SBI in an HF21 World - Part 1: 50/50 rewards
Introduction
Much has already been said about HF21 and the EIP by other Steemians. We held off on making any announcements around it because we wanted to be certain it was going to happen. Since it appears to have witness consensus and the development is mapped out in github (and more than half completed already), it’s fairly certain that HF21 will happen.
In this series, we will briefly review each value stream in SBI and what we expect the impact of HF21 will be. The most predictable impact is the from the change to 50/50 curation rewards; in this post we will focus on that change for the bulk of our analysis. We summarize our expectation for each value stream and then break out the details for those that are interested.
TLDR: we anticipate a temporary decrease in total rshares value delivered to members, with stabilization within the first couple of weeks. Once stabilized, members would be earning approximately the same rshares in author rewards as before. Any changes to reward value will be driven by convergent linear rewards, not by the move to 50/50 rewards. We will discuss the anticipated impact of convergent linear rewards in a future post.
Rshares
We are somewhat uniquely positioned among upvote services, because all of our core mechanics and member tracking are already calculated in rshares. That means we don’t have to try to predict the value conversion of those rshares into rewards at the time of payout. The rshares mechanics of Steem rewards protocol are not changed by HF21, only the conversion of those rshares into rewards at the time of payout.
Your SBI membership subscription is to the rshares we deliver, which we can control, not to the value they convert into at payout, which we cannot control.
Curation Premiums
All three of our value streams derive some or all of their sustainability from our curation premiums. In aggregate, we are receiving back 35% of our total upvoted value in curation (a nice premium over the platform-wide 25% average). If we are able to maintain our current performance levels in the face of convergent linear and downvoting pools, then we expect curation rewards to return 65-70% of our outgoing upvote values to us.
Upvoting Bonuses
Each time a post or comment by Steem Basic Income is paid out, we tabulate the rshares that are contributed by each member and add it to pending member balance, with a 1.10x multiplier. The total value members receive from upvoting us is split between curation rewards on their original vote and author rewards on their upvotes from us. The ratio of the split will change, but the average value members receive from upvoting us will be mostly the same.
Upvoting Bonus Breakdown
In our Into the Heart of Sustainability we broke down in detail how the rewards distribution between author and curator enables us to return extra value to members that support us with their upvoting.
Under HF21, members get 50% of their upvote value back in curation (on average - some members do better than others and some is returned to reward pool). When we upvote back at 110% of the rshares we received, the author rewards portion of the rshares that we return would be 55% of the rshares we received. In effect, the move to 50/50 changes how much value members will get from their original upvote versus our returning upvote, but the overall picture is unchanged - on average, members will receive more total rewards than the full value of their original vote.
Since the sustainability of this practice is derived from the curation premium we earn, we will monitor our curation premiums closely. Once our curation return rises above 60% of our upvote value, we will calibrate our upvoting multipliers to curation. Trailing 7-day curation rewards are compared to current votable value, so we expect this to happen within 6 or 7 days of HF21 release date.
Delegation Reward - Bonus Units
Daily rshares from delegation rewards are not expected to change very much. Delegation to Steem Basic Income will continue to be one of the most rewarding options available.
Bonus Units Breakdown
Bonus units are already calibrated to return our curation premium directly to the delegators. We track the deliverable rshares for 2 SP and return 75% (author reward) + (curation return) to delegators’ rshares balances. Over the first week after HF21, we will cut the 75% down to 50% as the curation returns gradually rise from 35% up toward 70%.
Regular Subscription - SBI Units
Transition to 50/50 will initially result in lower rewards for members. Soon after HF21 release, the increased curation rewards will drive up our sustainability multiplier, resulting in a higher rshares earn rate for members, with author rewards portion in line with pre-HF21.
Regular SBI Units Breakdown
As explained in Into the Heart of Sustainability, SBI upvote values are calibrated using a ‘sustainability multiplier’ that identifies what % of our 2 SP per SBI target is covered by our curation rewards, author rewards, native SP, and member delegation.
Right now 36% of the SP target is covered by curation rewards, and only 20% by author rewards. Losing a third of our author rewards would only cause our sustainability multiplier to drop a few percentage points. Doubling curation rewards would increase it by quite a bit more than we would lose.
