Steem’s Golden Triangle: SP, Vests and Rshares
Welcome back to our Sustainability series, where Steem Basic Income takes you along on the journey to understand and achieve sustainability! This week we dive deep into another often misunderstood topic about how the Steem blockchain functions - the difference between STEEM and SP, the relationship between SP and Vests, and how it all relates to rshares. You may remember that the rshares accumulation is a big part of how our internal calculations work here at SBI, so buckle up, you are in for some important information!
Do You Know what Steem Basic Income is?
Steem Basic Income is a social experiment to bring a basic income to as many Steemians as possible. Members join by sponsoring others into the program. Steem Basic Income is delivered through providing regular upvotes to member content.
Many people believe that STEEM and SP are the same; I know I did until just a few days ago. We believe this because when we 'power up' STEEM, we get one SP for each STEEM we power up. Some may have noticed that our SP grows even without curation and posting awards. This is called ‘interest’, and represents ~16.6% of the inflation pool being distributed to SP holders. This is all true, as viewed from the front facing perspective.
And yet, there is another perspective, one that sheds light on the inner workings of these mechanisms.
In the background, everything is calculated using something called VESTS, which generate the rshares used in voting calculations. When you power up STEEM, you are buying VESTS at the current rate. While your SP value is ‘growing’, receiving interest from the inflation pool, your VESTS stay the same, only growing when you are distributed more stake by some other means, such as author rewards or curation.
VESTS come in really big numbers, so the more common terms is MVEST, or one million vests. The relationship between VESTS and STEEM, shown when you look at your STEEM POWER, is changing over time. The Steem blockchain has passed a milestone of sorts, shown below, with more than 500 STEEM needed now for 1 MVEST.
Here at Steem Basic Income, we strive to keep each SBI unit backed by 2 SP worth of voting power, and we have historically used 800M rshares per day as the benchmark. When we originally did this math, there was a buffer zone: 2 SP generated 810M rshares per day. Now that buffer is gone, and even went negative! Our benchmark per unit will now be 790M rshares of balance accumulation per day.
The good news is that it will be another 8-9 months before the votable rshares from 2 SP drop below 790M per day. We are keeping an eye on this and we will let you know when we need to make another adjustment. If you have any question or comment for us, please leave it down in the comments. We will be sure to get back to you!
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