RE: Palnet Quick Tip: Hi-Ho The Cherry-O A Mining We will go.
So this is a maximum of 140k effective total miners competing for a maximum of 210k tokens per year, a floor of 1.5 PAL income per year assuming distribution normalizes to a uniform curve over time.
So you're selling miners for how much? Only 10 PAL each to be competitive with staking SP and leasing through dlease.io? Only 8 PAL each to be competitive with delegations to @tipu or @steembasicincome?
Oh, but the maximum number of miners issues hasn't been reached yet, so rewards are artificially high now, but will drop over time as the maximum is approached.
Tell me again how this is a long term investment?
Edit, just realized I calculated floor return using Max instead of min, and actual for is <1 PAL per year several years in before going up again. Point still stands... Your staking apr is benchmarked against other dpos staking systems, not against steem returns, which are high because of steem existential risks.
Your pricing implicitly assumes that PAL has less than 1/3 the long term price risk that STEEM had. So you really believe that?
Would love to see a reply @swelker101. I'm by no means an expert here, but @josephsavage has a point. Or are we missing something?
I'm wondering why this has not been addressed yet. We need clearer explanations before making this so called long term investments..
I've been beating this drum in the discord for the past week. The numbers just don't make sense.
"It's a long term investment"
It's nowhere near the long term investment as buying the same stake in PAL and curating.
Here's a pretty chart for you:
PAL has 10% inflation and 10% of that goes to the so-called 'miners'.
So each year 1% of $2146081 ($21460) is going to miners valued at $1556483, for an expected annual return of 1.38%
Now, PALM and PALMM are expected to have a price ceiling, while PAL is expected to appreciate, so the actual expected return is higher... but if your real return comes from PAL price appreciation, why not just buy PAL? Especially since curation returns are significantly higher than mining returns...
I really wish I could short into this market and help it get some real price discovery.
Especially when curating is returning 60% in PAL terms at the moment.
The logic behind this math doesn't work for a few reasons. First, the only thing with an intended cap is PALMM, not PALM. Second, the white paper didn't assume or imply anything other than 10% of inflation would be split among the miners, that there was a hard limit on how many PALMM would exist, and it set the price for the miners. Third, it assumes that people are going to continue buying them to the point that they are no longer worthwhile, which is subjective to each person.
A quick search of "mining rig" on Ebay will show that there are plenty of people that bought or built hardware mining rigs and didn't think the ROI was worthwhile so they dumped them. These tokenized contracts are no different, except they don't require the knowledge to run a miner or have electricity fees.
The white paper set a basic price for the miners and if people want to pay that then they can, just like they can sell them for .000001 STEEMP cheaper than the set price that is locked into the white paper if they no longer want them. The free market is fully intended to take care of itself and this example is no different.
If people think the ROI sucks, then they should either not buy them or sell them. If people want to take advantage of inflated rewards because there isn't much competition, then they are free to do so. It's all voluntary and ultimately some people will speculate more heavily than others and some don't mind waiting years for a possible ROI.
Everything you just said adds up to "PALMM was deliberately sold at a low ROI because the market will bear the price."
Which is fine, that's your business.
Just don't pretend it's such a great long term investment when apr is predicted to fall over time unless the market corrects the price and somebody dumps their units at heavy discount.