When Would I 100% Power up A Post?
So I’ve noticed a lot of people from time to time do 100% power up even more so when we seem to get a major dip or there no longer is that 1:1 exchange ratio. I find it rather interesting when a dolphin size accounts are doing something that I am not. I’ve learned a lot from many that size so I start to wonder.
What am I not understanding?
So I went into the FAQ to double check my understanding of a few things.
- Steemit system has pegged SBD to $1 (1)
- Steem value displayed is based on 3.5 day Steem average price (1)
- 50/50 50% Steem 50% SBD (1)
- Voting activity affects potential payout (1)
- No mentions of a time-traveling cat (I’m safe)
So I looked at two recent blog payouts of mine about a day ago:
E1: 2.692 SBD and 0.470 SP authored $5.39 reward
E2 1.442 SBD, and 0.252 SP authored $2.89 reward
I know--- numbers. Omg numbers. Go to your happy place in this happy tree forest. I just hope there are enough trees to see you to the end. There a special gift all the way towards the end of all the boring numbers, tables, false logic, and bad dry humor tossed into the mix.
Confusion
I think I understand the confusion. People are assuming if their author reward says $5.39 that was the present market value at the time of payout. Or maybe they assume that’s how much Steem they are getting so who in their right mind would not 100% powerup (a whopping 5.39SP!!! OMG I’m buying me a bag of shiny toys to play with.) Just maybe they think the 1:1 exchange ratio won’t hold much longer and therefore it’s somehow better to just go 100%?
As far as I understand those are false. Steem price is valued on 3.5 average price and how much you get depends on vote activity. Even that is wrong because hey I did 50/50, not 100%! While this number is important it seems to be confusing people. That $ sign in it is rather confusing. We might as well make up our own symbol and say I earned 5.39 time traveling cats for as much confusion it is giving people. Those sound more fun to breed anyways.
Numbers not them again
Let’s assume I am a very lazy cat. I woke up and noticed the market crashed and oh no I did 50/50 rewards and I’m still holding onto my SBD.
Now I could go pull the 3.5-day price average and disregard we just had a market crash. But I’m a cat. I’m lazy. It’s a Wednesday-- I’m lonely. Well I have further desire to keep using present value anyways (in a way that should send some statisticians off a cliff!)
Based on similar numbers what would my present value be if I 100% power up those blogs instead in cash vaule?
What kind of fringe lunatic would want to go that route! So glad I did not. Unless cats are very bad at math (ok I might be) and 10.379 is not > 3.046
But wait for a moment I’m a lazy cat maybe I fell asleep at the keyboard before exchanging my precious –SBD (WHY YOU LOOKING AT MINE.) What happened if the SBD just went before I could exchange it? How bad in actual dollar figures would it have been overall on what that blog was worth?
While I would have made much less if SBD crashed further it would have to slip a long way down. I am really starting to like this 3.5-day average and its crazed brother SBD. It’s like breaking the rules no wonder so many people are trying force it back down to its peg. SBD must be a pirate and they want to give him a wooden peg!
My furry little brain is not happy with just this. I like thinking extremes.
Thank god current price of Steem did not jump compared to what it currently is at while I was taking that nap. Why I would have lost a cent in value or even more if I had not gone 100% power up and not exchanged SBD in time!
Just saying what if I had won the SBD lottery. Like holy cat turds. I feel asleep and I woke up and I hit the jackpot I’m still holding onto some SBD!!!
What if some funky things happened to markets before I could exchange?
Really begs the question. If SBD being overpriced is so bad and people are doing all kinds of things to crash it. Why is there no 100% SBD post option to naturally allow the markets to bring it back down? SBD is quite overpowered you are hard pressed to be in a losing situation if you are 50/50.
Naturally there are some holes in my logic. I am allowing passage of time in these numbers, and it takes 13 weeks to pull out all that phat as a cat Steem. I was more interested in understanding how a short passage of time and my choice in how to be reward panned out. How far would things have to go for it to be the worse choice.
So when would 100% power up make sense?
As far as I can think when SBD is less than 1$ AND drops below 1:1 trade ratio. Maybe if I’m expecting during the time the post is open that Steem price will outpacing the gains of getting sbd compared to the potential of Steem gained. Otherwise, that 50/50 in lieu of $1 peg is a rather scary and powerful thing.
This is a hard one. It almost seems like if you have no idea and don't have a time traveling machine going 50/50 is just the safer bet so long as SBD is above peg and Steem has a fair amount of value to it to reward even more SBD.
