Why are Steemit Rewards Currently 100% in SBD?

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Hello steemians,

Many Steemians often find the topic of reward distribution between SBD and STEEM confusing, especially when changes arise in the blockchain's printing mechanics, debt-to-ownership ratio, a key factor in determining how rewards are distributed, may seem complex at first glance, this post aims to shed some light on this mechanism, resolve common misunderstandings and provide a clear explanation of why rewards are currently printed 100% in SBD, in including this concept, Steemians can better navigate and take advantage of the Steemit ecosystem.

Context of the Debt-Property Ratio

The debt-to-ownership ratio is a key tool used by the Steemit blockchain to manage the proportion of rewards distributed in the form of STEEM or SBD, this ratio measures the proportion of the market capitalization of the SBD by compared to the virtual capitalization of STEEM.

Currently, this ratio is below the critical threshold of 10%, which allows the blockchain to print 100% SBD rewards for authors.

Current Debt-Property Ratio Calculation

Here is recent data from SteemWorld:

• Market capitalization of STEEM:

• SBD market capitalization:

With a ratio below 9%, the system prints 100% of rewards in SBD for authors.

Debt-to-Equity Ratio Dynamics

The debt-to-equity ratio is directly influenced by:

1. STEEM Market Cap: When STEEM price increases, the market cap increases, thus reducing the debt-to-equity ratio.

2. SBD Market Cap: When more SBD is printed or when SBD price increases, the market cap of SBD increases, which could potentially increase the ratio.

Reward Issuance Rules

The Steemit blockchain follows a clear logic for distributing rewards based on the debt-to-ownership ratio:

• If the ratio is below 9%: Rewards are printed at 100% SBD.
• Between 9% and 10%: The SBD printing rate gradually decreases.
• Beyond 10%: SBD printing stops completely, and cash rewards are distributed in STEEM.

Source

Current Benefits for Authors

With 100% SBD printing, authors benefit from:

1. Increased liquidity: The SBD is directly exchangeable and indexed to the dollar, providing greater financial stability.
2. Better valuation of rewards: The high price of SBD compared to STEEM ensures a higher reward for content creators.

Conclusion:

Source

The current situation, where rewards are distributed entirely in SBD, reflects a healthy debt-to-ownership ratio, below 9%, this shows that the Steemit blockchain is in a phase of economic stability, favoring creators with liquid and stable rewards and To maintain this trend, it is crucial to continue to monitor the evolution of the debt-to-ownership ratio and encourage practices that promote growth in STEEM value.

Best Regards,
@kouba01