Staking has been a hot topic in crypto for a long time. Staking rewards are great and a lot of services offer them. Make your stake work for you!
I’ve already wrote a few posts on the staking rewards on Hive and the ROI side of things.
Reminder of the Hive inflation distribution:
- Authors 32.5%
- Curators 32.5%
- HP holders 15%
- Witnesses 10%
- DAO/DHF 10%
How does your Hive stake earn for you?
Your Hive stake, or more accurately Hive Power earns in two ways:
- Staking Rewards
- Curation Rewards
Staking rewards. As we can see from the chart, 15% of the Hive inflation goes to HP holders as staking rewards. HP holders don’t have to do nothing to earn this. Their stake just grows. Passive Income. With the current level of staking share, this is around 3.33% APR.
What I personally don’t like about the current concept of staking rewards described in the HIVE VESTS | A Flawed Staking Rewards Model? is that they are hidden, not visible and not marketed. A daily transaction as a reward can go a long way.
Curation Rewards. Curation rewards are not totally effortless unlike the staking rewards. Stake holders do need to put some effort (votes) to get their staking rewards. The process is even gamified, and stake holders can increase their CR depending on the curation efficiency. 32.% of the inflation goes to this pool and depending of the voting efficiency the APR for this is between 10% to 15%, and sometimes even more.
Your Hive stake earn 3.3% staking rewards, passive income and on average around 12% curation rewards, that require some effort. A total of 15% average APR.
Hive inflation is around 8% at the moment. How can the APR be 15% or more if the inflation is just 8%? It basically comes down to the thing that not all the coins are staked. The less the share of staked coins the bigger the rewards for those staking it.
Now that we are clear about how your stake earns on Hive and how much, the next thing is, can it be improved?
Note that in September 2019 there was a HF which changed the author/curators rewards from 75/25 to 50/50. This is a change in favor of the stake holders. Can we go further? What can be the next step?
Can we change the ratio authors/curators/stake rewards? The 32.5%/32.5%/15%?
Obviously, we need witness and DAO/DHF rewards, can’t mess around with those.
How much can we increase the staking share? Double, 30%? it will leave the author curators to 50% of inflation? Maybe go even further, 50%? Authors/curators get only 30%. Authors only 15%! At this point my opinion is that it’s too low. 15% for authors will lose the blogging aspect totally.
Maybe at some point in future if we have more valuable media tokens, this can be done. But we are not there yet. So, I would say 30% staking rewards will be the next possible step for the time being.
The @realwolf had a post on the staking rewards Hive Staking Rewards with some pretty radical proposition with only staking rewards and a possibility to tip some of those if you like. I think this is a radical shift for the moment. But we might explore a less radical one for starters.
I want to point out again here that first we need to make the staking rewards more visible then the current system! Otherwise it will not make any sense if they are increased!
If we double the staking rewards that will mean that the current 3.3%, will become 6.6%. Again note that this numbers depend on the share of the total staked coins, and they can change.
Now let’s go into some pro and cons of this.
Pros
- Higher passive income
- Daily rewards without any effort (no curation needed)
- More incentives to hold HP
- Attracting more investors?
Not sure about the last one? On the new investor’s topic, except for the staking rewards, power down time should also be taking into consideration but that is a topic for a separate post 😊.
Cons
- Smaller rewards for authors/curators
- Less incentives for posting/curating
- Making it less attractive for new authors to come in
- Slowing down user growth
- Cartels forming
One of the strong selling points for Hive has been get paid to post, and the ability to earn from nothing. This will get smaller now. Some may argue that people who want free coins will usually dump them, as they earn them, but this is not the case for everyone. I know a lot of the authors here that have been earning and investing at the same time growing their stake.
It is a mix bag. Some dump their earrings, others are encouraged to invest. Lowering the author rewards might lose this.
Lowering/Removing the PoB of the system will open the doors for cartels forming, since the ones controlling the stake, control the inflation and they can make sure nobody else got it. Again, closing the doors for outsiders and new users.
