Hello fellow PWR holders,
I've been thinking about the matter for quite a long time and I believe now it's an appealing time for this kind of transition. Grab a coffee and get comfortable, there's a few things to digest.
The first and most important:
The PWR token is transitioning from a soft-pegged HIVE token to a growth token. This essentially means the project is not ''necessarily'' covering the peg with HIVE at a 1:1 ratio anymore.
On paper it may appear to be a simple change, but in practice I believe it has many more implications. Let's explore the changes and talk about the motivations for them.
But Why? One Main Reason: VSC
(If you don't care about the context, you can skip this part)
VSC Kills completely the small market fit for PWR.
The just launched Virtual Smart Chain (a.k.a VSC) works with a liquid version of staked HBD. It's only a matter of time for Hive Defi to get launched and get better Hive Derivatives.
In it's current state, PWR can't even try to compete. Not to mention the small niche it is. If the demand for HIVE is small, imagine the demand for something soft-pegged with that in a slow dying environment like Hive-Engine.
Nah, most PWR holders are there because
1# - simply trust me (thank you for that).
2# - are small gamblers/arbitrage hunters on Hive-Engine.
Don't want to extend more than necessary, there's a lot more to cover.
Changes in PWR Token Economics
With a PWR token depegged, now the price can fluctuate. This enforces a couple of things.
- Changes to Distribution Formula for Hive Power Delegators: Formula will now be sensible to PWR price Vs. HIVE (Similar to other projects on HE like BRO or LEO).
Formula for distribution currently assumes PWR is always at 1:1 with HIVE. This provides a lot of predictability for PWR inflation. It protects the price when down, but also prevents the price from going up that much. This is awesome for a project which pretends to be soft-pegged, but not for a growth intended token.
For that reason now the formula will be sensible to the PWR price. The APR will still be a fixed number, but the amount of PWR tokens sent will fluctuate.
Price goes up? Less tokens.
Prices goes down? More tokens.
Change it's NOT live yet but will be out of the oven in a few days. Give it a week or two max.
- PWR Staking & Liquidity Providers APR: For now these will remain as they are minimum until September. After that I'll probably consider reducing staking to a single digit number and eliminate completely PWR emissions from LP's.
My intention for Liquidity Providers is to receive HIVE only as a reward.
- BuyBacks & Protocol Owned Liquidity: Although I don't have a strong policy regarding this matter I like the idea of using excess of funds from the project to buyback PWR from the market and send them back the issuing account.
This way delegators are receiving their share of the pie without extra inflation.
I'm also playing with the idea of setting up a separate account as a market maker for the PWR-HIVE market.
Changes in PWR Assets Management
Being depegged also means the project isn't necessarily forced to hold HIVE to always honour a peg. I can use project funds to search for opportunities around else instead of being 100% HIVE (which you can do anyway on your own).
I like the Ethereum ecosystem, more concretely the RWA ("Real World Assets") sector. I like how people like Michael Saylor leveraged debt to get a massive Bitcoin position.
-> In fact I played with the idea in the past.
My long-term vision is to build a big portfolio of crypto assets and use a vehicle like PWR to share this wealth in a fair way.
For now I'll be taking this approach:
- Hold a 'blue chip' like BTC or ETH
- -> borrow debt in $$ with protocols like Aave or Lend.Hodl
- invest/trade other assets with the borrowed cash
'Profits' will be used from time to time to buyback PWR from the market.
PWR will be 'backed', but not 'redeemable'.
Holding PWR you get exposition to all of these with 0 work from your side.
The only requirement is (obviously) to trust me.
I'll keep sharing monthly reports as usual.
Long-Term Roadmap
In no particular order, only as a future point of reference.
- Migrate PWR and all the required Smart Contracts from Hive-Engine to VSC
- Permisionless PWR-HIVE Liquidity Pools (on VSC).
- As the project grows and once the project reaches a certain size, scale it up to a defined legal structure.
"I Want Out"
I fully understand that these changes may take more than one by surprise (I still believe they are necessary).
So I will understand if someone wants to withdraw from the project. No questions asked. No hard feelings.
For at least 2 weeks after the publication of this post, I offer to buyback any amount of PWR at 1:1 ratio.
Conclusion
Only constant is change, and PWR is no exception.
This post could be extended in many ways, but for the moment I prefer to keep the information contained and simply let the doubts arise.
Doubts? I'm all ears.
Tagging any PWR holder with 500 or more tokens (sorry for the small masstagging).
@x30
@yabapmatt
@oldmans
@spinvest
@dera123
@resiliencia
@mawit07
@trumpman
@ichheilee
@lbi-pwr
@toofasteddie
@tiffin
@bozz
You're not voting for my witness yet and love what I do? Don't ask me more:
Well I will leave my stake in since I want to See how your ideas work out and it is a limited financial risk for me personallly.
