Overview Of Dept-to-Ownership Ratio, Its Influence On Author's Payout, And How To Track It

Hello great minds of this noble community.

I trust you are coping well with the system as I am doing over here.
It is about three to four months now, since the author payout system changed from the norm that we are familiar with.
As most of us know, the reward system is represented by 100% whereby author receives 50% and the remaining 50% goes to the curator.
Of course, authors used to receive 25% of their post payout author in SBD and the remaining 25% in auto staked SP (Steem Power), until the recent 2022 crypto crash and other factors, leading to the decrease of all crypto assets' value including STEEM, with the exception of some stable coins.

The Steem blockchain has been design with a mechanism such that in trying times like this, it stops or reduces the SBD printing rate to safeguard the value of Steem and the Steem ecosystem at large by decreasing the amount of Steem generated or awarded through SBD conversions.
This concept is termed as dept ratio or dept-to-ownership ratio, which is thoroughly explained as follow.

When a token is considered as ownership in the total supply of tokens, then a token-convertible-dollar as SBD may be
viewed as debt.
Clearly, SBD is a dept instrument on the STEEM blockchain as is it a token-convertible-dollar, whiles STEEM is the ownership token.

The rampant supply of STEEM through SBD conversions can effectively reduce the value of STEEM in the market, since high supply normally leads to token devaluation as a result of massive selling.

With this, STEEM will become worthless and unattractive to investors, although it is the ownership token which is supposed to be very attractive in order to arouse the interest of investors who will help build the ecosystem.
Therefore SBD printing stops when the dept ratio reaches or exceeds 10% of the total Steem market cap in order to ensure a balanced STEEM/SBD ratio, and help keep the STEEM value in check.
The STEEM/SBD ratio is simply the number of Steem tokens that back or goes in an SBD.

Leaving the SBD to STEEM convertion rate unchecked can negatively contribute to the demise of the STEEM blockchain, given worthless ownership tokens backing the dept token, therefore the STEEM blockchain has been designed by its developers in such a way that the dept ratio do not exceed 10% of STEEM market cap, whereby the blockchain automatically stops SBD printing when the dept ratio reaches or exceeds 10%, as a means to protect the value of STEEM and its ecosystem.

A rapid change in the value of STEEM can negatively or positively affect the dept to ownership ratio, and that is the reason why the
blockchain automatically prevents the debt-to-ownership ratio from escalating in times of bearish markets, by ensuring a reduction of the amount of STEEM
generated or produced through SBD conversions just to see to it that the
blockchain doesn't have higher than a 10% debt-to-ownership ratio.

Apparently, in bull markets the dept ratio becomes low as Steem price generally increases, leading to fewer STEEMS required to back a single SBD, whiles in bearish markets like the current trends result in high dept ratio, therefore more STEEM tokens goes into 1 SBD.

Now let's take deep look at the effects of the dept ratio on author rewards.
There are basically three phases of the dept ratio and each has its impact on author's payout or rewards earned.

First, if the dept ratio is less than 9%, authors receive the normal 50% SBD and 50% SP.

Second, if the dept ratio is greater than 9% but less than 10%, authors receive STEEM, SDB and SP

Lastly, if the dept ratio exceeds 10% of the total STEEM market cap, authors receive only STEEM and SP.

The table below gives a clear presentation of the phases and effects of the dept ratio on author payouts.

Dept Ratio	Author Reward
Less than 9%	SBD & SP
In between 9% and 10%	STEEM, SBD & SP
Greater than 10%	STEEM & SP

let's take note that authors receive TRX rewards at each stage of the dept ratio, and the number of TRX tokens received are usually proportional to the SP earned. Therefore, we can conclude that SP and TRX are not negatively affected by the dept ratio, but they increase as SBD decreases on payouts.

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Tracking Dept Ratio and SBD Print Rate Using Calculations.

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It is time to figure out how the dept ratio is tracked and calculated.

The dept ratio is simply the ratio of SBD market cap divided by the ratio of STEEM market cap.
Thus, the ratio of SBD market cap to ratio of STEEM market cap, equals to dept ratio.

The SBD market cap comprises the current SBD supply, where as the STEEM market cap considers its total virtual supply.
By then, SBD market cap is the total SBD supply multiplied by its proposed 1USD peg, whiles the STEEM market cap has to do with the virtual STEEM supply multiplied by its current price.

Dept Ratio = SBD Market Cap / STEEM Market Cap

SBD market cap = Current SBD supply × 1USD

STEEM market cap= virtual STEEM supply × current STEEM price

SBD Print Rate = 100%×(10 - dept ratio)

Example; 100×(10-9.2)= 80%

Using the above formulas we can calculate to get the dept ratio and further get the SBD printing rate.

Note: the formulas are not officially included in the STEEM white paper, but I got them through thorough research.
It is therefore necessary to make effective use of the platform I will be introducing you to in the next section of the article.

Below is an illustration of the calculations.

Token	Total Supply	Price (USD)	Market Cap
STEEM	454846372.845	0.26908	12390062.0051326
SBD	11542707.398	1 (peg)	11542707.398

Dept Ratio= 11542707.398/12390062.0051326
Dept Ratio = 0.931610139902319

Therefore the dept ratio is 0.93

Using the Dept Ratio to find SBD Print Rate

100%×(10-9.3) = 70%

Therefore the SBD print rate is 70%

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Tracking Dept Ratio and SBD Print Rate Using Steemworld

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Sometimes our calculations may not not be valid, due to miscalculations and frustrations or we might prefer not to try at all.

There are no worries so far as there exist steemworld.org

With steemworld we can easily check both the dept ratio and SBD printing rate efficiently.

Just search www.steemworld.org on your browser.

• Sign in by inputting your username and private posting key.

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• Click on Dashboard.

• Navigate to the right and click Market info, and then scroll downwards.

• Here we go!

So simple, no calculations required 😊

The dept ratio together with the SBD printing rate respects STEEM value, therefore they always change in correspondence with STEEM value.

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Conclusion

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The dept ratio can only be diminished by the increase of STEEM market cap, therefore we should hope things turn better in the STEEM market, in order for the dept ratio to be less than 9%, then there will be 100% SBD print rate together with our normal SP back as author rewards.

Kind regards to @steemchiller, infact the steemworld platform carries a lot, and therefore worth embracing. No wonder it was built with ❤️

Fellow Ghanaians, I will draw the curtains on dept ratio here.
Thank you, stay healthy and steem on.

All screenshots from www.steemworld.org