When we look at the Miners that are running on Hive-Engine, they are all built the same way. Every hour, a certain number of staked Miners get a payout of a fixed amount. For most tokens, there are between 10 and 30 “winners” every hour.
The problem with traditional miners is the following. With every additional Miner token that is staked, the probability for mining new tokens decreases for all the existing owners.
Let’s calculate this together
In a first situation, I have 20 miners and there is a total of 2’000 staked miners. Let’s say that every hour there are 20 winners.
My chances to get a payout in 1 day: 480 / 2’000 * 20 = 4.8
In theory, in this situation I would have a probability to get 4.8 paiements in one day.
Now let’s look at situation two. I still have 20 miners but now there is a total of 20’000 staked miners. We still have 20 winners per hour.
My chances to get a payout in 1 day: 480 / 20’000 * 20 = 0.48
In this second situation, I will have a probability to get 0.48 paiements per day.
As you can see, my winning chances are linked in a proportional relation to the number of Miner tokens that are staked. The more miners staked, the less I will earn.
Why are LENM different?
The mining concept for Liotes Energy Mills is identical but there is a big difference with other hive-engine miners. Whenever a LENM token is sold, 100% of the proceeds is added to the Liotes fund. As we saw before, every increase in the fund represents a linear increase of the token buy back value.
For LENM, every hour 20 LENM get 0.3 LEN payout. This means that if I have a certain amount of LENM and the overall amount of staked LENM is growing, the chances to “win” are diminishing for me. This is not different from traditional miners.
To illustrate how LENM is different, I would like to make an example. For simplicity’s sake, I will take the same price for every LENM at 5 Hive. I will also make abstractions of certain effects that are a bit complicated to explain that would slow the buy back price adaptation.
Situation 1: 20 LENM and 2’000 LENM tokens staked overall
I will have a probability to get 4.8 rewards per day.
This means I could expect to earn 1.44 LEN tokens per day.
In this situation there would be 10’000 Hive Power in the Liotes fund. With an interest rate of 12%, this would give a buy back price per token of 0.005 Hive. Since I would earn about 1.44 LEN, this would represent an income of 0.0072 Hive per Day.
Situation 2: 20 LENM and 20’000 LENM tokens staked overall
I will have a probability to get 0.48 rewards per day.
This means I could expect to earn 0.144 LEN per day.
There would be now 100’000 Hive Power in the Liotes fund. Again with the interest of 12%, this would give a buy back price for the token of 0.05 Hive. This would represent an income of 0.144 x 0.05 = 0.0072 Hive per Day.
When we compare situation 1 and 2 in this exemple, we see that even if the probability to get payouts decreases, my income stays the same because this decrease is compensated by the increase of the LEN token buy back price.
If the number of LENM increases you will get less payouts but it will be compensated by the buy back value of the token. Therefore the total number of staked LENM has little influence on your earnings.
This is the big difference for the Liotes Enegry Mills compared to normal Miners. If there are more LENM staked, I will get less rewards but my earnings will more or less remain the same!
Buying very small quantities of LENM could lead to very low winning probabilities. If the winning probability is very low, this could lead to not getting payouts at all. We suggest that you own at least 0.1% of the staked supply to make sure that you have a probability to get a payout every second day.
The machine sets in…
The great thing about these LENM is that when there are more miners sold and staked, the whole machine takes on speed. If the account grows it has an effect on the different income streams. The more funds are available, the more income streams we can develop. This will have a positive effect on the growth percentage. Therefore a bigger fund, will allow a slightly faster growth.
This also means that the holders of the LENM token are not in competition with each other. Everybody profits when there are tokens sold because the bigger the fund, the faster the growth will be...
Are you ready for this blockchain adventure ? We launch 9.3.2021 at 2 pm CET!
Liotes
A project run by @ph1102 and @achim03
Resources
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Thanks for the explanation. !BBH
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Thanks for stopping by and the BBH!
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Command accepted!
That is a great concept for the miners, well done.
!BBH
Thank you for your kind words, Erik! Appreciate the support!
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Command accepted!
I'm all ready for this big project coming to Hive. I hope the CTP community would support this project?
Well, we got a nice feedback in these couple of days... Everyone who join us is welcomed and we aren't pushing anyone... :)
Thanks for the support, man!
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Second time I edit my comment, lol.
Seems you get fractional rewards, but I wasn't paying attention.