Googly-Eyes-Fish-Hamburger
Now what you really been waiting for the reward!!
Information
Written by @enjar
Some baseline numbers were pulled this morning from https://coinmarketcap.com/ for Steem and SBD prices.
I'm gonna have to read this 3 more times. Really appreciate your help and tips
You always do your best on each post to let us know what is going on. I know I will get the latest and the most informed info from you.
Thanks, have a wonderful day :)
yissssss... really that's the only thing I wanted.
aint nobody got time for tables and numbers!
hehe I was thinking I would go comment it to you. I guess I was wrong and you found it on your own :)
I could smell it for miles :P
I could be completely wrong, but from my understanding until the value of SBD goes back to $1 you want to do 50/50. It's the fact that SBD is worth more than it's actual value ($1) that causes people to loose out if they 100% power up.
actually it works like this:
you get your reward in RShares - under 50/ 50 half will be converted to SP (Vests) directly to your account, half will be converted to SBD.
The conversion to SBD happens on the basis of the STEEM-FIAT$ Value which is broadcatsed by the witnesses and under the presumption that 1SBD is exactly 1FIAT$.
For example: If Steem is valued 4$ and your post payout is shown at 10$ (ignoring curation here)
So technically, as long as the witnesses broadcast a STEEM value higher than 1$ - 50/50 is the more profitable option.
An outlier scenario would be one where the market value of SBD to STEEM negates the above effects. So if you were in a situation where these 5SBD will not be enough to buy 1.25SP on the market.
This means whenever the open market fiat value of SBD goes below 1$, you should pick 100%SP also. Even if STEEM is valued above 1$.
@dan-atstarlite made great video that explains it all quite well here:
https://steemit.com/inflation/@dan-atstarlite/how-steem-s-inflation-works
now back to #GooglyEyes
Hello, @enjar the time-travelling cat. Can I call you Kitty? Here, kitty kitty. Kitty cat.
You aren't the first person to call for 100% SBD payouts. I have a theory on why we don't (and probably shouldn't) allow it.
Forcing authors to accept at least 50% of their rewards as STEEM POWER causes them to have a stake in the platform whether they like it or not, for at least 13 weeks, and probably as long as they continue to provide content for the STEEM blockchain. Therefore, they are incentivised to act in a manner that improves their investment.
Honestly, it's not too far-fetched to think that because of the high SBD price, the real percentage has grown low enough to no longer be effective. This would explain a lot about some folks' behaviour here in recent times.
I agree that the dollar sign is confusing as hell. Someone should write a browser extension that replaces the payout with an estimate of actual value in STEEM POWER and USD.
What do you think?
I tend to use this site I’ve not found anything close to it that gives such detail. http://steem.supply/
As far as SBD not being 100% options I suspected there are a few reasons keeping it from being as well. Mainly the fact that they want keep that $1 peg in place as that is how our ecosystems works. So naturally people would not have much fear of destroying it even further to try and force the system to readjust it to $1. Also I don’t think there is capon how much SBD can be created unless I’m wrong. So that would create quite an exploitable opportunity. Perhaps that explains our current issues and why it should over a very long amount of time fix itself.
I’m sure there are other reasons as well. Makes you wonder if just from an economics standpoint that it could be something they enable or disable according to witness price feeds or some kind of mechanic. But that would also create opportunity for those willing to risk a lot to influence the market in such a way to try and profit form it as well.
OK first things first what caught my eye and distracted me was the googlyeyesfishhanburger LOL
but back to the main point of your post, and when you try and look at all the math it does get confusing, I did a similar project working through the math recently and came to a similar conclusion as you for now 50/50 seems the best option to me
I just could not work out if there was some kind of outlier that would make a case for 100% power up being used in our current market conditions.
It’s interesting when looking at the numbers how strong SBD plays a role in everything.
Still people choose to go 100% power up. Sometimes it’s just best to make sure you are not overlooking something major.
yes I think we need you have the options n and control in our hands
Thank you for your very logical explanation. In the beginning of my steam career I went 100% steem and learned of my error. I will stick with 50/50.
Another thing you keep in mind is author rewards vs curation rewards.
This post has been deemed resteem & upvote worthy by your friendly @eastcoaststeem ran by Steemian @chelsea88
Great post tnx for sharing I just upvote check out my post steemit all the way
Bad comment. Shoddy workmanship, it can’t stand on its own. Poor quality, respective, not memorable. I give it a -10 trillion time traveling cats out of 10.
lol