What Is The REAL Market Cap of Steem?

in steem •  3 years ago

The crypto-currency market cap sites are showing Steem as the #3 crypto by market cap.

It's been a source of pride and excitement to watch Steem climb the charts and challenge some of the more established cryptos.

But there is reason to question the accuracy of the figures being reported. They appear to be much higher than I would expect, given the amount of liquid STEEM in circulation.

Both http://coinmarketcap.com/ and https://coincap.io/ are showing an available supply of 90,707,969.

This data is clearly dated. The current figures as reported by http://steemd.com/ at the time of writing are:

The current_supply is 107,485,075.307

However, the bulk of the supply is Powered Up...

current_supply minus total_vesting_fund_steem should give us the amount of Steem that is in a liquid state, available to be traded.

107,485,075.307 - 104,758,077.898 = 2,726,997.409

So 2.7M STEEM is sloshing around in a form that could be sold on an exchange.

Plus there is another 807,505.715 SBD, which represents

feed_price: base 3.703 SBD quote 1.000 STEEM

...about another 218k STEEM.

For a total of 3 Million available. That's less than a $12,000,000 market cap of liquid Steem.

But there is another consideration...

The Worth of Steem Power

There is a much harder thing to quantify, and that's the actual value of Powered Up Steem. The vast majority of Steem users have opted to invest long term, which could mean a few different things.

They...

  • have faith in the platform
  • see the potential for growth
  • think the market undervalues STEEM
  • enjoy using Steemit
  • never bought STEEM and earned it as SP

Or maybe something else entirely...

This makes is almost impossible to quantify. It's clear that Steemit users value Steem Power a lot. But it's subjective and based on a wide range of expectations, hopes, and fears.

Is that worth $325 million? Could it be worth more? It's a discussion we should be having! Please comment with your thoughts.

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Great post, @bacchist! I definitely think this is a conversation we should be having. My hunch is, many STEEM traders right now are classic altcoin pumper/dumpers who haven't read the white paper and have no idea about the intricate details of the coin and how so much of it is being created while so much more is locked in as VESTS.

That said, I can also see why those who want to see STEEM succeed don't want to get into the details about the market cap. Being in the top 5 is a really big deal. If we were buried at position 20, would we be getting the same level of interest? Would we be on Poloniex right now? Interesting questions... I for one hope we can have as much transparency as possible to avoid the classic failures of so many altcoins who have come and gone.

Thanks for getting this conversation going. Hopefully Dan or Ned will chime in with their thoughts as well. Clearly they are also worried about growing too quickly as new signups were turned off.

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Whether it's intentional or not, I think it's pretty clear that Steem is gaming coinmarketcap to its advantage. But unlike previous attempts to game CMC (remember Auroracoin? 50% of the coin was premined and locked away from the markets, but for some reason CMC still reported it as though that 50% was available?), the locked-away SP should actually mean something. So kudos to OP for asking the questions!

If you like what I write, check out my series on game theory!

Excellent work here. I have learned a lot in the last few days from pieces like this one. I have been loyal to Bitcoin for 5 years now, and only just recently decided I was cool with alts. Steemit blows my mind. I have a headache from all the information I have absorbed.
I am thinking about converting some bitcoins to steem power as I type this, but I just can't make myself pull the trigger. I mined over 3,000.00 bitcoins in 2011 and 2012, and I sold most of them for $10-$15 each. I keep reading pieces like yours hoping to find something that makes me execute this stupid trade. I have been doing this for days. I am not sleeping well. Please help.

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Hahah. Sorry to laugh at your discomfort, but I'm laughing because I've been there and it's oh so close to home. I've gone through so many missed opportunities that I had to pull the trigger when Steem came around after reading the white paper and playing around a bit. I still bought in early and it would be hard for me to buy at these prices... but then again, I feel the same way you do about Steem. Since early 2013 I was bitcoin or nothing. I played once or twice with some altcoins, and I always wrote them off as useless distractions. Now, for the first time ever, I'm thinking bitcoin has a very real challenger. The speed of confirmations, the small size of the blockchain, the SBD peg, the vested shares concept, the social media platform giving perceived value to newcomers... there's just so much here to love.

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That said... again, I wouldn't know if buying at these prices makes sense either. It's hard to know what has been priced in and what is yet to be discovered. I hope you can make a decision soon and move past the cognitive dissonance. Either way, I wish you the best!

Good post man! Well I think it could be worth a lot more but we'll have to wait and see what happens when the flood gates open and we have a million users on the platform few months down. Nothing can be predicted 100% but steemit is expected to grow and that should inflate its value.

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I agree. I think the current steemit community is still a small minority compared to the people who use facebook or twitter. We might expect a skyrocket to the value of steem when people start pouring in. We are lucky to be among the early adopters. :)

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I suppose that's the best way to look at it now. As long as you have more than 100 SP you are good to go. :)

Definitely worth more! But, In time that will show. If you compare Facebook users ALONE, we are seriously at the infancy phase of this experiment! Nice post

Upvote for my mate 👍

Good point, interested to see what will happen in the near future for steem / steemit.

You have just managed to change my worldview regarding steem. This is more complicated than I thought. So back to reading more........

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I'm trying to learn more every day and pass along whatever turns up... There are a lot of moving parts.

It's worth much, much more. The herd hasn't got their collective heads around Steemit yet. And the whales are trying to figure out how to buy into such a tight market. Going to be really fun when the stampede starts. Mayhem!

Nice post.... I m sure, steemit is going up!

Personally, I use the full supply (Steem + Steem Power) as market cap.

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Is there a standard mechanism for valuing illiquid assets like Steem Power based on some type of sane risk analysis given volatility over time? I tried google searching but only came up with a bunch of PDFs which made my eyes gloss over.

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@pharesim you need to factor in the fact that Steem Power is not very liquid since it takes 2 years to fully convert it to Steem (by way of powering down). I am not sure how to represent this correctly in a mathematical formula.

that is interesting :)