Looking forward to tomorrow!
I suppose LENMs will be bought via HE/LEODEX, not via liotes.com.
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Thanks for the comment!
Yes, it will be on the H-E/LEODEX, and if you want a small trick, I think that some of the people who will not be here tomorrow have created buy orders... :) I didn't think in that way at all, but it should work :)
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Thanks for the heads-up, I did add an order myself, just in case the first 5000 will go like it's Black Friday. :)
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Going to be awesome!
We definitely hope so :-)
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There is a quite nice math game that keeps the incentive model of being a miner vivid and profitable. Congrats my dear friends, you are killing it 😎
Thank you very much for your feed-back. We would like all the people involved having the feeling that they are working together. I hope we will manage to get there :-)
Great!
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Thanks!
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I think you will be surprised about how fast this’game’ is going to get traction. I will make sure to get some miners :)
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You know the best how things get traction! Following your account growth from ZERO to HERO, and it definitely got traction!
Thanks for the support! See you onboard!
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Thanks for the kind words :) zero to hero, I like that :)
What do you mean by this ? I guess I missed something .
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This would be the interest rate that we get on the hive power in the liotes fund. The rate matters not so much for this example. I hope we will get more than 12% :-)
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Oh yeah got it , that's what I thought initially too. I hope it's more than 12% though ;p Good for holders like me .
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I like to repeat always... This is just a layer zero... :) Don't forget that... And all calculations that are made are connected with our buy-back price, but, in reality, there will be other "subjects" that could buy LEN tokens for a higher price... Especially those who believe in the projects and hard-core hodlers :)
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Yup I got it lol .
BTW since we are talking about future ;) do you have any plans for enabling delegation for LENM ? or will that mess up the project ?
I think that we have answered on this one... It depends on how the project will develop... We have been asked about the LENM pool in the future, so if there will be a need for that, the delegation will be a must...
Atm, we think that it's not that important to have delegations... It's easy to enable them later, and they will be unnecessary expense, that we would rather invest in the growth of accounts instead
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Well since there is a popular perception that large amount of miners is necessary to get good returns , I asked that question ( In reality its not true) .
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Interesting maths right there. Looking forward to the project launch
Just want to remind you that this is our BASE layer, and we will build on top of that!
Thanks for the feedback!
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I hope there's still stock when I get up. I plan to get one or two as a trial run. I might roll some of the profits over to getting more at a later date (compound).
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We will definitely have LENM for 5 HIVE if the first early-bird batch for 4 HIVE sold out...
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I think I'll try my luck with something I heard yesterday... I'll put in my buy order early and it will fill when you sell lol.
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Yeah, we saw what you did there... ;) Good move :)
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I'm excited about the linear scaling of LENM payouts. I think it will be important for LEN to be burned or consumed for some useful purpose, in order to maintain a good market price.
They have planned a number of usecases , I don't think the burning is necessary at all but if they do burn then it will be a bonus .
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Makes sense, I assumed @ph1102 and @achim08 are thinking way ahead of me! 😄
Well, we were breaking our heads in the wall to figure it out, but actually it's easy to understand... You can look at only 1 thing and you will understand... Forget about the math...
If we reinvest all at the leyer zero and put back into the project, it has to bring stability... Simple as that... :)
I don't know if someone did that, and that's why this is different :)
Usually, the money finishes in someone's pocket at the beginning :)
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The beauty of burning them is that it will not harm to either side... Actually, it would be good for everyone :)
But, on the other side, if we have some hard-core HODLers, maybe we will wait for some time to burn them (if they buy them before getting to our buyback orders)... :)
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Its a little confusing but this is the in depth explanation I suppose. Late to the party, I just discovered this, but I might be interested in some LENM. Is 20 the ideal number to stake?
You are here right on time! The sale starts on the 9th of March at 2 pm CET... Check out other posts and the whitepaper to get more info...
Regarding the Mills (LENM), the more that you have, the more LEN tokens will they mine... You can start with the number that you comfortable with...
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March 9th 2021 sounds promising I will be watching
https://leodex.io/market/LENM
Cool project, I am checking
Thanks for consideration... If you need help, check out the links at the bottom of the post!
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Because this is such an awesome post, here is a BBH Tip for you.
. Keep up the fantastic work
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Because this is such an awesome post, here is a BBH Tip for you.
. Keep up the fantastic work