One of the most confusing aspects of using Steem and Steemit is understanding how the rewards payouts are calculated. Not only is the basic formula quite involved, but the whole situation is made far more complicated by what amounts to a bug in the User Interface of Steemit.com - Allow me to explain.
The basic formula for calculating post rewards, relative to the amount you see shown under a post in Steemit.com is:
75% goes to the author
25% goes to the curators (the users that upvote the post)
So far so good.
The amount that goes to the author can be paid out in two ways, depending on the payout option chosen by the author when they created the post:
Either receive 50% of the author reward in SBDs (Steem Backed Dollars) and 50% in Steem Power OR Receive 100% of the payout in Steem Power.
Steem backed dollars are intended to be a stable currency that is pegged to the US Dollar, but in practice that isn't what has resulted due to traders pushing the price up beyond the control of Steemit Inc. and the witnesses who help set prices for the currencies. Steem Power is the non liquid form of Steem that is used when voting for posts on the Steem blockchain - Steem power is your power to act on the network.
So that's the basics.
The problems start when we realise that the figure that is shown in the Steemit User Interface is not actually listed in either US Dollars or Steem Dollars.. I think this is the result of a poor design choice early on that was based on the logic that the Steem Backed Dollars would always be worth around 1 US Dollar - but now they aren't. Let's look in more detail.
As you can see in this helpful tool at steem.supply, the SBD compontent of the 50%/50% payout option is easy to understand since it is a direct 50% cut for the value seen in the Steemit interface.
So, for example, if your post says you will be paid out $100 then 75% of that will go to you as the author (75$) and then 50% of that 75$ will be your direct payout in Steem Backed Dollars - meaning you will receive 37.5 SBDs for this post. The confusion comes when calculating the Steem Power payout because it IS calculated based on the US Dollar price. Therefore, to calculate the Steem Power you will receive, you need to work out how much steem you will get for $37.5 US Dollars and that is your final value in Steem Power.
I see this as a bug, not a feature simply because it adds unnecessary confusion to the system that adds to the burden of complexity for users when things really should be and could be much more simple.
If Steem Power payout is being calculated differently to SBDs (apparently for no reason other than because there was originally an expectation that SBDs would be worth 1 USD) then I can see no justification for that other than it is an oversight.
How Might This Be Improved?
Since we have become used to being paid out a high value in SBDs for posts now, we have something of a challenge. Logically, we need to adjust the way the payouts are calculated/displayed, so that the figures shown in the User Interface are adjusted to take into consideration that the SBD value is not pegged to 1USD.
I think this would make the system a lot more simple to use.
What do you think?
Wishing you well,
Ura Soul
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