A potentially useless post about SBD print rates, bidbots and stress
Just an eensy weensy post before I go to bed. It is almost 3 am so go easy.
It is getting interesting at the moment with the SBD printing rate at 9% now. What that means is (I am going to make this really simple so this may not be accurate but will give enough of a picture.
Firstly though, this is from @eonwarped who helped me out in discord with some questions. Thanks, mate.
Here is the formula to work out the debt:
(# sbd / (feedprice * # steem + # sbd)
which is:
15694269 / (1.16 x 273025961 + 15694269) = 0.0472 =
4.72% SBD : Steem Debt ratio
This is good because it means that http://Steemd.com is showing the right SBD print rate of 9%. But, http://steemreports.com/steem-sbd-info/ is not because it is using the SBD market cap for the calculation but the system is set to always see SBD as worth 1 dollar.
So, just to picture what this means inaccurately but close enough:
A 200 dollar post with payout set at 50/50 SP/Liquid would get paid:
100 Steem power
91 Steem liquid
9 SBD
What I find interesting now is that we potentially get a better picture of who are holders of Steem and, who are short termers, even if they have said otherwise.
All bidbots take SBD and most take Steem but, SBD and Steem are not created equal. The expectation is that Steem will be the one that has value long term while SBD will hopefully hover near its peg, which it hasn't been for quite a while now. As the print rate of SBD decreases and is close to being shut off completely, bidbot users must now make a decision as to whether they are willing to send Steem to the bots instead of SBD.
Sending Steem for many makes the venture much more risky as even though a loss on SBD will hurt now, because it is expected to stay near its peg, it isn't as likely to have an appreciating loss. Sending Steem and taking a loss now could become very expensive if the future price of Steem climbs, again as expected/hoped.
Perhaps it is just me that has this weird thing that selling Steem is harder than selling SBD as it is the Steem that has the application as the key to the pool. SBD and Steem might be similarly priced but, a thousand SBD has a vote of ecatly zero unless converted to Steem and powered up. 1000 Steem however no only carries a current vote but, a future vote also that increases with price.
From what I understand, this is a straight line calculation too.
At the current feed price of $1.16, 1000 SP today carries a 7 cent vote meaning ~70 cents a day (based on 10 votes) .
If, the price was $11.60 instead, that some 1000 SP carries a 70c or $7 dollars a day worth of votes.
Hypothetically for ease of calculation and imagination,
If we could use that 7 dollars all at once, and go 50/50, there would be 3,5 SBD and 3.5 worth of Steem = about 0.33 Steem paid out. Yeah, I am skipping curation.
So, each day at 11,60 Steem, an account could earn 3.50 in liquids. The average yearly salary in India is something like 700 dollars which is approximately, 2 dollars a day. 1000 Steem could almost double that number. However, to have access to that liquid Steem for voting, requires Powering Up. Of course, one can rely on the votes of others but, someone would need to power up and be willing to vote on the content. Those without Steem Power will be forced to always chase votes and, be at the mercy of others with Steem Power.
I find that as the SBD print rate approaches zero, people are going to have to make what for me would be a tough choice. Do I sell my Steem for SBD or use Steem to pay for bidbot votes or, do I hold and power up the Steem I have and hope that the price goes up.
What to do? What to do?
This is the game now and the question is whether the long-term thinker users of the bots believe enough that they will be able to earn more Steem using the bidbots than they have to send to them to get the votes out. With so much SBD being printed, it was much less of an issue but now as SBD becomes scarce, they will have to use some of what could get powered up instead which makes it at least feel , a lot more like moving money from one had to another without getting as much back in return since there is no overpriced SBD to buy Steem with.
For the short term thinkers, the margin is now much tighter for most of the bots as before their return included overpriced SBD. If they only get Steem back, is it worth them buying and, what happens if in the time after their bought vote, Steem drops again. The margins are getting thin for many.
Well, except for those large delegators who also use the bidbots as they get a lot of what they end back making their bought vote, much cheaper than others. However to be able to do that requires having Steem Power delegated out and, many don't have enough of it to make a significant difference in the price of purchase.
The drop in price however means that more Steem is paid back than before when price was up meaning that perhaps there will be more coming back than sent but, the reduction of SBD in the system complicates the decisions for vote buyers quite a lot perhaps. Maybe it doesn't, I have to think on it more too.
My actual point of this post was something completely different but, this one is getting too long as it is for what it is.
So to finish off, some questions:
- Does the reduction in SBD affect vote buyers
- Does it increase stress in the purchase if using Steem
- Are the margins much narrower and less stable when there is no overpriced SBD
- Does any of this matter at all or am I just too tired to think well
For me, it doesn't stress me much since I am a Steem holder and at the current prices, I have been earning quite a lot more Steem than I was before, even though my dollar values have dropped massively. There are short term and long term plays to be made though and I am hoping that I can continue going long and keep benefiting from those acting short.
Taraz
[ a Steem original ]
Ummm... yeah. Goodnight.
I used bots a fair bit before. In my experience, one would never buy a bid if the margin of return were so thin that you cared about a weekly price swing.
You look for bid bot purchases that are cheap, and bid.
You pay 1. For a 2 vote and so even after curations you are laughing whether steem and sbd have dipped on the week.
But more importantly: $11 Steem? Yes please. That would change my life significantly.
It is so cool that steem can change lives. Like with your hypothetical india example or look at Venuezela, or any struggling economy.
Who couldnt use extra income?
It hit 7.30ish at the last high so as I see it, the next large bull run will extend well past the trillion market cap which will hopefully put Steem closer to 10. Who knows but, Steem has a community, use case and is fast and free to transfer so slowly, investors might see the value.
