The Economics of Upvoting Your Own Post
Is up-voting your own post a good or a bad idea?
In this post I will examine two extreme cases; Minnows and Whales, Dolphins will be somewhere in between.
How can Whales throw Minnows a bone and at the same time strengthen their investment?
There has been some discussion in recent days on upvoting your own comments. This analysis is a discussion on upvoting your own posts rather than comments.
Minnows
For the majority of Steemians upvoting your own post is a good idea, it means you get a share of the curation rewards that are generated by votes on your post. So instead of getting 75% of the payout value you get more than 75%. Probably not a lot more but it depends on who votes for you.
Whales
For Whales on the other hand upvoting your own post makes little economic sense. Don't think value of post, think value of investment!
When a Whale upvotes his/her own post a few things happen.
- The Dollar value of the post increases. 1m Dollars of Steem Power gives about 400 Dollars from an upvote at time of writing.
- The post may make it to the trending page attracting other votes and more money. You "win" twice because you get both Author and Curation Rewards.
- The Author/Whale gets a bigger share of the posts curation rewards then if they had voted later. They get a bigger slice than just the 75% author payout.
Posting is not all about money
Without considering the Economics of the decision to upvote your own post the most direct negative effect is you get little feedback as to what is a good post and a bad post. All Whale posts with a self upvote will earn $$$$.
I am not a Whale but I have noticed this since the HF19 with my own posts. I upvote my own post then I use @randowhale to upvote more. Sure I am getting great payouts but little feedback on what works and what doesn't.
What if you didn't upvote your post at the start and let it grow organically at first and upvote later?
The most obvious thing is that Minnows will be more likely to upvote you. They would get a share of the curation from the $400 upvote you add later. It won't affect your payout materially but it could be a big deal for them.
You might even consider not voting for your post and letting the reward pool for the day/week be shared among other authors for the good of the system.
The Game
Before getting to the Economics of voting lets have a recap of an old post where @dan described the Game as he saw it, which I believe is still valid.
Curation is a game for whales and dolphins. Minnows are unlikely to earn any significant return on their votes. Minnows should stick to posting and commenting.
The Economics
Having considered some of the pros and cons of not self upvoting lets have a more detailed look at the economics from a Whales perspective. We will consider first "The Game" where a Whale is competing with Minnows for rewarding his own post and secondly the situation where the Whale is competing with other Whales for rewarding his own post.
The following analysis is based on the post HF19 view of rewards and how they are shared among curators with the following assumptions:
- Ignoring the Penalty for the first 30 minutes
- Only considering a simplistic scenario where there are 4 votes
- Ignoring Voting Power
- Assumes a Whale with a $1m investment gives $400 per per upvote
Whales vs Minnows
If the Whale is only competing with minnows for votes it doesn't matter when he/she votes. The effect on the whales payout is only marginal if he votes first or last, but there is a large impact on the minnows.
- If the Whale votes first the Minnows get nothing
- If the Whale votes later the Minnows get something meaningful
8 cents to a minnow can be a huge deal. Its nothing to a whale. On top of that Minnows can curate much more than a Whale can so if they were earning cents on lots of posts it would be significant for them and will improve the diversity and quality of the content on Steemit.
A Simple Voting Model
Payouts where the Whale doesn't upvote his post first, i.e. the Whale still upvotes but after the Minnows
| Voter 1 | Voter 2 | Voter 3 | Voter 4 | |
|---|---|---|---|---|
| Vote Value | 0.10 | 0.10 | 0.50 | 401.00 |
| Curation from Vote | 0.03 | 0.03 | 0.13 | 100.25 |
| Curation Allocation Vote 1 | 0.03 | 0.01 | 0.09 | 100.08 |
| Curation Allocation Vote 2 | 0.01 | 0.02 | 0.12 | |
| Curation Allocation Vote 3 | 0.02 | 0.02 | ||
| Curation Allocation Vote 4 | 0.02 | |||
| Total Curation Per Voter | 0.08 | 0.06 | 0.21 | 100.08 |
| Author Payout | 401.70 | |||
| Author Total Payout | 501.78 |
What if the Whale had voted first?
