How much you can earn by delegation of SP - steemit in a minute #41
Is delegation really profitable? Let see how can we review their performance before investing our hard earned SP.
Steem Power Delegation
On wallet page, you can find the definition of delegation is...
Delegation is donated for influence or to help new users perform actions on steemit.
If you were a minnow who create high quality content, with great contribution to the community, and your work being loved by a whale, you may be delegated with some SP to power up your effort. This is by the original design and purpose of SP delegation.
However, a more common case is that someone has a project that is making profit on steemit. The project owner want to raise more fund to further scale up his work. He will then ask for investor's SP delegation.
![delegate 0b.jpg](https://steemitimages.com/640x0/https://steemitimages.com/DQmQ2XoUNoEztUt7dDwa6h4oBz86sDoCv4MVBfEpQDj9fcY/delegate%200b.jpg)
For example, SP is a critical success factor for an upvote bot. The more SP it got, the higher bid it can accept, and therefore more likely to be profitable.
![delegate_0a.png](https://steemitimages.com/DQmaiwwpwHVw9qZXJZo237ji27JRR38pBhC3uKxFGhMDR7q/delegate_0a.png)
Above is an example of a whale bot. He has got 123,503 SP by his own and got a further 239,045 SP delegation from other investors, giving a total of 362,098 SP!!!
Would you also consider to invest some SP to this bot? Before any decision, let's collect more information first.
Steem Power Delegation Information
There is no secret (or privacy) on blockchain. We can view delegation information of any account. Steem Reports is a good tool for this purpose.
By typing in the bot name, you can see the list of accounts who delegate how much SP to this bot. The longer the list, the more popular is this bot. You may also have an idea about how much SP other people delegate to the bot for reference.
Delegation Return
With reference to a couple of promotional posts created by the bot owner, they usually mention how delegation works and the benefits of delegation. However, there seems no concrete figures about how much return can be expected. For the bots, it may be difficult to commit a solid ROI to investors due to some reasons out of their control. Especially for the small bots, we can see some are quite under bidded with plenty of idle time. With that said, does it mean it is better to invest in large bots? Let's firstly see an example of a relatively small bot.
Case 1 - A small bot
Above is the wallet of an investor of a certain small bot. We can see the bot send the earnings to the investor on a daily basis. That is an on-going passive income. By sampling a week of data, it is found that the daily earning is about 0.042 SBD with an investment of 50 SP.
Invest 50 SP, average daily earning is 0.042 SBD
At the time of writing, SBD/STEEM price is 1.2. The annual return on investment is therefore 25.5%. If we compared this with the common banking products, the return of SP delegation is...
![notbad.jpg](https://steemitimages.com/DQmT8UhpHuJk3C5yKxb95YtUb8zzhXmhkVG3y4smYD3uiC4/notbad.jpg)
Is 25.5% the best deal? In the above example, it is a small to medium size bot with total of 36,000 SP delegated from 39 investors. Let's see one more example.
Case 2 - A large bot
This time, we check out the wallet of a person who invest in a certain large bot. By sampling the same amount of data, the average daily earning is about 0.041 SBD. Up to this point, it seems like 0.04x is the norm among bots. But further looking into details, the SP delegation by this investor is 100 SP. That is...
Invest 100 SP, average daily earning is 0.041 SBD
Double the investment, daily earning is about the same
![why.jpg](https://steemitimages.com/DQmaDG2g6zi6xnXgxse8u2P6mjKs8rF6wr7sfbAhDCtVGtj/why.jpg)
Conclusion
A high profit making bot does not necessarily give a high return of SP investment, and vice versa.
The more investigation you do, the more secure will be your investment.
To be fair to the bots, above calculation is only base on a small sample of data by hand. It is by no means accurate. The idea introduced here is that there are tools we can use to review the bot performance. Before making any decision, it is useful to firstly evaluate the SP delegation amount and return by looking into daily earnings of existing investors.
How much SP do you have? How are you making use of it? Please feel free to share your experience.
Thanks for reading.
This is a great post, and I think it's important to highlight the great returns that can be achieved through SP delegation. I think it will really help to bring investors into the platform.
Regarding the actual returns from different bots - they all payout earnings a little differently. Some bots pay out all of their earnings to delegators and some pay out only a portion and use the rest for other things, like funding a project as you mentioned.
One thing I have on my ever growing to-do list is to publish delegation information on the Steem Bot Tracker website so it will be easy for investors to evaluate how delegation is used for each bot and what returns they can expect.
I am so glad to have a Steem Witness replied to my post. Many thanks to @yabapmatt. I am sure the readers will find your comment a useful reference of SP delegation. Looking forward to see your update on Steem Bot Tracker soon. Have a nice day :)
thanks for sharing.
so do you find any good bots?
all i know at the moment is that they can be quite different in reward amount. pls be careful in making investment decision
I have also been asking if using bots really pays and I'm glad this write-up actually satisfied my curiosity
To you question, I have just 134 SP and I use it to curate people's posts.. That's all
Thanks for reading. I guess most of us are in this range of SP too. Although it is not a big amount, it is good enough to encourage good content. Hope to see you again soon :)
This post interests me, because I am trying to decided if a bot can really help profits more than I can do myself through curation. In cases where I have more SP than the bot, I think keeping the SP is probably better for improving vote rewards and curation rewards, which all recircle back actively to help SP continue to grow and put it use much quicker to continue to increase the rate of return.
50 SP sometimes takes a loooong time to earn manually, unless you get lucky whale votes, or paid using bots (which is really just converting your SBD into rewards you have to wait another 7 days for). I calculated that delegating that much to a small bot was going to take an even longer time waiting for them to pay back the $50 in rewards than if I kept it to help increase my own rewards.
My opinion is delegating is probably best for supporting a cause being performed by a group or service that you have no time or interest in managing.
These things are hard to measure and compare definitively, but I like the clear way you outlined it. Thanks.
Thanks for reading my post. In your comment, I can see you are already kind of expert or advanced user. I share the same view with you that it takes a long time for delegation return. Delegation makes sense only for people who don't have time to take care of their SP. Instead of leaving the SP idle, it just better to earn "some" return in the long run. It is still better than saving in fiat which subject to inflation and various bank charges.
You have given great explanation. Actually, it became clear to me. Thank you and resteem it.
I hope you will make a smart SP delegation soon. Have a nice day :)
You got a 6.62% upvote from @proffit courtesy of @gsxr!
Send at least 0.01 SBD/STEEM to get upvote , Send 1 SBD/STEEM to get upvote + resteem
Great info thanks!
Great post! You've earned a 9.51% upvote from @dolphinbot
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Someone's sitting in the shade today because someone planted a tree a long time ago.
You got a 1.22% upvote from @upmewhale courtesy of @gsxr!
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You just received a 4.28% upvote from @honestbot, courtesy of @gsxr!
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