Honestly I think the issue that is at hand right now has more to do with which one to hold for a run up then worrying about the bid bots. The play as I see it will be SBD as right now there is so little being printed that the price will spike much more drastically if a group decides to pump it. When everyone was getting massive amounts of SBD the pump still worked, picture now with very little being printed each day how quickly it could spike. At the very least I feel that we will see SBD at a higher price then steem in the near future due to the disparity in printing, but more likely we will see a major run up by a pump/dump group that will take advantage of the limited float for SBD.
I didn't mention the potential Spike in SBD prices. The bidbot owners have made a killing on the highs of it yet, it seems that many didn't buy Steem with it ;) There is only 15 million SBD in the marketplace and that is very easy to pump, as we have seen in the recent past. I have some SBD just in case because if it does happen to pump hard, and Steem lags, I will power up again, as I did last time.
I knew what you meant, just think the topic for discussion that might be really helpful to a lot of your readers is to understand the math of what you put forward in relation to the potential for SBD to spike and them to make some nice returns. When SBD is at, or below $1 on the markets it's a great time to pick some up with fiat and wait for the next pump which will happen IMO.
The bot owners make a killing no matter what it seems. Don't think that most people care one way or another if they are paying steem or SBD...maybe I'm wrong, but so many that are using bots aren't worried about anything other then pumping their next post and the liquid steem and SBD are just at tool to that.
My biggest concern right now is that I might not make 7 SBD before Friday to donate to the @adollaraday project - it really seems strange to be selling STEEM for SBD as usually my spare' STEEM goes into my savings for Steemfest or is powered up, the second being the most logical to me.
Thanks for simplifying the numbers, I may still need a coffee this morning to fully understand 😊
These posts help me (even if not completely accurate) get a better understanding of parts of the platform that are not familiar or comfortable for me. Learn by doing as they say :)
Yeah for sure. These 'inside parts' I don't tend to worry about, I have enough trouble finding a post each day at present.
None of it really matters, since Steem and SBD are very easily traded for each other in the amounts we're talking about on the internal market.
This is still a very complicated skill, but I definitely feel that way or I wouldn't be holding a big chunk of liquid Steem right now. Eventually the market will move back up again and I'll push a lot of it into votes and thereby SP.
I also expect that whenever HF20 actually comes it's going to reduce the price of leasing delegation significantly, so I might want to have some liquidity on hand for that.
I was hoping you would see this as you have thought long and hard about it.
The margins are lower though? Higher risk?
How many do you think will be worse off considering that many are already losing value?
Why would it? Do you have a post on it that I can read later?
Maybe. I think in terms of getting a huge fast pump SBD is more likely than Steem just because there's less of it. Plus there's a lot more downside risk in Steem, because the SBD haircut doesn't hit until the ratio is 10%. So it should be at or near $1 minimum for a while even if Steem falls farther. If all cryptos go up simultaneously, probably both Steem and SBD will go with them somewhat equally. I have a preference for holding liquid SBD over liquid Steem in the one-or-two months time scale but I keep thinking Steem is going to go back up to $1.30 and I'll be able to get a better trade.
@eonwarped has been working on this question, and probably has a better answer than I do.
I think that fixing the thing where immediate self-votes chained with late bot votes can return 1000% on the self-vote will remove some of the incentive for people to lease.
Ah do you mean looking at returns in aggregate where it comes to bid bots? Yeah I've been trying to figure out how to start actually, so for now I don't have anything :). Will keep you both posted though.
Thanks, it is 5 am here. will get to the comments later...
standing on the sideline I am cheering on long term attitude, Keep your STEEM, Power Up, spread the votes, the wealth and the joy. When steemit is worth $11 votes wont be worth what you have suggested because at that stage there will be so many more users on steem, the rewards pool will have to split a lot thinner to each of us.
This is true but, only based up stake right? So, if there is a million active users and the same people have stake now, and only share it amongst themselves? I know that this isn't the plan nor useful in the long term view but, as a hypothetical. My key point really isn't the numbers but the fact that in the future, it will be those with stake that have access to the pool, just like now except, the value of that stake is higher than now. An app with a vote of 100 will have a vote of 1000 and yes, there will be more people active but, will there be 10 times more people active at that point? Hard to right now. If however there are 20x more, then the value of steem power will be even greater.
Hahaha. From a simple 3 am post it turned out to be rather complex. This is interesting and very important to get to grips with. Maybe you can do another post about this over the coming weeks and try and simplify it for the not so smart ones. I have read it and some has sunken in but need to read it over again to fully understand.
With the less distribution of the SBD, selling of SBD will be challening because you can't accumulate it in lot like before.
So there is a benefit attached to community.
More STEEM means there is more power, you can give back more and if you need to withdraw - you need to wait for a long time. Which adds value back to the community.
As I see it - you can't be selfish in the long-term. The alternative is being generous.
The Steem paid in the 50/50 is not paid in SP, it is liquid so available immediately.
.....just a eensy weensy post?
The impression of size is relative. Luckily my wife has small hands.
hummmm...so much I could do with that comment but I think I'd better dunk for cover.
I am so grateful there are others in this community that understand some the mathematics behind a lot of this and can explain it in terms that make it easier to understand. Thank for @tarazkp and @eonwarped and everyone else who takes time and effort to help the rest of us out.
@eonwarped @abh12345 @paulag @miniature-tiger and some who appear in there comments sections are good people to follow to get better understandings of the system. I learn from them.
Thanks for the suggestions, I added them to my feed. I hope to gain a better understanding of how this whole crypto/ Steam system works.
@tarazkp you focused on the true nature of steemit. bidbot users must now make a decision as to whether they are willing to send Steem to the bots instead of SBD. As SBD is decreasing day by day.thanks for sharing such good content.