| Voter 1 | Voter 2 | Voter 3 | Voter 4 | |
|---|---|---|---|---|
| Vote Value | 401.00 | 0.10 | 0.10 | 0.50 |
| Curation from Vote | 100.25 | 0.03 | 0.03 | 0.13 |
| Curation Allocation Vote 1 | 100.25 | 0.00 | 0.00 | 0.00 |
| Curation Allocation Vote 2 | 0.00 | 0.00 | 0.00 | |
| Curation Allocation Vote 3 | 0.00 | 0.00 | ||
| Curation Allocation Vote 4 | 0.00 | |||
| Total Curation Per Voter | 100.25 | 0.00 | 0.00 | 0.00 |
| Author Payout | 401.70 | |||
| Author Total Payout | 501.95 | |||
| Benefit for Voting First | 0.17 |
Whales vs Whales
Now lets consider a slightly different scenario. In this second scenario we will see the payments are skewed a bit for the Whale. He loses out by not upvoting his own post first, but only 5% on the overall payout of the post.
Payouts where the Whale doesn't upvote his post first, i.e. the Whale still upvotes but after the other Whales
| Voter 1 | Voter 2 | Voter 3 | Voter 4 | |
|---|---|---|---|---|
| Vote Value | 400.00 | 400.00 | 400.00 | 401.00 |
| Curation from Vote | 100.00 | 100.00 | 100.00 | 100.25 |
| Curation Allocation Vote 1 | 100.00 | 50.00 | 33.33 | 25.11 |
| Curation Allocation Vote 2 | 0.01 | 0.01 | 0.03 | |
| Curation Allocation Vote 3 | 0.01 | 0.01 | ||
| Curation Allocation Vote 4 | 0.01 | |||
| Total Curation Per Voter | 100.03 | 50.01 | 33.36 | 25.11 |
| Author Payout | 1,601.00 | |||
| Author Total Payout | 1,626.11 |
What if the Whale had voted first?
| Voter 1 | Voter 2 | Voter 3 | Voter 4 | |
|---|---|---|---|---|
| Vote Value | 401.00 | 400.00 | 400.00 | 400.00 |
| Curation from Vote | 100.25 | 100.00 | 100.00 | 100.00 |
| Curation Allocation Vote 1 | 100.25 | 49.94 | 33.31 | 24.98 |
| Curation Allocation Vote 2 | 0.01 | 0.01 | 0.03 | |
| Curation Allocation Vote 3 | 0.01 | 0.01 | ||
| Curation Allocation Vote 4 | 0.01 | |||
| Total Curation Per Voter | 100.28 | 49.95 | 33.34 | 24.98 |
| Author Payout | 1,601.00 | |||
| Author Total Payout | 1,701.28 | |||
| Benefit for Voting First | 75.17 |
In reality would Whales be competing with Minnows or Whales?
If Whales just voted for each other Steemit wouldn't last very long. The Economic Value of the platform would quickly evaporate and Steemit would become little more than a Ponzy Scheme.
Conclusion
So the battle between Whales for curation rewards on their posts is really just a battle against the Minnows. In that case it doesn't matter Economically to the Whale if they upvote their own post initially or wait for a period to let other people get some curation rewards.
The Whale may even choose not to upvote it at all if they are really savvy investors.
The only "adverse" implication for the Whale is they will have less chance of making it to the trending page but that means that other content will organically make it to their instead. It also would lead to a diversification of content and authors on the platform. In Economic terms this is a much better use of a Whales capital than self upvoting their own post.
Remember the Whale I am talking about has 1m Dollars invested in Steemit. If the price of Steem goes up by 1 cent this guy makes about 5,000 dollars.
I have not provided analysis of the effect of Whale Bots. In the short term these could earn significant curation rewards however again I would propose this would not make much sense Economically. They would just be draining the platform of value and reducing the value of their overall investment.
