This week, I wanted to understand why CTP was continuously loosing value over time and what I found out was a bit shocking. One reason why CTP is losing value is because you are willingly loosing money yourself!
Why delegate to projects when you can make more money curating yourself?
At the moment the biggest CTP account according to the richlist is brofi. There are around 314'000 CTP tokens delegated to it.
Thanks to the Hive-Engine Tool, I saw that Brofi manages to generate an APR of around 19.35% on this CTP tokens. At current prices this is around 7.5 Hive per day that Brofi generates thanks to the CTP tokens that are delegated to them.
On the website of Brofi, you can see that the pool for the CTP delegations can expect a reward of 0.89 BRO tokens. This represents a value in Hive close to 4.5. So the delgators will share a reward of around 4.5 Hive, while Brofi generates a value of 7.5 Hive!
With the linear curation curve, it's quite easy to generate similar returns. Just by curating you would earn around 19% APR. By delegating to Brofi you get around 11.6 % ARP.
Why do you willingly give away about 7%
If you curated yourself with your staked tokens you would earn 7% more!
Negative effects on CTP prices
This has a negative impact on CTP prices. Because every day brofi sells a part of the curation rewards on the markets to buy Bro tokens. It being the biggest token holder, this has quite an influence on the long term development of the CTP token value.
In the long term that is actually also bad for a project like brofi because with lower ctp prices, it will have less and less value to purchase Bro tokens and it will be able to pay less and less return to delegators.
The problem is not brofi, the problem is the people who are willing to loose money on the way
The concept that Brofi has built is nice and it fulfils a need. A lot of people have tokens that they don't need and don't really want to curate with. So it's great that they can delegate them to brofi and get a return for them.
For the people who are more involved in the CTP community however I think they should try to have a good picture about their earnings. If they can curate CTP themselves, they should do that and not loose money on the way. It's better for their own finances, for the ctp token value and thereby even for brofi.
This was my rant of the week and I hope you don't mind...
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That's a good point, I never really looked in to the numbers but if the APR is 19-20% on curation rewards anyway then I'll just set my account up to follow the ctpsb curation trail, use the vote multiplier and it gives some additional support to CTP posts you're curating!
Exactly. I mean if you generate 19-20% APR and at the same time you stake some of it, not only do you get a better return like that but you also do something for the token value. In the end you will earn on both ends, more return on a more valuable token. Thanks a lot for stopping by!
!ENGAGE 20
ENGAGEtokens.I do not think Hive tokens are priced overvalued to sell them 😑 While CTP can generate more CTP tokens for you, there is no use dumping the token. Maybe that's because of bearish side of market but still they are undervalue all in all...
ENGAGEtokens.The dumping season has started lol. There isn't much rationality left on the market I believe. That's always a good moment to build stakes :-)
!ENGAGE 20
Love this post! Enjoyed the "rant" and the valuable insights that came with it.
So far I've been too lazy to get into BRO so I haven't delegated any CTP at all! :) More CTPTalkers should be aware of this so I've reposted it.
Cheers!
DH
P.S. English Teacher's Hat: No, no, no, not LOOSE (the opposite of "tight"), but LOSE (the opposite of "win"). Don't freak me out like this every time! I spend my days correcting Japanese students' lousy English so give me a break! LOL!
Heck. Maybe I should just LOOSEN UP and stop complaining like a LOSER!
Thanks a lot for your comment and your valuable english corrections ;-). Spelling has never been my strong point. Maybe you can use such examples to illustrate mistakes in class lol.
I think that people tend not to understand the return they manage to generate with different projects and I believe it's good to show some perspective. The simplest way is not always the worst.
!ENGAGE 20
The funny thing is, spelling wasn't my strong point either as a kid, and I often screw up when writing on the blackboard or whiteboard (or whatever the "correct" term for those things is now) in front of the class.
I think you're right. It would be a valuable service if you did decide to make some more videos to guide us on this topic.
ENGAGEtokens.I guess you could be a little LOOSER with your approach 😜
This is really great information to have. I am not exactly clear on how you factored an apr from curation, Did you factor what you have staked compared to what you are paid monthly for upvoting, and used that percentage as you apr? If so did you use your previous 12 months (curation, author, delegation rewards) for your data pool?
Has anyone else noticed that the system pays author rewards on comments?
