On the Hive blockchain the KE Ratio (Rewards / Stake Coefficient) is an indicator that captures how much reward a user has withdrawn relative to how much HIVE they still have staked. Why does it matter? Well, simply because it can reflect if you are a long term investor in this ecosystem or just one passing by. The simple formula for it would be to sum the author rewards with the curation rewards and to divide their result with the accumulated Hive Power. The result of it would than be used to categorize the Hive user behavior and to have that transparent to the other users - this feature is shown by the PeakD interface together with each value from the formula. Based on this, one can target higher curation to those that are here for the long run, are building and growing with this ecosystem.
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KE Ratio formula
The KE Ratio formula is pretty simple and as I've already presented the contained elements, here it is.
KE Ratio interpretation
The KE Ratio use some simple intervals to categorize a user:
- KE < 1 emphasizes that the user is staking more than they have withdrawn. This might be equivalent with a long term supportive user that contributes and believes in what this ecosystem can evolve into together with its tokenomics.
- KE = 1 means that the user has withdrawn roughly as much as they still have staked. This usually shows that the user is not here for the long run or rather that he doesn't contribute to the health of the economy is any specific ways.
- KE > 1 reflects that the user has withdrawn more than they’re staking. I wouldn't say that such users are milking the platform, but in the same time this shows that this could be just a revenue stream that is invested or used for other purposes and outside the ecosystem from here.
KE Ratio example
A practical example applied on my user 
- Author Rewards = 19,127.73 HIVE
- Curation Rewards = 8,753.98 HIVE
- Staked HP = 50,118.986 HIVE
- KE Ratio = (19,127.73 + 8,753.98) / 50,118.986 ≈ 0.56
The KE Ratio of 0.56 for my account would categorize me as a long term investor in the Hive blockchain and this reflects the reality quite right. But this can be right in my case, but it doesn't necessary apply in the same way for all the Hive blockchain participants. Why? Well, simply because there are some limitations and context to consider as well.
KE Ratio limitations and context
Here are some of the additional items that might interfere with a 100% interpretation of the KE ratio, even if this might apply to a smaller portion of users or to some deviances that could not be easily spoted.
- KE is a snapshot and it reflects cumulative behavior up to the present moment. It doesn’t represent exchanges or history over time. This can mean also that maybe 99% of their time in this ecosystem they were long term investors, but they've steered to a different strategy or have specific needs at some point.
- It doesn’t show context. If someone powers down during an emergency or to invest elsewhere, a temporarily high KE might be misinterpreted. Maybe you use the funds to buy Bitcoin and Ethereum low and when those are jumping off the roof you take the earnings and pour them back into Hive. That could be a strategy on its own, even if I don't think many would do it.
- It should be used with other metrics like reputation, voting behavior, commenting activity or engagement growth to assess an account’s contribution quality. We cannot just look at the "financials", but also to the way they contribute and help grow this ecosystem. For example some can use the funds to pay for developers making tools, games or dapps for this ecosystem, thus even if Hive goes out, also another form of contribution and finite product comes in.
What opinion do I have about the KE ration? I like numbers, so having an indicator providing some additional stats that can bring some lights about an account or another, I think are beneficial. Now, if we should look only to the KE ration when curating or upvoting content, witnesses or DHF proposals? For sure not as that's simply not enough. In the end I think it is a good indicator to start from and maybe spot the long term investors and maybe have a more in depth view for the others... this if we care enough about targeting the curation and using it wisely. But like I said, there is more context required to it in order to get the full picture.