References
Reading old posts can be confusing because often things have changed here on Steemit. We just had HF19! but the following list of references are invaluable to understand how the rewards are intended to work.
- https://steemit.com/steem/@dantheman/steem-whales-voting-perspective
- https://steemit.com/steem/@dantheman/curation-rewards-and-voting-incentive
- https://steemit.com/steem-help/@biophil/the-ultimate-guide-to-voting-power-with-cartoons-formulas-and-code-references
- https://steemit.com/steem/@tuck-fheman/how-is-voting-power-determined-in-steem
Thank you for reading this. I write on Steemit about Blockchain, Cryptocurrency, Travel and lots of random topics.
Images are from https://pixabay.com/.
I bought STEEM to vote for myself and few others. Where is the problem?
Dont see any problem each one do what he wants, invest can give you more so its really nice. I do it myself and will do more when i will gain power.
it's not so much of a problem for those who are whales, rather an exercise in applied cryptoecnomics.
The current system is a bit broken and it has allowed low quality content and shameless self promoters who are not contributing to the intended purpose of the system.
Most seem to be more concerned how they can maximize their rewards over the integrity of the content and interactions they are actually contributing.
It's understandable. You have to produce money to survive. You can't put a lot of effort into content and interactions that doesn't reward you.
I believe slow and steady wins the race and integrity shines through within the network, because other like minded people will follow and endorse your content the more thoughtful and genuine you are - it just tales a lot more effort and time than most people want to spin.
If people can cut corners, they will and especially if there is money on the line.
At that point, why not just start a spam blog for affiliate revenue and crank out churn and burn content for the lowest common denominator.
"I believe slow and steady wins the race and integrity shines through within the network, because other like minded people will follow and endorse your content the more thoughtful and genuine you are - it just takes a lot more effort and time than most people want to spin."
You nailed it.
I couldnt agree more
Resteemed, a very good article to post at a time when many people are looking for these exact answers. I learned a thing or two from reading this it will be interesting to see what kind of long term effects this hard fork will have on Steemit. Thanks for a great blog post @eroche
Yes bro this is a good article to resteem this broke down the payout down for me exactly how I wanted to learn it very easy to understand.
Thanks for the support @mallorcaman, HF19 has put a very different perspective on Steemit for me.
A really good article. I'm new to the platform but thanks to articles like this I'm starting to understand this fascinating world of Steemit a lot better.
He @all-life welcome to Steemit. There is a learning curve no doubt but feel free to ask any questions.
Thanks so much @eroche for both the vote and the kind welcome comment! :)
Great post! Especially like the detailed examples of different scenarios
Thanks so much.
Thanks for your great explanation @eroche. Now I understand I how it work. I tried to upvote after 30 minutes and made sure that I'm among the earliest upvoter for the posts that appear on 'hot' but earn nothing but I got some curation when I upvoted early on the post that only show a small pay out. Now I understand why... So I'll get nothing if I upvote a post that's already being upvoted by a whale or dolphin. Thanks again!
It's recommend commenting on posts and engaging with people, make some interesting observations and you may get lucrative upvotes.
When they even have it as feature pre-selected I don`t think it is a problem at all. I mean - lol... thats somehow even human (when they normally act like pigs) :)
Greetings!
:)
For most users though I think it is a fair default selection.
I always thought upvoting your own post was frowned upon?
So you are saying it's ok to upvote your own post, just choose when you upvote it?
If your a minnow your should definitely upvote your own post. You will get a bigger share of the payout, which depends on who votes for you.
If your a whale I think it makes more economic sense not to upvote your own posts, especially not immediately after you post it.
pls what is the difference between Minnows and Whale on steemit. i am new here.
It's just a term which people use to describe how much steem power they have. Small fish are minnows, big fish are the whales.
Def wish i could* resteem this!
Great article, helpful for newbs like myself...
Thanks so much, and welcome to Steemit by the way. I see you have just joined.
Thank you for this explanation! Definitely takes the mystery out of self-voting. I was unsure whether or not it was a good idea but your article clears things up nicely.
Great blog. Thanks