A sustainability multiplier move from 80% to 110% means each SBI would be backed by 2.2 SP instead of only 1.6 SP (100% coverage represents target of 2 SP supporting each SBI unit). That's a 37.5% increase that fully covers the entire author rewards change from the move to 50/50.
Conclusion
When Steem Basic Income was originally launched 18 months ago, there was already talk of a move to 50/50. At that point it was extremely theoretical. I have always supported that part of the proposal, as I believe that improved curation rewards will actually improve the quality of content discovery, enabling content creators that are dedicated to ‘quality’ to actually earn more.
When we began to calibrate sustainability multipliers into our system earlier this year, that gave us the flexibility to adapt quickly to the move to 50/50 curation rewards. Curation rewards are already built into our system in a way that continuously returns their value to our members.
In the next post in this series, we will explore convergent linear rewards and value concentration. Then we will talk about the role of personal responsibility in a decentralized world. The most unpredictable impact of HF21 is how large stakeholders will manage their new downvote pools, and surviving in the new ecosystem will require a higher level of individual awareness about how much ‘quality’ your own material has.
Enrollment
If you want to join, or to increase the level of basic income to which you are subscribed, enrollment is pretty straightforward:
Just send 1 STEEM to @steembasicincome. Include the name of a Steemian to sponsor in the transaction memo (preceded by @). You and the person you sponsor will each receive 1 unit in the program. You can sponsor any active Steemian, it does not have to be a current member.
If you're unclear, please check out our full transaction memo guidelines and then let us know if you have any questions.
https://steemit.com/busy/@steembasicincome/transaction-memo-guidelines
The official currency for enrollment is STEEM. If we choose to accept SBD without refunding it, you do not receive extra value for it.
Enrollments are processed automatically every 144 minutes.
Questions about Steem Basic Income?
Please read our recently published FAQ. Most questions are addressed in our FAQ or in the additional resources that it suggests. If you still have questions, ask in the comments section or join us in our discord channel.
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Brought to you by @tts. If you find it useful please consider upvoting this reply.
Ever since I noticed the switch where everyone became serious about implementing these changes, I wondered how it would effect some of the long-established businesses and communities. Especially SBI since it is closely tied to the general upvote economy. Really glad to hear that you are pretty well sorted on how it will go down. It actually seems that these changes would make for even better sustainability as well.
On top of all that, better content discovery may actually increase SBI curation rewards as well because authors with SBI tend to be more active and “quality” Steemians, so to speak. I look forward to seeing how HF21 changes the game for us all. I’m also curious about your take on the convergent curve 👏🏽. Thanks for the thorough breakdown!
Thanks for the feedback. We're not sure on how quickly a lot of programs will transition or adapt. A lot of things (like bid-bots) are sort of buyer beware and don't have to change much... just wait for their customers to figure out the math and adapt their bids.
Other things (fixed upvote services) will be much more problematic and could be extremely unprofitable to use if they don't make the right adjustments.
With convergent linear, SBI could become the most profitable option available, because steady SBI upvotes will move your content 'up curve' and get your more value from all of your other votes.
Convergent linear also creates inverted curation incentives, where it may be better to wait and vote on something with a lot of votes than to be early on something that ends up with few votes. The post about convergent linear should come out in a few days (probably same day next weekend).
🙌🏽 I really hope that SBI gets even more powerful under the new rule set. I think the move toward a more community oriented Steem ecosystem will be helped by the similar principle of having community initiatives like SBI to upvote your posts and help raise the curve. Awesome, can’t wait for that read!!
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Great write up! Thanks for the explanation. I know there has been a lot a questions about sbi after the hardfork.
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While, to some, there still may be a feeling of uncertainty or confusion. The overall message here is continued engagement, and transparency. There is a lot of work "constantly" going on in the background... and if you are a part of the @steembasicincome Discord, you've seen this first hand.
I'm rather proud to say, I'm part of this initiative, and would conclude by saying; if you still have not joined in... no better time, than the present!
thanks ! :) @steembasicincome for explanation 💙 ♩♬
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That for the communication as I have been wondering about this; look forward to further discussions on this as it will be important for many to understand the changes and how to adjust moving forward.
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With HF21 coming, I'm thinking investing liquid Steem into SBI wasn't the best way to go. Should have been SP! 😔 Soon, I'll be giving out 50% of my investment rewards 😑
Heh! Not sure I understood anything in the explanations or strategies above, very complicated for a low brain investor like myself 😏
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Pretty obvious that you didn't understand it, since we just explained that everything will adapt automatically. Move to 50/50 means giving out 50% of larger upvotes than you were getting before, leaving you with about the same as you're getting now.