The above are just a possible pro and cons. We really don’t know how things will play out until its implemented.
Changing the author/curation/staking inflation share and we have an increase from 3% to 6%.
But if someone is leasing out now, he can get 13% and +3%, or a total of 16%.
Also, one can delegate to some of the curation projects (@curangel, @ocdb, @tipu) and receive somewhere around 10%+3%. No need to renew leases. A bit smaller returns but you set it up only once.
One more option is to follow curation trails.
The point here is that with just a bit of effort and an investor can have easy 13%, without hurting the authors/curation rewards. Is it worth changing the author/curation/staking inflation share?
IMO no.
Is there anything that can be done for better staking rewards?
What I think would help more is having a smoother experience and market for delegating, leasing out and leasing in HP.
A systematic on chain market for leasing/delegating HP. Not to forget @dlease is a centralized service, a third-party platform. A lot of the users/investors, especially new ones might don’t know it even exists. Also, the curation projects. Some know them some not. Again, new users/investors not.
What we want is an integrated button in the hive wallet, just as the stake button, where it says delegate/lease! A small note next to this showing the last 7/30 days APR (13%, 14%, 15%). A one click button and that is.
It will be an integrated delegation/lease pool.
Also, the other way around. You have a button lease, just next to your HP, where you can go and increase your HP.
It will be a system that will incentivize trade on HP based on an internal market, just as the Hive/HBD. Every new user will see this immediately. You have an option to lease out or lease in HP, directly from the system in a secure manner, not some roundabout ways. It will make it more attractive asset overall, and their you go, your staking rewards 😊.
All the best
@dalz
Posted Using LeoFinance
The entire system needs to be redesigned if Hive ever wants to be viable in the long run and a valid option for outside investors.
Any project can give a high % ROI that comes from inflation. The only real use case for Hive for as far as I see right now are the resource credits for users that want to transact and dapps that want to provide those for their users. Aside from that, it's just about staking Hive to get more Hive which on top isn't even and effective way to get returns.
I like what the other crypto blogging platforms are doing way more. Leofinance using the ad revenue to buy and burn tokens from the market. Publish0x has a reward pool that is fully sponsored by different projects, uptrennd also using the revenue to buy back tokens.
On Hive there is none of that, yet the average post value is unrealistically high compared to their actual economical value. There is also no need for bloggers to be invested in HP since most upvotes come from a couple curation groups or dapps that have a lot HP. Bend your way to what they upvote and be on their radar and you are golden. If not, you are pretty dead in the water as the non-linear post rewards punish individual accounts to vote on smaller bloggers.
Investing to curate also makes little sense as content discovery is horrible and you have to plow through piles of garbage to potentially find something good. Also, nobody in the real world is interested in what is shown on the trending post as nearly all posts are about the platform itself. Why would anyone get HP keeping half of the rewards and giving half away to see it likely get dumped on the market which hurts the investment.
The problem when it comes down to blogging on Hive is that the current system simply will never work to put what the majority believes is the most interesting on top. I would not minds seeing lower blogging rewards and way more of the inflation go to people staking Hive for passive returns.
It's nice that Hive is giving some good earnings for blogging right now, but looking at it from the angle of being invested in HP it really makes me wonder how it all makes sense.
Wow ... well thank you for your long comment :)
A lot of the things around here are not perfect I totally agree .... but to say everything sucks is to much.
After all this place has been around for more than 4 years and survived and it is still giving value to people.
About earnings and concentration of the stake, I can tell with facts that its much better now than 2 or 3 years ago. There is much more active people now with 10k or more stake, that can give 0.1 to 1$ vote, meaning one can realistically get rewards for his post in the range between 1$ to 5$ without the big players.
On other hand we also have curators with big stake that do curate the average Joe, so to speak. I know that you have some votes from Splinterlands for example :).
Investing to curate efficiently is the name of the game now, and I have a dedicated account for this.
