The fade doesn't only happen because of price of Steem. The fade also happens because the amount of Steem that can be given out to authors/curators is a set amount. As more posts are created/upvoted, the less your content is worth.
For example, lets assume you have 1 marble and you put in a jar. There are 99 other marbles so you own 1% of the marbles. As the week goes on, more marbles get added to the jar by other people...so your 1 marble is now worth less than 1%.
I haven't read the code, but as I understand it, new steem is being added to the rewards pool at basicaly the same rate that the curation rewards are being given out. Similarly, your marble analogy ignores the fact that 7-day old posts are aging out of the pool at roughly the same rate that new posts are being added.
Since the number of rshares allocated for your post is constant and the size of the pool is (roughly) constant, the reason that the post's award appears to change is almost entirely due to the fluctuating price of steem.
If the number of rshares suddenly increased dramatically, the value of all other posts would decrease significantly.
I haven't looked into the numbers, but this could be a factor as well.
For instance, if the @freedom account started using all of it's voting power, every post it voted on would be worth a ton, and every post it didn't vote on would see a huge decrease in its payout.
True. I was oversimplifying. But those sorts of changes will tend to average out over time. My main reason for commenting was just to note that that the pending reward value can drift up as well as down.
You may be right....but if you are then it means the payout fade will stop now that it's been over 7 days since HF.
The reason I don't agree w the the theory that it's only because of Steem price is that the price went up last few days...until last night.
This is actually incorrect. The system is always creating new STEEM.
This can be true, but only if the number of rshares being distributed increases from the level it was at.
Consider checking out this post of mine (past payout) where I go over this stuff in more detail: https://steemit.com/steemit/@shenanigator/the-ultimate-guide-to-steemit-payouts
Yes, the system is always creating more Steem, but it's creating that Steem at a set amount.
That's correct. So if rshares stay constant, the value of current posts isn't affected.
However, if more people start voting (or just 1 big whale), the number of rshares will increase and the value of non-paid posts will fall.
Agree with you. Maybe I was just not saying it clearly, but what I was trying to say you already said perfectly in your guide.
It can work the other way around too...
Let's say a post is currently worth $5. Over the next few days, new Steem is created, but only half as many people are voting compared to recent days. That means there's a lot of new Steem with nowhere to go, so it goes to the posts that already has votes - the ones with pending payouts. Now your $5 post may have increased to $6.
This isn't exactly how it works, but it's the simplest way I know how to explain it.
This is true on a 24 hour basis only, not weekly. If it were true weekly, every payout would shrink, even if the price of steem stayed constant.