To power up... or not to Power up... Hmmm?

Steem, like most other cryptos, has been on the down for quite a while, and has passed below the 90c mark. How much further down it will go before it comes back up is anyone's guess right now, but I'm pretty sure it will come up for some fresh air eventually. This means that it's a good time to accumulate your Steem, but should we be powering up our post rewards, or should we stay with the 50/50 option? That is a good question to be asking yourself quite regularly, and there are usually 2 main factors to consider when deciding what is best for you:

1. Value of your SBD Reward - Is the SBD bellow $1/SBD, and how long has it been there?

Why do we need to know this? Well, when your post rewards are calculated with the 50%/50% reward option set, the rewards algorithm assumes that SBD is priced at $1, and so gives you the equivalent SBD for your STEEM at that price. If the SBD price is higher than $1, you get more SBD than you should, and so can buy more STEEM on the market if you wish. If SBD is under $1, you get less SBD than you should, and so cannot buy as much STEEM as you otherwise would be able to.

With the SBD conversion option missing from our wallets on most front-ends, it is quite a tedious task to convert your SBD into STEEM using the 3-day moving average STEEM price, which is what your rewards are paid out at anyway. Converting your SDB to STEEM takes 3 days, so you're in for a wait there too. So, if you want to maximize your reward value when SBD is less than $1/SBD, then it would make sense to choose the 100% powered up option for your post reward. But there is a catch: liquidity.

2. Liquidity - Do you need liquid funds now?

Choosing 100% powered up rewards locks your STEEM up as Steem Power, which you will need 13 weeks to power down if you need to get it all out for whatever reason. You need to ask yourself if you need to have liquid funds at your immediate disposal, and how much of it do you need.

Can you power down your Steem Power at a suitable rate to meet your needs, while powering up your post rewards to gain that slight advantage of the SBD price being below $1? If you can, then you stand to gain a small percentage better reward by powering up 100% of your post rewards, and powering down some SP as you need it.

But wait!

There is a third factor, which not many of us are aware of, and which has only recently become important:

3. The SBD Print Rate - Is there any SBD in the post rewards?

With the SBD/STEEM debt ratio moving up above 5%, the SBD print rate has reduced to 0%, which means that our post rewards are being paid out in liquid STEEM, and STEEM POWER. NO SBD!!! That means question 1 about the STEEM price is irrelevant because you will have no SBD to trade and take advantage of the sub-$1 price. The only question you need to ask is whether you want to power up all your rewards, and grow your power and influence, or if you need some liquid STEEM to spend. If you need liquidity, stay with your 50/50 split. If not, power it up!!

Why Power Up?

Other than having extra Steem Power to give you a bigger upvote value, and a bit more influence for voting for witnesses, holding Steem Power gives you the added advantage of earning interest just by having it in your wallet.

Interest? Yes, your Steem Power is sitting there, ticking up slowly with every block which is produced on the Steem Blockchain. In fact, with every 1 Steem reward produced, 9 Steem is distributed between everyone who is holding Steem Power, according to their share of the total Steem Power. Just take a look at the @steemit account wallet. Refresh the page every few seconds, and you'll see the STEEM POWER balance growing pretty quickly. So even holding a little STEEM POWER will see your balance grow over time, not as quickly as an account with over 40 million STEEM POWER.

You can also lease out some of your Steem Power to earn liquid Steem in return. That's about as passive an income you can get anywher, and in some cases at a very good return, even while earning interest on your STEEM POWER you have lease out.

So, my advice to your is this: Power up as much as you can, unless you have some requirement for liquid currency right now. Whether you choose the 50/50 or 100% powered up rewards option, there is no difference in the $ value you will get out of your post while the SBD print rate is 0%. Perhaps mix it up and power up every second post, and see how your Steem Power balance grows over time. Perhaps I will give that a go.

STEEM ON!!

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