MAP FinTech - M Token Distribution to Delegators and Price Increase - 9 November 2020
Our weekly report for both delegators and token-holders of M.
Delegators have received their token distribution and token-holders see the price rise a significant amount.
M News
A good week, with distribution yield slightly higher as the HF24 issues have worked their way out of the system and DCity income has helped too.
To put our earnings into context, I see that Dlease rates are at just over 14.0% APR, still lower than this week's M yield of over 16%.
As mentioned last week, any significant change in delegations can have a manifest effect on the following week's income, but then as time passes we return to a steady return. I hope to see us edge up beyond 17% next week - no promises though!
The Hive blockchain itself is yielding about 26% for a whale upvote of 1 million HP, but for most users it is around 13%, with just half of that coming in as author rewards (or curation).
We are dividing the DCity income into two equal portions, with some replenishing the capital and the rest paid out to our members and included in our distribution. At a rough estimate, this has contributed about 1.5% to our headline APR return, so about 10% of our income.
Also, a reminder that the delegator percentage returns are calculated on the basis of the previous week's price, plus obviously the income we generated. It is also based on the proportion of our voting SP that comes from delegators rather than from our own capital. Now, to make this a bit easier we shall publish two values: one for delegators; the other for token-holders.
The third number is merely the product of the first two weekly percentage increases and gives the true value of the distribution to delegators; it gives the true profit for that week on the assumption that those distributed tokens are sold at the new price.
I hope that makes sense. Let's have a look at this week's numbers.
Our buyback price has increased from 0.895 to 0.897 HIVE, an increase of 0.223%, equivalent to 11.6% APR.
The sale price remains at 0.95 HIVE.
Our distribution to delegators is 0.321%, equivalent to 16.74% APR.
Hence, total value distributed to delegators, adjusted for the token price increase, is 16.78% APR equivalent.
That value is the distribution of tokens plus their increase in market price. Thus, I hope you can see that the third calculation is hardly necessary, but I also hope it has illuminated how such calculations are done.
In the ideal situation, as M was conceived, those three numbers would be almost identical, save possibly for the third or fourth decimal place. However, I can see that this M token is being largely used by delegators, with few sales of the token itself. It is therefore going back almost to the original MAPR model, before the tokenisation, and hence the income generated by the fund is balanced between delegators and maintaining the net asset value of the whole fund.
My experience of third party tokens on Steem-Engine means this is a more prudent strategy for the long-term health, and wealth, of the M fund. It also leaves open the rare, but possible, decline in the token price should the assets held need to be devalued. This makes M a more flexible split-level fund where the income and capital are more loosely coupled. I imagine most members may not even notice, but for those who read these posts I hope this brief explanation illuminates the recent divergence between the income and token price increase as APR values.
Hive News
As Hive started as a fork of Steem, and the economic model has not changed, it is worth comparing the two reward pools: Hive has some 900k HP, and falling slowly after a dip up during the HF, whereas Steem has about 840k SP, and is stable after a prolonged fall.
Also, taking 1 million as our whale HP/SP, a Steem upvote is worth around 33% APR, and recently nudging up, whereas a Hive upvote is worth about 26% APR and has dropped significantly in recent weeks. Most users are still getting just above half of these numbers for their own upvotes due to the non-linear rewards curve, and then half again for just the author rewards. Hence, our returns of about 15-17% APR for this week is very good value for both delegators and token holders.
Just to stress that these theoretical numbers are how the blockchain adjusts to changes in activity. They are not always commensurate to the opportunities available to actually generate such incomes. They remain relevant metrics as to the health of each ecosystem.
Have a fine week!
Any questions, please ask in the comments below or in our public chatroom.
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