RE: Musing Posts

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Musing Posts

in musing-threads •  6 years ago 

What determines whether you are going to be rewarded in steem or SBD?

I asked a question a while ago of what stopped me from getting spd and I have checked other people's wallets and found the same result. However after the update I found that i began earning SPD again. Hence I became curious if there is any determining factors resulting in earning spd, steem or both.

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Whether you receive STEEM or SBD is determined by the SBD Print Rate. 

At the moment, the SBD Print Rate is at 100%, which means that 100% of our liquid rewards will be in the form of SBDs. This is a complete reversal of the SBD Print Rate from two months ago until right before the Hardfork, which was at 0%, that's why our liquid rewards were all in STEEM and 0 SBDs over the last two months. Consequently, if the SBD Print Rate goes down to 50%, we will be receiving half our liquid rewards in STEEM and half in SBDs.

So, what determines the SBD Print Rate? This is determined by the level of the STEEM/SBD Debt Ratio. (FYI, this is a percentage, which is calculated by the total SBD in existence divided by the total Steem market cap.) 

Up until a few days ago, before Hardfork 20, the rules were: 

  • If the STEEM/SBD Debt Ratio is below 2%, then all liquid rewards will be in SBD. 
  • If the STEEM/SBD Debt Ratio is between 2% and 5%, the liquid rewards will shift linearly from 100% SBD payouts to 0% SBD payouts.
  • If the STEEM/SBD Debt Ratio is above 5%, then all liquid rewards will be in STEEM.

Over the last two months, the STEEM/SBD Debt Ratio has been above 5%. That's why we have been getting STEEM for all our liquid rewards and 0 SBDs. However, with the implementation of Hardfork 20 the rules surrounding the SBD Print Rate has been updated with the following:

  • If the STEEM/SBD Debt Ratio is below 9%, then all liquid rewards will be in SBD. 
  • If the STEEM/SBD Debt Ratio is between 9% and 10%, the liquid rewards will shift linearly from 100% SBD payouts to 0% SBD payouts.
  • If the STEEM/SBD Debt Ratio is above 10%, then all liquid rewards will be in STEEM.

This shift in the print rules resulted into the 100% SBD liquid rewards that we have been getting over the past few days. This is because even though the STEEM/SBD Debt Ratio is still higher than 5% limit pre-hardfork, it is now lower than the new 9% limit under Hardfork 20. 

Why the change, though? Apparently, the change was done in order to limit the supply of SBD and therefore, prevent further downward pressures into it's price. This way, people will be more likely to hold STEEM, than SBD.

Hope this helps.

Sources:

  1. Steem Velocity Hardfork - Hardfork 20. https://steempeak.com/steem/@steemitblog/steem-velocity-hardfork-hardfork-20
  2. SBD Explained. https://steempeak.com/sbd/@timcliff/sbd-explained

(UPDATE: Made a correction, changing the word "STEEM" into "SBD" in the second sentence of the final paragraph.)

It all depends on the average Debt/Equity ratio 3 days prior to the post payout. Debt Ratio can be easily calculated by using the formula below:  

Debt Ratio = (Market Cap for SBD / Market Cap for Steem) x 100% 

With Hard Fork 20 just implemented days ago, the new rule on how the blockchain reward it's users is as follows:

  • If the Debt Ratio is below 9% then all liquid payouts are in SBD
  • If the Debt Ratio is between 9-10% then liquid payouts will shift linearly from 100%SBD and 0% Steem
  • If the Debt Ratio is greater than 10% then all liquid payouts are in STEEM.

The current Debt Ratio is at 6.14% which is far below 9% and is the reason why all liquid payouts everybody gets are in SBD.

If you want to check what the blockchain's Debt Ratio is at the moment, you can easily check it here yourself: http://www.steemreports.com/steem-sbd-info/

The current hardfork determinant whether our rewards are in Steem or SBD is by checking the debt ration of Steem. 

With the new hardfork, if the debt ratio is below 9% we will be receiving 100% rewards in SBD (50% in the form of Steem power is constant). 

If the debt ratio plays in between 9-10%, then a proportion of Steem/SBD will be given to us (the same thing happened last hardfork where the debt ratio became in between 2-5%). The closer the debt ratio is to 10%, the bigger portion of Steem rewards will be given.

If it exceeds 10%, then we will be receiving all Steem rewards (100% in Steem). 

To calculate the Debt ratio : 

 Debt Ratio = Market cap of SBD/ Market cap of Steem  

check steemd.com for more information or steem.supply


It is all calculated on the debt ratio.

 When the STEEM/SBD debt ratio is between 3% and 5% we will receive no Steem and all rewards will be in SBD.

 When the STEEM/SBD debt ratio is between 2% and 5% it will be a mix of SBD and Steem depending on percentages.

 When the STEEM/SBD debt ratio is more than 9%-10% we will receive 100% Steem like we had recently.

This has just changed recently during the hardfork.


Steemit determines whether you would be rewarded in steem or SBD. they can change the reward currency at any time. Though I think demand and price also determine the currency that you'll be rewarded in. But all is determined by steemit