MAP FinTech - M Token Distribution to Delegators and Price Increase - 19 October 2020

over 3 years ago

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.

Apologies that this is going out so late, but I've been away for a few days. The distribution to delegators was done a couple of days ago, so this is really just for the record and no weeks appear to be missing.

M News

A decent week, with both distribution yield and capital base slightly higher.

To put our earnings into context, I see that Dlease rates top out at about 14.0% APR, still lower than this week's M yield of over 16%.

This is likely a small blip upwards as one large delegator has left and the remaining members benefit from the lag between voting and payouts. So, given the current economic situation, I would not be surprised if next week may dip lower again. However, our DCity income is making a decent addition to our fund and that is due to continue.

The Hive blockchain itself is yielding about 25% for a whale upvote of 1 million HP, but for most users it is around 14%, with just half of that coming in as author rewards (or curation).

We are seeing some volatility in the underlying HIVE coin price and this has triggered some frenzy in the HE token market. 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% to our headline APR return, so about 8% of our income.

Our official buyback price has increased to 0.891 HIVE, with the sale price fixed at 0.95 HIVE.

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 0.889 to 0.891 HIVE, an increase of 0.225%, equivalent to 11.7% APR.

Our distribution to delegators is 0.323%, equivalent to 16.80% APR.

Hence, total value distributed to delegators, adjusted for the token price increase, is 16.84% 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 rising, possibly showing signs of some patchy activity during the HF, whereas Steem has about 820k SP, and is also rising after a prolonged fall.

Also, taking 1 million as our whale HP/SP, a Steem upvote is worth around 32% APR, and falling, whereas a Hive upvote is worth about 26% APR and holding steady. 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.

I previously mentioned that I thought such figures somewhat puzzling, but note that the recent claims on the two chains are in exactly the same ratio as their yields. Thus the reward pool is being shared among many more claims on Hive, hence the lower yield.

Have a fine week!

Any questions, please ask in the comments below or in our public chatroom.

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