Steem: The Ultimate Compounding Machine

in #busy5 years ago

Albert Einstein is credited with calling compound interest the "8th Wonder of the World".

If we drop the interest part of it, we find the value in what people see with compounding. In fact, Steem is now turning into the ultimate compounding machine. People are starting to get paid on here in so many different ways it is amazing. This will only continue.

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Let us dive right in and see what takes place on here.

STEEM and SBD

On comments and posts, we have the potential to earn both STEEM and SBD. These are paid out after 7 days based upon the upvotes that a post/comment received.

Inflation Through Powering Up

When one received STEEM and SBD, there is the option of turning that into Steem Power. One of the major benefits of SP is that is allows people to share in the inflation rate of the token. At present, it is roughly 8.5%. That means that any STEEM that is "invested" in the network via powering up will grow at a percentage of the inflation rate.

Curation

Another advantage of powering up is that it allows one to earn more through curation. Curation is what is received through our upvotes. When we upvote a post or comment, the breakdown is 25% to the curators with 75% going to the author. The larger one's stake in SP, the more the vote is worth. This has a direct impact on the curation dollars received.

Delegation

Once again, the value of Steem Power. When one has SP, he or she can delegate it to another. This can create a return in the form of leasing/renting, reciprocal upvotes, or SMTs. It is through letting other people use our SP that we can earn even more.

One area we see this is when delegating to an application. Often, part of the incentive to delegate will be a payout in either STEEM or SBD. This is usually paid on a weekly basis.

Application Upvote

At the same time, depending upon the application, when using it, we will often receive an upvote from the main application account. This is true for Busy.org, @actifit, @dlike, @dtube, and @steemhunt. The upvotes might be given to comments or posts, depending upon the application.

Other Tokens

Tying this into delegation, many of the applications that announced their own SMTs are paying out their native tokens in return for delegation of SP. This is another way our SP can compound. Not only do we receive some payment in the form of STEEM/SBD but also a third token.

Even without delegation, using an application often means rewards in the form of the native application. We are seeing some application gain the notoriety which means the native coins could have immense value at some point.

Another form of SMT distribution is via an "ICO". This is being employed by @dlux-io. The application is accepting donations in the form of STEEM. This places one in the pool to receive dlux coins. The payout is based upon the amount of STEEM donated to that pool.

Bounties Airdrops

This is a subheading under Other Tokens. Many of the applications are in the process of trying to get as tokens out to as many different users as possible. For this reason, they are doing airdrops or creating rewards based upon promotion. Write an article, put together a video, or promote on other social media sites all can earn one the native coins from these applications.

Now is where the fun starts.

As we see more applications emerge, one will be able to earn more tokens. Each application is going to see out users and the best place to start is with those already here. Hence, present Steemians have the opportunity to be early adopters for many different applications.

Another vital factor is that each application, once the SMT protocol is released, effectively becomes a mini-Steem. Thus, all that I listed as pertaining to STEEM will also apply to the SMTs. Each has the ability to pay out using three different coins. Thus, @steemhunt could opt to pay out in Hunt, STEEM, and HBD (Hunt Backed Dollars).

We also should have the ability to power up different tokens and share in the inflation rate. Delegation of powered tokens will enable one to create a return just like was mentioned for Steem Power.

Finally, since all tokens created on the blockchain using the SMT protocol will be paired with STEEM, we will see the ability to swap tokens in whatever manner is desirable. If people feel that STEEM is more valuable, one can use the SMTs to increase his/her holding of that coin. At the same time, if one is getting paid some STEEM but prefers an app's native coin, one could power up using that.

This is quite a list and it keeps getting longer. Over time, activity builds upon itself to further reward users. That is the power of compounding and it is all over the Steem blockchain.


If you found this article informative, please give an upvote and resteem.

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That means that any STEEM that is "invested" in the network via powering up will grow at a percentage of the inflation rate.

No. 15% of the total inflation, which is 8.7% annually at this time, is given to SP holders. 15% of 8.7% is 1.3%, which is how much you directly benefit from powering up as opposed to keeping your STEEM in liquid form in a year. But much more importantly, only powered up STEEM allows one to vote on rewards.

That is exactly what I said. STEEM powered up will grow at a percentage of the inflation rate.

8.7% or 1.3% annually?

The total inflation rate is about 8.7%. As was show in the above comment, the SP holders get paid 15% of that.

@taskmaster4450 The Reason I am on Steemit is for all of the things you mentioned in this Post. You get out of Steemit what ever efforts you put into to the platform. Yes, there are so many ways to Earn and in my Opinion we are already here so Early On that we are going to be HUGE Beneficiaries of all that is STEEM........

It is truly amazing the ways that DApps have provided us to engage and be rewarded as they continue to expand the ecosystem. I have begun to lose track of all the SP I am earnings given how my stake has increased. I remember getting 1-2 SP every week or so and now I am seeing this almost everyday! It has a lot to due with the stake but also the way I know engage with many communities through their @DApps.

Another word for compounding is inflation. Be careful what you're selling.

Awesome. When you look at it like this, you definitely realize what you're getting into. I never saw all of this until you pointed it all out. Thanks. More reasons for me to stay here for the long term.

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Awesome. When you look at it like this, you definitely realize what you're getting into. I never saw all of this until you pointed it all out. Thanks. More reasons for me to stay here for the long term.

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This post has been found valuable and upvoted by El surtidor

This was very informative. Thanks for sharing.

Waoh, this is truly amazing and the breakdown of steem compounding interest is truly worthy of sharing, I've resteemed it already.
But my main concern is the incessant copycats of steem source code, isn't that suppose to be a concern to steem ecosystem. If steem stands against plagiarism and some guys are out there doing the same to our ecosystem, there should be a way to curb them.

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This is why I love Steem Power. The more you have of it, the more you earn!

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But the more steem power increases, the less each steem power is worth!

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