Every post submitted to STEEM is voted upon by users. These votes help other users identify content that is worth their limited attention and bring significant value to the platform. Steem recognizes that sifting through the abundance of new submissions is work that deserves to be rewarded.
Voting on Posts
Users with vesting STEEM have the ability to vote on posts. Voting Power is rate-limited and decays by up to 5% every time a vote is cast. Voting Power regenerates to 100% over 24 hours. Your ability to impact the payouts a post receives is based upon your current Voting Power times the total vesting STEEM and is known as STEEM Power.
To maximize total STEEM Power applied to posts, users should vote on at least 20 posts per day. Voting on more than 20 posts per day has exponentially decreasing influence on total STEEM Power used.
How it Works
Every time a post gets paid, 50% of the payout is directed toward those who contributed the most to increasing the posts payout. To maximize your potential payout from voting you should follow these simple rules:
Only vote on posts that you believe others will also vote for.
Vote as early as possible after the content is posted.
Don’t vote on content that is already popular
Acquire as much vesting STEEM Power as possible
The less STEEM Power you have the more important it is for you to focus your votes on a few good posts rather than spreading your vote thin. In particular, users with small amounts of vesting STEEM should:
Vote on content others haven’t voted for, to maximize the percentage increase in voting
Vote on fewer posts, the more you vote the more diluted your STEEM Power.
Challenges with Rewarding Voting
The saying you “get what you pay for” has never been more true. In this case we must be “careful what we pay for” or we might not get the result that we want. If Steem simply paid people for voting then tech-savy individuals would simply vote for everything to maximize their payout. This type of behavior would add no new information and therefore no value to the platform. The reward algorithm must be designed to reward information while preventing gaming and automation.
Reward Percentage Increase in Voting
The algorithm has been carefully designed to minimize the impact of automated voting algorithms. In particular, we want to reward voting on posts that the network has the “least information” about. This means that being the first person to vote for a post gives you the greatest possible weight for your STEEM Power.
A human has a better chance of predicting the success of a random post with no votes than a computer algorithm. At best a computer algorithm could use historic performance of the poster to guess. If an algorithm is used, it will have to be a sophisticated algorithm that actually does add some value. After all, the algorithm isn’t able to vote on everything and gets exponentially weaker more it dilutes its vote.
Someone who adds 1 vote to a post that already has 99 votes will get a weight of .01. On the other hand, someone who adds 99 votes to a post that already has 99 votes will end up with a weight of 25.
The order of voting matters. Given 4 users with 1 vote, and 1 user with 4 votes the payout received by individual voters can be dramatically different. If the 1 vote users vote first, then their weights will be:
Vote: 1, 1, 1, 1, 4
Weights: 100, 25, 9, 6, 25
Percent: 60%, 15%, 5%, 3%, 15%
If the order were reversed then the weights would be:
Vote: 4, 1, 1, 1, 1
Weights: 100, 4, 3, 2, 2
Percent: 90%, 3%, 2%, 2%, 2%
Reward Vote Concentration
Human voters can only process so much content per day. A script that votes on everything is guaranteed to have a much smaller percentage of the winning posts than someone who applies some human intuition. This vote concentration is rewarded automatically by paying out rewards based upon percentage increase in total votes, with one small caveat: the first voters can have very large percentage increases with very small stake.
Imagine someone who has 4 accounts with STEEM Power of 1, 2, 3 and 6. If they vote consecutively, then each vote after the first would see a 50% increase, with the first vote seeing 100%. If we were to sum the weights based solely on (percent increase)2, the attacker would start out with 1.75 using this strategy compared to starting out with 1.0 by voting from one account with 12 STEEM Power.
Ideally, it should always be better to vote with 1 account than to divide up your stake and vote from multiple accounts. To achieve this we multiply the (percent increase)2 by the STEEM power of the vote. This gives the following vote weights:
Multiple Accounts: 1 + 1 + 1.5 + 3 => 6.5
Single Account: 12
The conclusion is that someone voting with all of their stake at once gets twice the final payout of the same individual voting multiple times through multiple accounts. It is true that the rich get richer when viewed from the perspective of an individual post, but when viewed as a whole the playing field is much more even. Regardless of how rich someone is, they can only evaluate so much content. The rich individual also has the most to lose from poor voting.
The Math
The network will automatically divide the 50% payout among all users who voted for a post on a pro-rata basis using the following equation to measure the weight of each voter:
let total_vote_reward = 50% of the content reward
let steem_power = the total STEEM power of the vote
let current_total_steem_power = the combined STEEM power of all past votes
let new_total_steem_power = current_total_steem_power + steem_power;
let vote_payout_weight = steem_power * (steem_power/new_total_steem_power)^2
let total_vote_payout_weight = sum vote_payout_weight for all votes on the post
let vote_payout = total_vote_reward * vote_payout_weight / total_vote_payout_weight
Disclaimer
Any numbers or equations presented above are notional and may contain errors. The actual rewards
are defined the by the open source software. It is your responsiblity to review the code or hire
someone to review it for you.