How to Interpret steemit's post valuations

The dollar amount associated with every post represents the total pending payout to that post, all replies to that post as well as any relevant curators.

When a user posts on steemit.com other users are given an opportunity to vote for that post. As they vote the Steem network automatically estimates the total value of STEEM to be awarded to people associated with that post. This means that it includes the total value of all curation rewards and all child posts and their curation rewards.

To be more specific, the value shown is not paid to the post author, but divided among many different authors. Here is an example post tree along with example payouts for the individual posts (not authors):

• 1
  • 1
    • 1
    • 1
    • 1
  • 1
    • 1
    • 1

Total Thread Payouts

steemit.com will calculate the totals as follows:

• 8 = (4 + 3) + 1
  • 4 = (1 + 1 + 1) + 1
    • 1
    • 1
    • 1
  • 3 = (1 + 1 ) + 1
    • 1
    • 1

The result of this algorithm is to enable voters to quickly identify which discussions and trees within each discussion are providing the most value to the network. If a steemian thinks something is overvalued they can quickly find it and downvote it. Threads and subthreads are sorted by total payouts beneath them.

A post is boosted in trending rank any time any of its comments or sub-comments get boosted. This means that the highest trending posts will likely be those with the highest quality discussion.

Payouts to Authors

The amount earned by the author of a post is complicated to calculate in advance because it can change with every vote on every single reply. When a comment earns a payout from Steem half of the payout is given to the author, and half is forwarded to its parent. The parent then forwards half to its parent, aka the grandparent. This process continues until the top of the discussion is reached. Assuming the posts each received 1 STEEM of payout, then the authors of the posts would receive the following:

• 3.25 = (1+1.25) + 1
  • 1.25 = ((.5 + .5 +.5) + 1) / 2
    • .5
    • .5
    • .5
  • 1 = ((.5 + .5 ) + 1) / 2
    • .5
    • .5

Curators Rewards

In order to keep the numbers simple, the above payouts to authors ignore that 50% of all payouts are divided among the curators. It is sufficient to say that for each post at any level, 0.5 would be divided among the curators and each of the authors would receive half as much. The algorithm for dividing among the curators will require a separate post. The following calculation tree shows how much each author would receive after factoring out curation rewards.

• 1.625 = (.625+.5) + .5
  • .625 = ((.25 + .25 +.25) + .5) / 2
    • .25
    • .25
    • .25
  • .5 = ((.25 + .25 ) + .5) / 2
    • .25
    • .25