Using Existing STEEM BlockChain Data to Create a Case Study for SMT’s

With SMT’s on the horizon, many people are wondering how launching an SMT could fair out. After reading the SMT whitepaper, as a non-developer I was very disappointed. The entire paper was aimed at developers and it lacked basic information that the average website owner (like me!) would like to know.

As an average website owner that has already managed to monetize my website successfully there are many questions I have about SMT’s (and I already have a good understanding of Steemit, imagine the questions from people that never heard of Steemit or blockchain). But to try and workout in my own head how all of this could play out, I needed to create a case study.

Although there are ‘case studies’ in the whitepaper they do not really answer any of the questions I have. So the aim of this analysis is to create a case study backed by actual data from the Steemit BlockChain. The data used is based on DTubes actual account activity.

DTube is the decentralised version of YouTube, which has been created on the STEEM BlockChain by @heimindanger. This project has been financed by Steemit Inc. by way of delegation of 2M Steem Power.

One could view this delegation as fund raised or investment made on launch of the SMT.
Although DTube is not currently an SMT ( and I am not sure what their plans are) for the sake of this study we will assumed DTube to be a SMT with their token issued 1:1 at the value of STEEM. Therefore 2M Steem Power Delegation is 2M DTube SMTS. Let’s refer to this token as DTMT. (DTube Media Token).

We will also make the following assumption

• DTube went live on the 2nd Dec 2017 (this is the date the delegation was received)

• all DTMT’s went to the founder accounts (2M)

So what has DTube achieved since the 2nd December?

Usage Growth

From the 2nd of December 2017 to the 17 April 2018, 203k posts were made by 32.05K authors. These posts received 3M net votes and 285K comments. The comments were written by 44.22K authors and the comments received 190K net votes.

We can see in the chart showing the number of posts by date that on launch there was general growth in usage up to 30th Jan. Usage has since declined at a steady level.

DTube had organic traffic via its promotion on Steemit. There are currently approx. 80K unique active users on Steemit, over 900K registered accounts. That means there was over a 55% uptake of active steemit users to DTube. This is rather good considering Steemit content is generic and DTube is not for everyone. Many websites that may be interested in SMT’s would have a niche topic. Therefore you could expect uptake to be higher on these types of sites.

This can easily be compared to an average website with an email list or following of 80K people where the following is fully engaged with the content.

Let’s make some more assumptions. Let’s assume that DTube did not have this existing traffic and user based that Steemit gave and instead has an existing following or email list of 500K people.

Based on this and the data above, the uptake on comment participation is assumed to be 8.8% and for posting is assumed to be 6%.

This trend of initial growth can be linked with excitement of a new product within a current audience. The decline as seen in the charts above can be managed by applying a marketing strategy that ensures a continued flow of new users.

Founder Activity

In this case study, DTube has taken all the tokens at initial distribution. Initially this means that DTube must distribute rewards until other accounts grow their power. Lets take a look at the activity of the DTube account from the 2nd of December 2017 to the 17 April 2018

9390 votes were made to 2252 authors. That’s on average 69 votes a day at an average voting weight of 13.11%

DTMT’s Distributions

Based on the actual activity shown above for DTube on the Steemit BlockChain, we will now apply the assumptions to review the distribution implications of these activities.

As DTube is the only accounts with Power as per the assumptions above. Therefore a vote from DTube on launch was worth approximately 159.20 DTMT.

Taking this vote value, voting 69 times a day at 13.11% power we can calculate the rewards paid out in DTMT’s each day. This being split 75% author and 25% curator, we can now calculate the daily growth in DMTS’s for the founder by way of curation rewards and also the rewards paid to authors.
We will need to make the assumption that the founder account is optimized to maximize curation rewards and they do received 25% curation.

(Note these calculations to do take into consideration the changing price of STEEM which has an impact of the value of a vote)

When the founder account votes, they earn curation rewards, which increases their DTMT’s daily balance (as seen in the closing balance chart below). This in turn increase their vote worth, which then also impacts their curation rewards.

On the 2nd of Dec the founder started with an account of 2M DTMT’s and a vote of 159.20 DTMTS.
By the 17 April, the found account is now worth 2,047,447 M DTMTS. That equates to a 2.4% in just over 4 months and the value of a vote has increased to 163.27 DTMT’s.

In addition to the growth on the founder account as DTMT’s are distributed, Author rewards are also distributed. In turn as each author account grows their votes becomes worth more and the cycle of distribution continues.

We can see in the chart below in the 4 months the cumulative curation rewards distributed amount to 142,324 DTMT’s

US$

So far all this analysis has been based on the token DTMT’s. For the sake of this case study we will assume the price of DTMT’s remain at 1:1 with STEEM. By making this assumption we can take the STEEM prices and calculate US$ equivalents.

Let’s first look at the founders account

An Initial investment of 2M DTMTS costs $2.44M, however with curation rewards and the increase in the price of STEEM from $1.22 to $2.80 the total gain in 4 months would be 133%.

Contributors to the platform would also have gained in US$

Taking the author rewards and using the STEEM rate on the day, a total of $499,771 would have been paid out by the found to contributors.

Making an assumption that within the 4 months no one powers down, as the price of STEEM has moved considerably during the timeframe, the current value paid out to contributors and stored in power would be $398,558.

Conclusion

SMTs offer the possibility for you to tokenize your business. Based on actual data taken from the STEEM BlockChain for a live decentralised application and making certain assumptions we have been able to show what would be possible with an investment of $2.4M on a website with 500K users and am 8.8% uptake on adding contributions by comments.

There have been many assumptions made in this analysis and it is important to point out that any variation in these assumptions could make material differences in the results of this report.

While we have kept the price of STEEM and the sample token STMT’s stable at 1:1, the crypto market can be very volatile and gains or losses made by the price move.

This analysis does not address ICO valuation and a full risk assessment should be carried out before you make an investment. There is always the chance you could lose all of your money and this article is not to be taken as financial advice.

The study above represents my understanding of the SMT whitepaper coupled with my knowledge of how steemit works and is subject to assumption and a lack of full and comprehensive understanding on how SMT’s work.

The Data and the Queries

This analysis was carried out using actual activity data from the DTube account on the STEEM BlockChain.

The query used to get the activity growth was

SELECT
    author,
    created,
    children,
    Category,
    Depth
FROM comments (NOLOCK)
where 
contains (json_metadata, 'DTube')

The query used to get the found voting activity was

SELECT * FROM 
Txvotes (NOLOCK)
WHERE [voter] in ('DTube') 

Both of these tables were further filter to exclude all data before 2nd Dec 2017 and further calculations were done using DAX.

To get the actual STEEM US$ price I also connected the model to coinmarketcap data using the url
https://coinmarketcap.com/currencies/steem/historical-data/?start=20171201&end=20180417

Other reference: SMT Whitepaper https://smt.steem.io/

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Posted on Utopian.io - Rewarding Open Source Contributors

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