buying SP will not help you as much as it would under linear unless it's enough to get you out of the start of this curve.
If you are a minnow or dolphin then you will find that your vote when you vote on posts with no votes will be worth a lot less, that's because of the n^2 curve. But if you vote for posts that are doing well it should be about the same as it is today because by then the curve has turned linear.
Orca's and Whales will probably be able to blast through the initial n^2 curve. But I'm not 100% sure by how much.
My fear with this curve is that the middle class of Steem will feel less empowered when it comes to their own account.
Curation will change to 50/50 and a separate downvote pool will be introduced are the other changes that will happen.
A downvote under the beginning of this curve weighs much more than later on when the curve turned linear. The plus side: It will, therefore, be very cheap to combat abuse of smaller accounts and vote them to $0. That's good.
But on the downside, it also opens the door of downvoting people you just don't like besides their content. This is especially dangerous for smaller accounts.
50/50 should increase curation. Although I'm not sure how. If an early vote on a post that later turns out to do very well gives a lot of curation rewards than curation is incentivized.
But I can't yet see how this will prevent votes from piling on posts of which it is already known they will do well.
The problem is that any post firsts need to get out of the n^2 curve zone before it becomes profitable and that takes a lot of SP.
So if you are a dolphin curator and you find a post you think will do well, but then it doesn't, then you essentially wasted a vote much better placed on content that would already do well.
This is the one thing I can't visualize in my head so I hope to get some answers about that.
For me, what it comes down to is that there are a lot of unknowns we have to face.
I hope my post adds to the discussion of making it more clear what those are.
The way I see things now:
Taking power away from the middle class in the hope that maybe content discovery on steemit.com will improve is a huge gamble in my opinion and most of the improvements this curve is supposed to bring are based on the hope that big dolphins, orca's and whales will do 'the right thing'.
I doubt that will happen because not everyone in that group wants to be a curator and they should not have to be on the blockchain of opportunity.
I know linear is not ideal. But it's also not bad. At least it empowers every Steemian equality in a simple rule:
more SP = more power
less SP = less power
Even the people that are accused of abusing the system can only do so with their own share and to take profit from this abuse they will have to sell. The middle class doesn't sell but builds, therefore gaining on the abusers every day. It just takes time to play out.
That's it for now.
I have made this post with my best understandings of the current changes. If I have made a mistake I will correct and write about.
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It will all depend on the parameter C and K: n^2/(n/C + K)
When they find reasonable parameter values, so that a dophin goes into the linear range, than the changes are not that bad.
Thanks for this info, man! That would make a huge difference for sure.
@exyle @holger80 the curve is even more specific:
https://github.com/steemit/steem/commit/e99f97de5a0e9c72b15172b623391bee2049cee4
(n^2 + 2cn)/(n + 4c)There's a reason for this specific form that has to do with the relation the curation curve has to specify and specific implementation choices, and from the thread they will put out that derivation at some point (there's some in my post as well.)
Basically the slope doesn't start at zero, so actually this is a lot milder than we think it will be. Which I think is good for those thinking it's a bit too much of a penalty to stomach, but not for those that want to see a dramatic effect on the lower end.
I think that it's enough to incentivize stacking votes vs low end reward farming. (Comparing two sets of post farms, if one farms at x per post and the other goes slightly higher, the one farming higher will be getting more) and that can cause cascading effects for how they adjust, even with that.
Thanks so much much for the extra info man!
I plotted the graph as best I could and depending on the value of c it changes a bit.
The initial start is now between linear and n^2.
I recorded the change in a video.
for c=1 (blue line).
Have I understood you correctly?
Yup that looks to be right. There's also this interactive tool someone pointed out to me: https://www.desmos.com/calculator/weerzfsi7b which allows anyone to play around with it too (can put more curves simultaneously as well, I believe)
nice! And guess what tool I used :)
LOL right, I feel dumb.
Think it makes more sense to divide by n in order to easily grasp the impact. And to use a logarithmic scale for the x axis.
I hope, whatever curve and whatever parameters are chosen, they will also shift dust level accordingly. Massive amounts of comments seem to be about to shift beneath dust level as things look now, and I'm afraid this will really hurt social interaction on the platform.