Great article,interesting concept :-)
To make a comparaison between delegating to brofi and curating by yourself, I took only the values that would change. This wouldn't have an influence on author rewards for example. If you delegate to brofi, you will get bro tokens distributed as a rewards but you wouldn't get curation rewards. If you don't delegate to brofi you don't get delegation rewards but you generate curation rewards. To calculate them, I took an account who only has ctp tokens staked (@achim03.ctp) and used the tool as an average income from the last 30 days, divided by 30 and then multiplied by 365 day to get an APR. The tool actually calculates the APR for you. This doesn't comprehend any author rewards. I get more than 20% on all my accounts that have CTP tokens staked and that are using their full voting power.
example: @achim03.ctp
Maybe you also want to look at this post where one of the witnesses compares curation returns for different tribes. He even gets 25% APR for CTP.
Thank you so much, that is an excellent answer, and that Hive tool is so much fun almost lost 12 min playing with it. Thank you so much you have taught me a great deal today 😀
!ENGAGE 20
ENGAGEtokens.I have bee doing the same. I curate the posts manually. I always though that this is better than delegating to some other account to do this for me.
This really put light on why more and more people should do this.
!ENGAGE 10
With a linear curation reward as CTP has it, I believe manual curation works very well and gets nice returns. You can easily make 20% APR just by curating. Thanks for stopping by!
!ENGAGE 20
ENGAGEtokens.It's frustrating, as we were on top at BroFi for a while there, which meant it would buy CTP tokens off the market. Now it's just selling.
But alas, we need to do a better job of making CTP more visible and create more reasons to buy, stake and use it.
We've got lots coming, but it's just news right now, until people see it, they won't pay it attention.
The market has the attention span of goldfish, so we need to build better shiny objects lol
I agree with you but when you look at LEO that brings out new stuff every month, even that seems not to be enough when you look at LEO prices.
In the end it's the price that defines the shininess of a token. Just look at POB and how it explodes without real reason.
At the moment the CTP market is quite balanced with a little bit more sale pressure than buy pressure. Thanks to CTPchat and CTPSB, we have a constant buy pressure that compensates the sell pressure from Brofi. If there is a bit less delegation to brofi, the number of CTP dumped will be reduced and the balance could tip the other way around. The best would be to bring some fresh people or fresh money into it :-)
Thanks a lot for your comment!
!ENGAGE 20
ENGAGEtokens.Really appreciate the information, Achim! I need to do more work curating so I can earn that higher percentage. I will have to rethink my delegations.
If a delegation brings you more return or it helps to rise the value of a token, then it makes sense. But if it's not the case, I believe it's better to use your stake to curate by yourself.
!ENGAGE 20
Achim, I just undelegated 10K CTP tokens and now have to wait for them to come back to my account. I was being a little lazy about curating for awhile. Back to it though. Want to get my account working like it should and could do for me. Thank you for the ENGAGE tokens! Happy New Month and PUD!
!ENGAGE 15
Made in Canva
@lisamgentile1961
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ENGAGEtokens.ENGAGEtokens.Good Afternoon and Thank you, @misterengagement! Enjoy your day. 😀
Made in Canva
@lisamgentile1961
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I guess I am learning at the right time. Is this also a problem for other tokens?
ENGAGEtokens.Thanks
I haven't looked into the return for other tokens. I think that a project like brofi makes a lot of sense if you have tokens and you know that you won't be active it a community and therefore won't be able to curate with this token.
With the concept they propose, the more delegation they recieve, the less each delegator will recieve. In the long term everybody involved is losing once a threshold is crossed where the value of the distributed BRO tokens equals the possible returns in the token in question.
!ENGAGE 20
It is a good analysis you are making. It would be interesting to understand about all the tokens.
Knowing the threshold would be very good info
This is a great article, it confirms exactly what I have been thinking recently about CTP and other Token delegations. Brofi is just one example! There had to be a reason why they were offering this service (now it is obviously "7%"). A very nice profit 🤔
CTP is a cool "general" community (NOT Niche) with value in my opinion. I will consider carefully how I delegate my Tokens going forward...
I want to delegate X sp to @user
Where X is the amount of SP and @user is the steem user you want to delegate to. For example:
I want to delegate 100 sp to @ctpsb
@tipU will answer with a delegation link. Hope this helps!:)
I think that brofi offers a nice service for somebody who has tokens that he won't curate with. They give a little return that this person wouldn't have. However it's more profitable to curate by yourself I believe if you have the time for it.
!ENGAGE 20
Yes, I agree 100% √
!PIZZA
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ENGAGEtokens.ENGAGEtokens.