Originally, I wanted to draw some more charts about the horrible free fall of Steem and Steem-Engine tokens, but then I visited the pages of Peakmonsters and Steemmonsters and noticed something. The fee of “listing”, to sell cards on these pages is five percent. Do you know how much this is?
Interest of years in a moment
That is the yield of 2-3 years in US government bonds. I, for example, pay 0.25 percent fee for online trading of traditional stocks, certificates and ETFs (at least over 1500 EUR or so). Selling Steemmonsters cards is 20x (twenty times) more expensive. Steem-Engine applies a one percent fee if you deposit or withdraw funds. (but if you invest, calculate with two. If you deposit it you also may want to withdraw it one day.)
(Wishful pricing? Photo of the Peakmonsters page)
Who said, “cryptocurrencies are cheap, very effective”, “Steem system has no fees”, “cryptocurrencies will kill the middlemen” and so on? I can’t remember. It’s not the first time I’m complaining about high fees, margins, and other costs, you can also read my previous post here.)
When are the margins high?
OK, I stop complaining about fees. Let’s see the other large issue, the margins. Margins – the difference between selling and buying offers – in stock exchanges, crypto-exchanges, and other markets are mostly high if:
- The product is very risky.
- The buyers and sellers are very scarce, volumes are very low.
- There is only one market-maker in some monopolistic position and this player wants to earn a lot.
And by Steem-Engine tokens, the margins are high like hell. Or, most of them. The tokens are very “illiquid” assets, that means, it is hard to convert them into cash. Very hard. Some of them, almost impossible. At least if you possess some more worth than a couple of STEEM coins.
30 percent margin?
Let’s see my table, it was a very boring job, and the result is a lot of dry numbers, I know. What means this big table here? The average margin of Steem-Engine tokens, if you want to sell or by at least 50 STEEM at once, is almost 30 percent.
A margin of 33 percent means I can sell it at 2 and I can buy it at 3 units. Or, 100 and 150, for example. A huge gap, means a big loss, in reality. Imagine you earn 10 percent on curating (what is a very good yield nowadays), with a lot of effort and work, and lose it all on the margins, when you have to sell it. “Normal” investments, like stocks, bonds, exchange-traded funds (ETFs), etc., have often only 0,01-0,1 percent of margin in the stock exchanges. In worst case, 0,2-0,5 percent. A fraction of what we have here.
What can we do? Tribe’s founders, whales, and other risk-lover investors could be more active, buy and sell more tokens, also be “market makers”. (making prices for profit, to gain the margin difference in the prices.) It can be a good business.
Another solution is if we didn’t have 450 different tokens in the future, only 6-10 (but serious ones). The market would be more concentrated, more liquid. More people trading means more possibility to cash out at reasonable prices. Without huge losses. I hope the small market slowly evolves to this direction.
A mug of beer
Why at least 50 STEEM? That is approximately 11 USD now. A mug or at best two mugs of beer in a bar in most developed countries. Not very much money. Even smaller offers I find unserious. Even if I know some people are happy with some cents.
(I analyzed the tokens appearing today on the “Market” page of Steem-Engine.com. But I eliminated some extremely illiquid tokens like NGAMM, MINID, LASSECASH, NGA. By them, the market seems to be non-existent.)
Series Steem-Engine tokens reports
About the data:
I’m collecting all token prices from July the 7th on, once a day, approximately at 4-5 p. m. UTC (Coordinated Universal Time). I’m not a robot or developer and I’m not always online, so some delays can happen. The data is so more estimation than an exact recording. Data on July 9 and 15 are completely missing. If somebody knows how to regain this information more precisely from the blockchain please message me.)
(Photo: Pixabay.com, with an extra effect)