This is what things would look like with dust level cut-off added:
Looking at the graphs together, if the proposal is something like the last one, the post rewards will be the lowest yet, overall. So they'd have to increase curation rewards for the curators to bother, which means the reduction is twice over for the authors. So, yes, the platform should be completely cleared of the riff raff and about 90% of others with it.
The linear reward system may not be perfect, but it's balancing out. We've reached a point where most people ignore trending anyway and stick to their communities. There are people on here who have been posting for a couple of years and still only get less than a dollar per post, but within their community they can be voted by minnows for a little something and they enjoy the interactions which come with it. We can wave goodbye to them with that last reward curve.
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Agree with this. I never look at trending. It holds no interest to me, I'm not going to upvote crap because it earns more curation. I upvote to reward content, and to encourage newbies. Communities are important on steem, it will be a shame if they are negatively effected by this change. We'll see.
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As usual the devil is in the details.
If the reward curve for a post turns linear only when the post has 100,000 SP voting for it at full power, I will not vote for anything else but Trending while doing my best to time my vote perfectly. To do otherwise would be an exercise in futility both for me as a curator in possession of about 6,000 SP and the author of any post not going to receive anything less than a large Orca's full power vote worth of votes.
Is the math in this post a mere example or is there any definitive info on where Steemit Inc intends to have the linearity start?
If the linearity is supposed to start at 100,000 SP, then that will truly be the death of organic curation on Steem. Sure, you could use bid bots to get your post above the hurdle, but the risk would be substantial with free downvotes. I'm a regular user of @ocdb and theoretically stand to directly benefit a lot from this. There are only 380 accounts with more than 50,000 SP on Steem. There are about 7,500 active accounts. If each puts out a post a day, that means that each curator with enough SP to amount to anything would have to read 20 posts a day on average. Would they bother to read posts written by the smaller accounts or would the circle jerk for guaranteed profit? We already KNOW the answer to that. It's no longer a matter of guesswork.
Steem will become a big circle jerk again if linearity starts at 100,000 SP worth of votes on a post. That's a certainty. It will be extremely hard for any new author to grow their account here. That means no new authors.
Of course, rewarding users for posting and curating is not the only use case for the chain. There is JSON data storage, which can be used for gaming and digital assets. But by setting the start of linearity at 100k SP will be the death of Steemit and all blogging applications. It will be a very, very quiet chain.
Because I haven't seen any definitive numbers out there, I'm beginning to lean against EIP. I would be very pissed off if my over two years of content creation came to nothing financially. There is a good chance the price of STEEM will come to nothing if 95% of the user base stops posting and is content with auto-voting posts guaranteed to reach the linear part of the curve. I'm sure much of that content would be shitty to boot.
The non-linearity cut off should be at something like 100 SP at most. Anything in Minnow territory or higher would be a total disaster.
Still confused. Still doesn't look like a good idea. sips tea
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It's an example I made. The real numbers are still being tweaked. As @holger80 pointed out:
Well let it die then.. The less authors the more chance for votes for others who work hard to build an account.
I'm kidding of cource but nobody knows how hard it is to put a daily post about an anything on steemit. You can just game but also that the games keeping up with them and blogging, vlogging? Curating. . And besides that have a real life? Wh o w I say ... whow..
But nothing comes for free... if it's too good to be true it is.. building anything is hard work.. even a sandcastle...
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This is absolutely the best reasoning I've seen to be skeptical of the EIP. Most of the reasons I've seen for it are emotional appeals like 'giving more to curators'.
This really helps better understand the situation but not really the logic behind it. It seems as if we are penalizing the fasting growing class of users by numbers.
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They are under the (false?) believe that this will all create insentive for passive stake holders to turn to true curation.
So much good information you have mentioned here my friend. I don't think so most of the STEEMIAN is know about how they got paid with how many STEEM power and how they are able to generate a good amount of STEEM through their voting power and how it could be beneficial to the of holding a more and more STEEM power to keep voting and generating. 👍
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This is a first time when I actually understand the new curve :)
The other posts was just to much of a trouble.
Thanks!
Agree with everything - they are risking a lot...
It'll be good if Whales and orcas would really curate as expected but they will just curate the same circle of friends and gain more power while smaller accounts will get torn down with rewards.
The will be just a Game Of Whales. @exyle
That is damn good education and I like to add a !BEER as an additional little income on this post.
Thanks @exyle for the shared knowledge
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