Vests-Ai explation

I have been asked recently what VESTS are and while I did various searches on Hive to find a way to explain, the best explanation I found was when I asked Gemini Ai.

This helped me understand better and I wanted to share it here. Hope it answers any questions you have.

Since I didn't write this, I am declining rewards, so please don't vote. If you see any incorrect information please correct in comments.

In the context of the Hive blockchain, Vests (often called "Vesting Shares") are the fundamental internal unit used to measure a user's influence and stake in the network.
​While you usually see your balance displayed as Hive Power (HP), the blockchain itself records that stake as Vests.
​1. The Relationship: Vests vs. Hive Power
​Think of Vests as shares in a company and Hive Power as the dollar value of those shares.
​Vests: The technical unit that never changes unless you "Power Up" (buy more shares) or "Power Down" (sell your shares).
​Hive Power: A user-friendly representation of those Vests. It tells you how much HIVE your Vests are currently worth if you were to unstake them.
​2. Why does the conversion change?
​The ratio of Hive Power to Vests is not fixed; it increases over time due to network inflation.
​When new HIVE is created, a portion is distributed to everyone holding Vests (Hive Power).
​Because the total amount of HIVE in the "vesting fund" grows while the number of Vests stays the same, each Vest becomes worth more HIVE over time. This is essentially how you earn passive interest on your staked Hive

3. What do Vests actually do?
   ​Your Vests determine your "weight" in three key areas:
   ​Voting Power: The more Vests you have, the more rewards you distribute when you upvote a post or comment.
   ​Governance: Vests represent your "vote" for Witnesses (the people who run the network) and for Hive Fund proposals.
   ​Resource Credits (RC): Vests generate the "bandwidth" you need to transact on the blockchain (posting, commenting, transferring) without paying gas fees.
   ​4. Moving between HIVE and Vests
   ​Powering Up: When you "Power Up" liquid HIVE, you are buying Vests at the current exchange rate. This happens instantly.
   ​Powering Down: When you want your HIVE back, you "Power Down." The blockchain converts your Vests back into liquid HIVE in 13 equal weekly installments.
   ​Calculation Note: If you are looking at raw blockchain data, you might see a number like 1,000,000 VESTS. To see what that is in HIVE, developers use a "Hive Per MVests" (Million Vests) ratio found in the network's global properties