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RE: The first phase of the Steem FAQ and Wikee: Consolidation of Knowledge

in #steem8 years ago

I've been googling the semantics over the word "interest" and it is more commonly associated with lending and borrowing (or deposits). Thing is, there is a "growth" but I don't know any other word that closely approximates this concept other than interest. It is definitely not ROI since dilution is running faster... I don't know what else to call it.

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I think the correct term is 'dividend'. Stocks and bonds both have these, after prescribed periods periods or they can be announced out of the blue, when a company is doing well and wants to encourage buying pressure on their stocks. So, these additions to your SP should be called 'dividends'. But by the same token, interest payments work the same way. In margin lending facilities at exchanges, you get regular payments on every loan as it matures from the funds you place on deposit. So it's similar to that as well, basically like a term deposit.

It's best to explain the mechanism behind Steem Power. It's really unclear if you don't know how it exactly works.

SP is actually VESTS. A vest is like a share of a pool of money. When you power up, you buy those shares. You don't get any interest in a sense that you'll get more vests.

Instead the value of those vests will go up because the pool of money will grow bigger over time. total_vesting_fund_steemshows how much steem is on that pool of money. total_vesting_sharesshows how many shares exist.

I think it might been a little mistake to talk about Steem Power as steems and not as vests. Of course it is easier for average user when they don't have to know about vests, but it makes the system harder to understand if somebody really wants to.