I have written this pots in order to bring a better understanding on what Vests and Hive Power represent on the Hive blockchain and also provide some math upon that. First of all you should know that Vests and Hive Power represent the same thing on the Hive blockchain. Vests is simply the unit of measurement used to represent a user's stake in the Hive network. When a user receives rewards on the Hive blockchain, those rewards are distributed in the form of Vests, which can then be converted to Hive Power for 1:1 approximation to Hive.
Image source: Hive: A Complete Beginner's Guide
Hive Power is the actual amount of governance influence and voting power that a user has on the Hive network. Holding Hive Power allows users to participate in the governance of the network, earn rewards for curating content, and earn passive interest on their holdings which is coming from inflation. While Vests and Hive Power are technically different in terms of their measurement and representation, they both refer to the same underlying concept of a user's stake in the Hive network.
To try to bring some clarity on the Vests and Hive Power weight, I will bring some math into the equation. Basically we have the following concepts and let's try to see the relation between them.
- 1 Hive = 1 Hive Power
- 1 Hive Power = ? Vests
The formula for HP:Vests ration is the following Hive Power = Vests * (total_vesting_fund_hive / total_vesting_shares). We can get the needed parameter values (total_vesting_fund_hive and total_vesting_shares) from the HIVE REST API (https://developers.hive.io/apidefinitions/#condenser_api.get_dynamic_global_properties).
Hive Power = Vests * (total_vesting_fund_hive / total_vesting_shares)
Hive Power = Vests * (166,642,985.381 / 297,132,175,267.497)
1 Hive Power = 1,783.046 Vests
If we take for example my account @behiver we can apply the following math:
- 1 Hive Power = 1,783.046 Vests
- Vesting shares = 55,267,941.543357 VESTS
- 30,996.36327 Hive Power = 55,267,941.543357 VESTS
And if we look to the picture above we can see that the math aligns with this conversion ratio and in my wallet I can see that I am currently holding 30,996.364 Hive Power (which would be the correspondent of 55,267,941.543357 VESTS).
Why is this important to know? Well, just because the measurement unit is Vests while we are all accustomed with Hive Power which has the equivalent of 1 Hive when it is unstaked. Before digging a little bit on this I must say that I was quite confused about it as well, but now things make more sense for me. I hope this is useful for others that might had this question or that might have it in the future.
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It seems a bit complex mathematical calculation but I'm beginning to understand it. Vests/vesting shares is another unit of measurement for Hive and it is calculated based on the amount of staked Hive that a user has. I think one of its purpose is to calculate the cost of transactions on the blockchain?
When you are doing transactions on Hive blockchain you are using Resource Credits, a different concept. Vests are in fact Hive Power and when converting to Hive their is a specific ratio that you need to use.
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Right. Thanks for the clarification.
I'm still confused :P I may need to read your post twice or 3 times to understand this topic clearly. no doubt this is an important topic to get knowledge about.
Yeah, not is to get it from the first time. But to summarize Vests=Hive Power and when you want to convert it to Hive you need to use a specific ratio for it.
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Nice explanation! Thanks for doing the work 👍
Much appreciated!
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Also, the number of vests per HP is constantly getting smaller. A few years ago, it was just over 2,000 vests per HP.
Yeah, maybe it has something to do with inflation on Hive, but I am not sure about it.
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Interesting, inflation reduces the value of things, so does the APR of HBD reduce the value of Vests or does topken inflation of Hive reduce the value of vests? I wonder if the number of vests is fixed and the number of Hive not fixed?
Thanks
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I didn't know that, so is it related to inflation?
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AFAIK, yes. But I don’t know the math behind it. A core dev might.
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I am still a bit confused. What is the difference between vesting fund versus vesting shares?
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Now I didn't pick that up, but now I am curious.
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The calculation is a bit difficult but I am trying to understand it by reading it again and again, you have explained it very well.
Ha Ha Ha...
I wrote the same post on Steemit 3-4 years ago!
I must admit however that I appreciate your explanation better then mine. I haven't even considered investigating this part of Hive and I appreciate your elucidation of this unclear area.
Hive is like an onion, the more you peel it, the more your find.
Thank you
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