Steemit Guide : How Vote Value Is Calculated on Steemit and Factors Affecting Vote Value
As amazing steemit is, there are few things about this platform that are difficult to grasp. Even though everything is being taken care of in best possible manner in Steem Blockchain yet somehow one has to know the science behind those “under the hood” things for better understanding.
The focus of today’s post is one such thing and that is “How is vote value calculated and what are the factors that affect the change in vote value of a steemit user”.
To be honest, calculating vote value manually can be really messy, but I will try to put it in as simple words as I possibly can...
Calculation of Vote Value
Concept of Vests
In order to understand vote value, first you will have to make acquaintance with the word “vests”.
You might have come across this word being tossed around in few blogs. This is a pretty massive topic to cover, however, i will keep it simple and easy.
Every steemit user has 3 types of currencies in their wallets. Steem, Steem Power and SBD.
Usually we understand that Steem Power is basically Steem which is just in powered up form. While this statement may be true at a given instance, this is actually not true.
Steem (The Liquid Steem) is actually the cryptocurrency “Steem” that we know and love.
However, just like in a stock exchange, if you’d like to buy shares, you invest some of your money (your liquidated asset) to buy stocks. Now, stocks are also money but not in liquid form unless you sell those stocks to get cash. So the amount of Steem Power is basically that Stock and on steemit, that stock is called vests.
Price of vests is different from price of steem. Let’s suppose that the price of steem remains constant in market, so the amount of steem it would take to buy certain number of vests will be a much more as compared to the amount of steem it would take to buy same number of vests, today.
To summarize, in order to buy Steem Power (Vests), you would sell your Liquid Steem (Cryptocurrency) to have more influence on the platform.
One might ask that what does it mean to have 100 SP if SP is basically vests?
The value you are seeing against your SP is actually the amount of Steem that is required to purchase the amount of vests you have right now.
Its really just another way of showing things differently to make it more graspable to normal users and to keep things simple.
I hope the explanation on vests is adequate and if someone has any further questions on this, they are more than welcome to ask me in the comment section.
I would like to come back to the matter at hand, which is how to calculate vote value.
1. Get Number of Vests You Have Right Now
This is fairly easy to do and does not involve any complex calculations. Go to https://steemd.com/@username
Please don’t forget to write your own username as mentioned in the above mentioned link. Once inside the page, on top right corner, you can spot the amount of vests that you have. For illustration, screenshot is attached :-
I would like to add here that I am a simple man and keep things simple, which means i have neither deleagted my SP to someone nor i have received any delegation from someone. If you have done so (either delegated or received delegation), then this amount of vest is just your original SP and you will need to add received SP and will have to subtract delegated SP in order to get the total vests.
Scroll down the page of steemd and you will find some stats about your account. Look for the word “vests”, which will be somewhere in the middle. Once you spot the stats related to your vests, this is what the actual amount of vests that you have would look like:-
Total vests = vesting shares + Received vesting shares - delegated vesting shares
This will be your total SP in terms of Vests. An illustration of where to find your vesting information on steemd is attached below.
P.S I highlighted Vesting withdraw rate in case you are in power down mode so you can further minus this value from total vests in case you need to find out that what would be your total vests after next power down.
2. Multiplying Total Vests with 1,000,000
The next step involved in calculating vote value is to multiply 1,000,000 with your total vests since steem value is associated with Mvests (mega vests) and 1 Mega = 1,000,000 units.
For explanation purposes, i would calculate my own vote value. So, for this step, my total vests would become:-
791,669.633441 * 1,000,000 = 791669633441 Vests
3. Identifying Recent Claims
Visit https://steemd.com and under the heading of Reward Fund, find the value of recent_claims. A screenshot is attached herewith:-
As per the site, the recent claims amount to 414,899,440,537,694,779. The recent claims are the vests that have been claimed by steemit community in terms of rewards.
4. Division of Total Vests by Recent Claim
This is fairly simple. To make it even more simple, i am naming the product of this step as X1 since it is just an intermediate result of an iteration and not the final answer. So the equation will become:-
X1 = total vests / recent claims (vests) X1 = 791669633441 / 414899440537694779 X1 = 0.0000019081
5. Multiply X1 with Reward Pool Balance
We are fairly familiar with the concept of Reward Pool. Each day, a set amount of reward pool is generated through which we earn our rewards. As the rewards are distributed amongst steemit members (in the form of upvotes), pool starts to decline.
