Delegation Explained

in #passive-investment2 years ago (edited)

Passive Investment
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Delegation is a passive investment vehicle, which I believe is a unique way to earn Hive without creating or manually curating content on the Hive blockchain. While the two most commonly known and understood ways to make Hive Tokens are to be awarded author rewards for content creation and curation awards for manual or programmed upvoting, there is a third way of earning Hive called Delegation. When you earn Hive through delegation, you don’t create content and you don’t upvote content. Instead, you first “Power-Up” or transform Hive into “HivePower” the real unit of influence or value awardment on the Hive platform. Then you loan HivePower to other people or businesses on the Hive blockchain, through a loan process called delegation. The people or businesses you delegate your HivePower to, use your HivePower primarily to award content and earn curation awards, which they then share with you. Thus you can earn Steem here without being an active or reader/curator.

Delegation explained

To understand why delegation is possible you need to understand that unlike many other cryptocurrency blockchains which have one coin, the Hive blockchain has three, which are called Hive, Hive Power and HBD. Influence on the Hive platform otherwise know as the amount of Hive award your upvote bestows, depends on how much Hive Power you process either through purchase, lease (delegation)or loan (delegation). Those who own HivePower can delegate or loan hive Power to others, who use it primarily to generate curation awards and share those awards with the owners of the HivePower. Thus curation can be an active process of consuming and upvoting, an automated process using upvote bots like Hiveauto or a delegated process. People who own HivePower loan it out through a special loan process called delegation.

The Safety of Delegation

I have loaned people money before and it is always risky because once you give someone your money. There is a risk of the business failing and you lose all your money. There is the risk that the business succeeds and you don’t get your proper share. There is always a sense of vulnerability when your money leaves your possession. The wonderful thing about this invention, called delegation, is that you when you delegate Hive Power you still control it. So you can take it back anytime you want by Un-Delegating it. You don’t have to ask permission to take it back and you don’t have to wait for someone to give it back to you. You just Un-delegate it and take it back.

Examples of Delegation

Many people delegate their Hive Power to manual curation projects to support, manual curators who reward good content with upvotes made valuable by delegated Hive Power.

Delegation FAQ

You can only delegate Hive Power you own.
You can’t delegate Hive Power you leased or Hive Power delegated to you for free. Once you undelegate Hive Power the project or business you delegated it to loses that Hive Power immediately and can no longer use it. However you won’t be able to use it for 4 days.

Summary:
This passive investment vehicle, which you control is rare in cryptocurrency and you should take advantage of it during any periods of inactivity to keep your investment working for you. As Warren Buffet, the Billionaire Investor said, if you can't figure out how to make your money work while your sleeping, you will probably work until the day you die.

✍️written by Shortsegments.

Shortsegments is a blogger or writer on social media application or platforms, some of which are running on blockchains. A decentralized application or a decentralized platform, means there isn’t a central authority or owner to take your account away from you and your account can’t be deleted. You are the owner of your account and these platforms are censorship resistant. In contrast, centralized platforms have a central authority or owner who can freeze your account, hide your content and delete your account and all your content. Examples of centralized platforms include Facebook, Instagram or YouTube.

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I've been curious about delegation for some time, but never really knew much about it. Thanks, for this useful information. Currently, looking to delegate around 1000 HP. Whom would you recommend as a safe, short-term investment; ideally, one that might be profitable, too. Thank you

There are limited choices on Hive, but Project-Hope is one which reports a high ROI.

Posted Using LeoFinance

Thanks, for the tip. Will check it out.

Thanks for putting this together. I knew of delegation but I did not know the delegator also earned HIVE. Is there a way to calculate expected ROI from delegating?

I would imagine it depends on the activeness of the delegate.

The curator determines what percentage of the curation rewards they share.

Didn't know that! This info is very useful since we hope people will delegate to us as we curate blockchain content produced by our students.

Having a large delegation would help us give powerful upvotes to our students' content and encourage them to keep posting.

It's good to know that delegators can earn HIVE too. That's another value add we can mention when sourcing for new delegators.

Thank you for your comment.

Where you find the time to write so many articles each week?

LOL, good question, they just come to me and I write them down. I read a lot also and write about what I read.

I don't have the time to write too much because I start to explore news venture.

Hi @chesatochi
How are your ventures going?
I enjoyed your coffee and crypto.
@shortsegments

Congratulations @shortsegments! You received a personal award!

Happy Hive Birthday! You are on the Hive blockchain for 2 years!

You can view your badges on your board and compare to others on the Ranking

Vote for @Steemitboard as a witness to get one more award and increased upvotes!

Thank you for your Birthday wishes. I miss you on Steemit.

Our future on Steemit is... nothing. We will never support a centralized and censored platform.

Why the four days to get back the power? I understand a wait period, but a day or two seems sufficient. Why four?

Is there anyway to find out who is doing well on the writing section i mean best author to delegate?

Old thread, so I hope someone wouldn't mind answer a question? So I delegate tokens to a particular person or group. There is always a return. But what happens when you send a token other than Hive? Second layer tokens. what happens when you delegate a different token? I hope yall understand what I'm getting at.

Yes you can delegate hive and earn rewards in hive.
And yes you can delegated a second layer community token like the token Leo and earn Leo.
The specifics depend on the delegation agreement, usually posted on the account you delegate to..

Posted Using LeoFinance Beta

I understand delegation as far as matching tokens. So an example would be what happens when I delegate say Leo tokens to a hive delegation token or group? Or another example Leo.voter delegation, what if I delegate Hive Instead? I think you understand what I'm asking now. Thanks

The terms of the delegation are determined by the person your delegating to. As a contract, all terms are negotiable, but delegations outside those terms may not earn you anything.

Example;
You delegate hive to a hive curator, someone who generates high earns off curation in lieu of his/her high hive power, much of which is delegated to them, in return for a share of the hive curation earns. However you decide to delegate Leo instead of hive. The outcome depends on whether the person you delegate to agrees to pay you in return for this delegation. They may not need Leo and since the delegated Leo doesn’t increase hive earnings for a hive curator, they may chose to pay you nothing.

However, someone else who can use the Leo to curate Leo community posts, may be happy to receive the Leo and pay you Leo, which you can keep or trade for hive. Or you could stipulate they pay you in hive, which they could also do, providing they agree to do so.

Posted Using LeoFinance Beta

Just found this post and see your explanation :3 Thank you~ I get more information that I need~

You are welcome, I am glad the post continues to reach people with the good news of tokenized social media on the Hive blockchain.

Posted Using LeoFinance Beta

Awesome I got it! I really apreciate your time!

It's been four days since I undelegated my HP but still not in my account to use? Has the time period changed?