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Steem is produced to pay posters and voters. The blockchain tallies votes for each of the posts and allocates a portion of its reward fund to each of the posts with positive votes and to the voters who submitted those votes. When the rewards are being distributed, the blockchain converts the Steem to Steem Power, which gives recipients more voting power and influence, and issues Steem Dollars. The Steem Dollar is designed to always represent about five percent of the Steem market cap. If price fluctuations cause the Steem Dollar to represent more than five percent, the blockchain will rebalance by using its core algorithms.

Steem allocates rewards at a set rate with specific rules. In the eyes of the contributors, Steem rewards are distributed daily to posters and voters who participated in creating or finding positive content. The most highly ranked posts earn the largest rewards. Steem rewards are allocated as 50 percent Steem Dollars (SMD) and 50 percent Steem Power (SP).

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