At a given instant, steemd.com will provide you with the remainder of that reward pool balance.
At the time of writing this post, reward balance is 703,681.179. So multiplying reward pool balance with X1 will be :-
X2 = X1 * 703,681.179 X2 = 0.0000019081 * 703681.179 X2 = 1.3426940576499
6. Mutliplying X2 with Steem Price
Steem Price is evidently the most influential factor in calculating vote value (as we all know this already). Here, the X2 Product needs to be mutliplied with current Steem Price. The steem price is calculated as number of SBDs it takes to buy one steem.
The correct steem price on blockchain can be taken via steemd.com under the heading of “feed_price”. Illustration is given below:-
Hence the actual steem price would be
Base price / Quote = 4.151 / 1 = 4.151 SBD/Steem
Now someone might argue that since SBD is of much higher value than Steem, then why does it take 4.151 SBD to buy 1 Steem?
That is because the blockchain will always consider SBD of 1$ Value no matter if it is being sold in open market for 100$.
So Now, multiplying X2 with Steem Price would yield:-
X3 = X2 * Steem Price X3 = 1.3426940576499 * 4.151 X3 = 5.5735230333047349
7. Calculating Vote Value at 100% VP with 100% Vote Weight
My highest possible vote would deduct 2% of my VP so I will calculate my maximum vote value :-
Vote Value = X3 * 2/100 Vote Value = 5.5735230333047349 * 0.02 Vote Value = 0.111470460666094698 $ Vote Value (After rounding off) = 0.11$
And there you go. This is my highest possible vote value. If i want to use different Vote Weights under different Voting Power Percentage then i would simply multiply my Max Vote Value with VP and Vote Weight.
For instance, if I would like to see how much my vote will be worth if I am at 63% VP :-
Vote Value at 63% = 0.11 * 0.63 Vote Value at 63% = 0.0693 = 0.07 (appx)
If i want to throw in 50% Vote Weight on 63% VP then my vote value will be:-
Vote Value at 63% VP and 50% VW = 0.11*0.63*0.50 Vote Value at 63% VP and 50% VW = 0.03465 = 0.04$ (Appx)
Complete Formulae to Calculate Maximum Vote Value
To summarize, i will put the entire calculations done above in single equation :-
Max Vote Value = (Total Vests * 1,000,000 * Reward Pool Balance * Steem Price * 0.02) / Recent Claims
8. Comparing Vote Value with Known Calculators for Authenticity of Method
There is a major online service, that provides the calculator function to check the vote value. I will compare my results to it to check and verify my method of calculating vote value.
The service is steemnow.com. Go to the link and write yor username. Check the voting power as highlighted in screenshot below and check the vote value in top right corner. This is 0.11$ which is accurate with the method i have mentioned above. You can use the calculator function to calculate your vote values at different settings of VP and Vote Worth. The screenshots are attached below:-
for 63% VP, My vote value is:-
for 63% VP and 50% Vote Weight, my vote value is:-
These findings are in-line with my method to calculate vote values manually.
Factors Affecting Vote Value
Anyone with Maths background, will have no trouble understanding factors affecting vote value since it is pretty much evident from the equation written in previous paragraph. However, i would still write it down in brief for the benefit of the entire steemit community.
As i have already mentioned the final equation to calculate vote value =
(Total Vests * 1,000,000 * Reward Pool Balance * Steem Price * 0.02) / Recent Claims
Anything that increases above the division sign will increase your vote value, anything that increases below the division sign will decrease your vote value.
Anything that decreases above the division sign will decrease your vote value and anything that decreases below division sign will increase your vote value.
Regardless of variables in equation, the most affecting factor in vote value is steem price. The higher the value of steem, the higher the value of vote will be.
In this post, i have successfully calculated the vote value to educate the masses on how vote value is being calculated behind the scenes. Of course no one needs to go through heavy iterations to check their vote value. You can always check that from the website https://steemnow.com without any hassle.
I am sure the readers have now become familiar with the concept of vote value calculation and in process, have learned about vests, reward pool and steem price as well..
Thumbnail image designed on canva tool with free background and rest of the images are screenshots taken from my phone
Special thanks to @vortac for his unflinching support to my blog
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