When you write a post on Steemit.com, you’ll see that there are three options for the rewards:
- Power Up 100%
- Default (50% / 50%)
- Decline Payout
If you choose to power up 100%, you’ll receive all rewards of the post as Steem Power (SP). This means it will go straight into your SP account and you will have to power it down over 13 weeks if you want to withdraw it.
If you choose the default option (50% / 50%) you’ll receive half of the rewards as SP, and the other half as Steem Dollars (SBD). If you watched my previous video, you know that Steem Dollars are supposed to be pegged to the US dollar, but aren’t currently worth more than that. As a result, the 50% / 50% payout option is by far the best option.
To better understand this, lets imagine you’ve earned 10 STEEM worth of author rewards for a post. If you choose the power up 100% option, those 10 STEEM will show up in your account as SP. If you choose the 50% / 50% option, 5 of those STEEM will show up as SP, and the other 5 will be converted to SBD based on the current market price of STEEM. So if the market price of STEEM is $5, which means 5 STEEM are worth $25, you’ll receive 25 SBD.
Note: Please see the comments from @sambillingham below, which explain this from a different angle and give some really helpful examples!
But here’s the thing! Because SBD are worth more than a dollar, you can convert them into STEEM and in the end you’ll get an extra bonus of STEEM compared to if you had taken the power up 100% option for your rewards. There’s a great illustration of the breakdown in this post from @sndbox if you want a more visual representation.
I know that this is probably pretty confusing still, but it’s an important thing to keep in mind considering the current value of SBD.
I hope I was able to explain this well — please let me know if you have any questions!
Thanks for watching. 😀
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I always enjoy watching the videos you put out, always informative and I love learning more and more about this platform!
Glad they have been helpful! 🙂
Yeah, it can be confusing, but it's definitely interesting to learn more about this stuff!
The rewards are pretty confusing at first. It makes it difficult to succinctly explain the reward system to people. Unfortunately I don’t think your explanation is quite right here.
I’ve heard a couple different names for the value you see next to your posts. Steem Token Unit & Steem Payout Unit. I’m not sure if there is a definitive name?
$10SPV (STEEM PAYOUT VALUE - what you see on your post )
Ignoring curation & beneficiary.
100% - 10USD(worth of STEEM POWER)
at 50% - 50% - rewards 5SBD & 5USD(worth of STEEM POWER)
I think maybe my explanation didn't illustrate things clearly, but I think I was explaining similar behavior as your example.
My example above is if someone earns 10 STEEM worth of author rewards (not that the post displays $10). So the value I'm talking about is the value of SP that would be shown for the author rewards on a 100% powered up post that has paid out). I should have made a note to clarify that the post would show (10 STEEM * 3.5 day moving average of STEEM value) + (total curation rewards value) as the value at the bottom. From my recent posts it seems like the beneficiary rewards are included in the total post value until it pays out, and then it only shows the total of the author and curation rewards?
So for my example the 10 STEEM of author rewards (not the post value) would arrive as:
I explained it like this because I thought the important concept to keep in mind is that the price of a post will fluctuate, but the STEEM earned by a post stays the same. So if I've earned 10 total STEEM on a post, it might show $30 or $60 depending on what the market is doing, but a 100% powered up post will still receive the same payout regardless of the market (once you factor in curation and beneficiary rewards). The price of STEEM only affects how much SBD you receive.
Does that make more sense? I'm pretty sure I understand this one, but please point out my misunderstanding if I'm still just not getting it! I think the fact that it's taking this much brain power to explain a pretty basic feature of this platform says something about how overcomplicated it is. 😆
Nice!! Simple and easy to understand explanation
I'm glad it was helpful! 😀
Thanks for sharing
Thanks for watching! :D
I'm still getting to grips with all this.
I've read that the dollar reward of any given post is not an accurate figure. I think people call them Steem Token Units
Don't quote me on this but the dollar amount is approximatly 75% less.
Thanks for the video. I can't get enough of these videos explaining how steemit works while I'm still learning.
Yeah, actually see the comment from @sambillingham above -- he mentions that he doesn't know if that's the definitive name, but it's one people use to refer to that value.
I think maybe the 75% number that you've seen is referencing how about 75% of the payout from a post goes to the author, whereas 25% goes to the curators (people who voted on the post).
I'm glad I could help! It's definitely confusing at first. 😀
Oh yes your right. Thanks.
I know that this is probably pretty confusing still, but it’s an important thing to keep in mind considering the current value of SBD.