Resource credits are the obvious valuable thing now I agree, but their is also a lot of different moving parts to this system. One maybe want to invest to influence governance and witnesses and the DAO fund.
Revenue from ads and buybacks are great and I support this, just not sure how it will be done in a decentralized manner. Maybe someone need to make a proposal?
At the end .... what do you think? How to redesign the system? Any ideas?
I wouldn't say everything sucks, the tech itself works great and if you want to come here to earn you can easily achieve that right now if you play by the rules. The main thing I am looking at is the long run and how realistic and sustainable everything is. From that point of view with the current model, it feels like it is bound to underperform the crypto market and eventually collapse (similar to how most of the tribe tokens have.) The daily inflation needs to be bought up in order for the price to sustain itself and there currently just are way more reasons to sell than to buy.
Don't get me wrong, I'm not complaining about the votes I get as I do reasonable well mostly thanks to Splinterlands and their curation. It's just that having 5k HP or 500HP most likely would give similar results in post-earnings.
For as far as curation goes, it feels like nothing more than a game as it is not really about what content people enjoy but more about the content they know will get more votes which maximize the rewards pretty much like everything on the platform. With the non-linear reward curve, it was possible to upvote smaller accounts you more relate to, now this is pretty much impossible.
For as far as redesigning the system. I guess the entire reward pool chasing incentive mechanism is one of the main flaws. I wouldn't mind that the reward pool for blogging got reduced drastically in favor of investors getting passive returns on their Hive.
I guess creating a system similar to Reddit that really nails putting posts individual users actually are interested in on top would make hive a lot more attractive. Instead of ranking posts based on the upvote value they got (which simply doesn't work), rename the upvotes to tips and design a new system that lets users up or downvote based on what they actually like/dislike also removing all the posts about the platform from the trending page putting them in a separate tag. At least this should create a front page people in the real world can relate to which could create way more traffic / potential advertisement revenue. Not sure if something like this would work though, something needs to be done to make the platform way more interesting for outside readers and way less exploitable for users who try to get the most out of it. I guess getting decentralized social media right can be compared to solving the blockchain trilemma. Nobody really succeeded so far.
You might have a look at the model I came up with for my @upvoteshares curation project 2 years ago by the way. That actually has been working wonders acting exactly as it was designed. You might find it interesting being into the entire model economics of the platform.
!BEER
I love the idea of an integrated "Lease" button on the Hive wallet! That would be quite a task for @peakd !
Although I would also like to see the staking rewards higher, the arguments against it are quite severe. User growth should always be our priority no.1!!
The thing is we cant know until we test it out :)
Many were against the 50/50 change, but now they are embracing it.
Also I have the feeling that we are basically in the hands of the bigger crypto trends, bitcoin going up and down, and not as much as this little tweaks.
As long as we don't screw up big time, we should be good.
Integrated lease out/in button (and market) would be a great addition imo.
I totally forgot too
Posted Using LeoFinance
Yep, having a integrated leasing system for HP can give it a boost and make it more usable :)
Posted Using LeoFinance
My favourite kind of post - let's look at the issue and then decide against changing it!
I agree TBH.
I think we need to market that 15% 'truly passive' return (although I know it's not really 15%!) - but what makes Hive Hive is the curation I think, for the most part - it's a social media platform, and it's really not that much effort to curate effectively!
Good point about side-tokens, I'm looking more and more at LEO as a viable earner, as I'm sure you are!
Yes, I like to go in the pro and cons when some idea is trow out .... Sometimes I surprise myself from the end result :)
Curation maybe is not working ideally at the moment, but it is working :)
We dont have an ideal systems. And yes if you are an investor it takes just a bit more effort to setup a min of 13% ROI.
Cheers!
!BEER
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Posted Using LeoFinance
yep... and hard to calculate :)
Posted Using LeoFinance
Nowadays I don't pay much attention to it but in the early days I really wanted to see the numbers increasing :)
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How do we participate in curation and voting to increase our staking rewards?
Is it simply by engaging with current content or is there something deeper that is required?
Blessings.
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