Understanding how Reward.app works

@reward.app has been around for a few months and recently there's been discussion on the OCD Discord server about it's application, particularly with regards to the communities tha OCD support under the Community Incubation Programme. You can find out more about it in this post if you're interested.

What's reward.app?

Normally 50% author rewards will be paid out in half staked HP and half liquid Hive/HBD. Reward.app does two things:

1. It converts your staked HP author rewards and gives it back to you in liquid Hive/HBD
2. It can help you distribute some of your author rewards to curators if you want to reward them with more than the standard curator payout

For all this to work, you have to set your post beneficiary rewards to reward.app, they will do the magic for a 1% service fee.

Assuming you use the default option in reward.app, which is setting 100% of your author rewards to reward.app as beneficiary, and giving 4% of that to curators, this is how the post payout will look like on the right hand side. If you use reward.app, you (the author) will get 47.52% in liquid payout instead of 50% half staked/half liquid. You get less because you have chosen to give additional rewards to curators and paid a service fee to do this.

There are various reasons why people want to use reward.app to do this. Most want to liquidise their payout immediately instead of waiting 13 weeks to power down. Others want to rewards their curators more because they're a nice person (yes we have plenty of them on Hive). And I'm sure there are many other reasons besides these two.

Using reward.app in the communities

_{Disclaimer : I don't represent OCD, the Community Incubation Programme or @acidyo.}

Another reason to use reward.app is based on a recent discussion on the OCD Discord. @acidyo said he would like to see more engagement within communities. One way to do that is for communities to use reward.app to build up their liquid funds. The liquid funds could be used to tip community users to encourage more engagemnt or tip posts that are good but not quite good enough to be nominated under the Community Incubation Program. Communities can also use the liquid fund as contest prizes.

The suggested use of reward.app caused a bit of confusion for some community leaders who wasn't familiar with it. And then I realised I wasn't 100% sure on how it worked either. So I spoke to acid and @cardboard (he's the techie guy for the app) today to get to the bottom of it. Here's what I found out. Some of you may know it already, but if you don't, here's the very simple version.

1. Read the above section What's reward.app if you haven't yet
2. There are two variables in reward.app that you can change
3. First, how much of your author rewards you want to set to reward.app. The suggested default is 100%
4. Second, how much of your author rewards you want to distribute to curators via reward.app. The default is 4%

All you need to do is to change these two variables. Easy!!!

Example

Ok, maybe it isn't as simple as it sounds. I'll walk you through with an example and hopefully it'll make sense.

If you use the default options, the post payout looks like the middle column below. There is no change to the 50% curator portion, that's always paid out in the normal way. 100% of the author rewards is set to reward.app ie 50% of post payout. That 50% is paid as liquid Hive/HBD and is split between

1. 0.5% to reward.app service (it's 1% if you base it on the 50% author rewards)
2. 1.98% to curators. Curators get 4% on 50%, so $50 x 4% = $2, and $2 is 2% of $100, less 1% service fee on $2 = $1.98 = 1.98%
3. 47.52% to author. This is a little less than the normal 50% they would get as they've given 4% to curators and paid a service fee.

You can change either of these two variables, eg give more of your author rewards away (anything up to 100%) or keep all the liquid rewards for yourself (0%). Then you can send only part of your author rewards through reward.app to get liquid rewards, and keep the remaining paid out in 50/50 staked/liquid. I've played around with these variables in the last example in the table above. If you want to play around with it yourself to understand how reward.app works, you can do that in my reckoner below. Just change the % in the colour boxes.

https://docs.google.com/spreadsheets/d/1B3uhR7LYRw6fNet_xmUZAxuJE8Ei1zRez-esmHrfgDY/edit?usp=sharing

Hope this helps you to understand how reward.app works.

_{PS If you can see the rest of my Google Drive content, can you please let me know. You're not supposed to} 🙂