The Impact of Debt Ratios on Authors' Rewards on Steem
Are you one of the many thousands who have published on Steemit in recent months, but are frustrated by the lack of rewards? Do you wonder why there are so many posts earning $0 rewards? There may be an explanation, which has to do with our credit system, and how it works in combination with debt ratios. Understanding how this works will help you take advantage of everything that is available to you on Steemit--you can even earn $15/hour using this system! This article explores the situation and presents ways to work around it if you want to increase your rewards on Steemit.
What is debt ratio?
The debt ratio is used to compare a company's debt level with its assets. The ratio uses two numbers to provide an overall picture of a company's financial condition: The total amount of a company's debts and what it owes in terms of short-term liabilities is compared with its total assets. This ratio provides clues about how well a company can meet its current obligations, such as short-term debts and long-term leases or bonds. The debt ratio does not include all liabilities, however.
Influencing factors
when we talk about an influence, it can be either a push or a pull factor. Both types are important and determine whether your post will be successful or not. A push factor makes people want to do something (in our case, make up their mind), while a pull factor makes them hesitate.
How to improve debt ratio
The debt to equity ratio is one of many metrics a business owner should monitor regularly. This ratio will tell you how well you are leveraging your resources and borrowing power, and whether or not you need to make adjustments. Ultimately, it’s important to keep your current liabilities low in relation to your assets. If a company has a lot of assets, it can take on more debt. So, if a company has high assets but too much debt, that could signal trouble ahead.
Potential impacts from high debt ratios
Lowered voting power for curation and more severe pay cuts for posts that hit a target. When an account has high debt ratios, it will have its voting power decreased, meaning that there is less control over which content gets upvoted to trending and more severe pay cuts when one's posts hit their target. This leads to a situation where authors are receiving less rewards than they would without debt ratios. In addition, because there are less votes overall, authors may need significantly fewer votes to reach trending.
Some perspective on high debt ratios
The first point is that not everyone will care as much about low per-block rewards. If you own a lot of SP, you’re unlikely to be worried if your payouts go down. So if you have a large amount of SP and want to post a lot, then block rewards can be (and often are) secondary to voting power in your decision making process. But what happens when new authors with fewer resources join steemit?