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.
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.
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.
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.
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.
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.
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.