So it's not beneficial nor detrimental then.
Not the 50/50 change. Convergent linear will have a bit more impact, but it will depend on how heavily members are depending on SBI votes, versus using it as a base to build actual readership.
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Plant trees with @treeplanter and get paid for it!
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@martin.mikes coordinator of @kedjom-keku
Yeah, this is better. Thanks!
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Does SBI plan to use their free downvotes at all?
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@improv free? Downvoting uses VP last I checked.
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This post was a response to community discussions around "Economic Improvement Proposal" which is likely to be included in Hard Fork 21.
One of the changes in the proposal is that all accounts will receive a separate downvote pool equivalent to 25% of their voting power. Any downvotes would come from the downvote pool first and only come from regular voting power when the downvote pool is depleted.
We will evaluate the best way to use the free downvote pool going forward.
Most likely we would provide limited support to anti-abuse initiatives that provide a clear framework for what they will downvote.
@steembasicincome HF21 is not able to understood for common investor they are making things more complicated even they want to end up the reward with zero but price will not rise with it as you see HF20 decrease the author reward many investor left steemit forever
I apologize that I was not able to understand your meaning.
thanks for explaining this in clear way.
To delegate should I announce it somewhere?
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As long as you are already enrolled, your delegation will be processed automatically. (Enrollment is required before delegation for bonus units).
!sbi status
Hi @tomhall!
Structure of your total SBI vote value:
To reduce blockchain clutter, you can also check your status in our Discord server!
https://discord.gg/VpghTRz
!abi status
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!sbi status
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Hi @salimbur!
Structure of your total SBI vote value:
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I wish you a beautifull sunndy sunday morning
!sbi status
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Hi @cst90!
Structure of your total SBI vote value:
To reduce blockchain clutter, you can also check your status in our Discord server!
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!sbi status
Hi @contestkings!
Structure of your total SBI vote value:
To reduce blockchain clutter, you can also check your status in our Discord server!
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!sbi status
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Hi @roger5120!
Structure of your total SBI vote value:
To reduce blockchain clutter, you can also check your status in our Discord server!
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Unfortunately that is not important. As I already wroet in a different post, the most important factor is what you write about.
best post of the day under "anime" tag = 20 cent
mediocre "art" bpost = 2 dollar
auto-generated Bitcoin soothsaying post = 5 dollar
btw. If you search for someone to sponsor SBI shares to, @akibasteem is always a thankful target. To make that 20 cents under anime into 20 dollar :D
This is why I put 'quality' in parentheses. It's a subjective value that the blockchain is only able to reward imperfectly, based on upvoting/downvoting consensus mechanism.
Thank you for keeping the information up to date.
Hi @steembasicincome!
Your post was upvoted by @steem-ua, new Steem dApp, using UserAuthority for algorithmic post curation!
Your UA account score is currently 6.018 which ranks you at #345 across all Steem accounts.
Your rank has not changed in the last three days.
In our last Algorithmic Curation Round, consisting of 181 contributions, your post is ranked at #26.
Evaluation of your UA score:
Feel free to join our @steem-ua Discord server
Thank you for breaking it down for us
!sbi status
Hi @ddrfr33k!
Structure of your total SBI vote value:
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Congratulations @steembasicincome!
Your post was mentioned in the Steem Hit Parade in the following category:
Thank you for updating us on HB21, it's coming whether we like it or not, and I'll still be here on the other side. 👍👍
Thank You for some insight into the HF21. Your explanation helps .....
The down voting pool concerns me, there are abusive accounts with almost 0% VP down-voting everyone!
Are there any plans to hold this type of abusive down-voting account responsible??
The only way to deal with anything 'abusive' on Steem is by coordinated action. Build consensus that the activity is abusive, and then band together to take action. Even with downvote pool, downvote has always been more 'expensive' than upvoting.
As long as 'good actors' outnumber bad, it is only the cowardice, greed, and lack of coordination of the good that enables the bad to continue unchecked.
“Bad men need nothing more to compass their ends, than that good men should look on and do nothing.” ~John Stuart Mill
This post has received a 3.13 % upvote from @drotto thanks to: @sbi-booster.