Having PWR backed with other crypto assets makes imo only sense if it is Bitcoin or some yield generating stable coins.
Thx man. For now is ETH and the borrowed USD is the used in riskier things, more on this on a later post
Thank you very much for the update.
Switching over from investing all in HIVE to getting some BTC, I think is a good move long term. The timing of when you do this swap will be very important. The BTC to HIVE ratio now is 300k+ HIVE to 1 BTC but if HIVE shots to $1 before the end of this year, the BTC to HIVE ratio could drop to under 100k HIVE for 1 BTC, making it a much beter time to swap out.
The only concern I would have is borrowing against BTC to buy other things. Borrowing against BTC to buy more BTC are stake stables would be alot safer. Borrowing against ETH to buy more ETH and stake it would be a great move. If the markets turn and drop to where to loan is about to be liquidated, you'd have BTC or dollars to top up your collateral. Anyways, im sure you'd only be borrowing against an asset during the bear market when things are near their cycle bottoms, so lots a of time.
Everything else sounds great, moving over to VSC, LP changes and stuff.
For now I got some ETH, but still have to study a bit more about the risks of leveraging a ETH position like this 'just' for the staking rewards.
And yes, the idea is borrow when price is down and liquidate all debt near the top and tether/hbd'ed.
Easiser said than done btw
Thx for the feedback!
Well looks like I won't sell, (not like I have a lot anyway) so however it's all good with the new changes.
Sounds like a plan for me. I fit in that first group of people, so I am willing to ride this bus wherever you take it!
Thx for that long time commitment support man
Thank you for the update. How will the delegation of Hive change in distribution?
How is PWR mechanism different from SEED?
Till, then, keep on stacking.
Hey Alex, hope everythings okey :)
If PWR price goes up, the 12% in Delegation rewards will 'print' less and less PWR. Something which doesn't happen now. Currently the distribution bot assumes 1 PWR is always 1 HIVE.
SEED had a few problems:
Based on presales through DAO Maker (apparently dead now). Those presales worked great in the beginning but had LOOONG lookups, like ~2 years or more in some cases. That was fatal.
hard coded fixed supply: which gave me 0 flexibility for a growing liquidity pool.
Full KYC on DAO Maker from my side. This was another killer long-term. Spain is being very hostile with entrepreneurship and treats his citizens like criminals by default. I had a ''false alarm'' (in the end not finally needed) which would have forced me to declare all our SEED assets as 'mine'. With incurring taxes and all that stuff.
With PWR it's a bit different.
Gracias mi amigo por la respuesta detallada. Estoy bien, un poco cansado. Despues de pasar un tiempo contigo, creo que puedo confiar en mi gitano iberico. 😂😘
''Gitano ibérico'' JAJAJAJ
Das ist so, als würde man Sie „Mein lieber Balkan-Rohling“ nennen (auch wenn Sie nicht von dort stammen).
Amigo, during the #BeerSaturday with @detlev, when our friend, @xrayman joined the table, you said: look, we all are gitanos ibericos, and I think it was me included, which I found very kind of you.
Gerade heute hörte ich einen Bericht über eine Frau, die wegen Hassverbrechen gegen Roma angeklagt wurde.
@xrayman ist der größte Zigeuner von allen, keine Frage, ich mache das nur im Sommer, wenn ich braun werde.
Danke, dass Sie mich an diesen Moment erinnert haben (ich hatte ihn nicht wirklich vor Augen). Gute Erinnerungen :)
I have a big head, where I put all the stuff in, and it is still empty. I still can sketch the table in the middle of the bar where we have been the first time, with me sitting with the back to the group tables. The last bar, where we went in the back was harder, as I had some good beers. @xrayman is cool, no matter what, or at least if he does not switch from animal xrays to taxidermy, because that would be weird.
That's the best compliment you could give me! To be included in a group with you two!
Hombre, the weight of this one matches more mine, rather then yours.
Gay
Yes, we are happy that you are happy!
You definitely have my trust so no worries there. I have been using the LP as somewhere to store and earn on my liquid Hive as I wait for Hive to moon (maybe a long wait, I know). 🤑 The 1:1 ratio made it seem like a good place to store my Hive.
That being said, I will probably take out about a third of my overall PWR and take you up on the buyback. The rest I will let ride for now and see how it goes.
Ofc man, thx for the trust.
When you're ready you can simply put the sell order at 1 HIVE and me or someone else will grab it up in a few hours max.
Ping me in another comment if needed
Sounds good. Should have them out there later today. Thanks!
I like the direction overall, and will happily continue LBI's goal to grow our PWR wallet with this path in place. A couple questions spring to mind:
That's what comes to mind to begin with, I think that having a regular update for the asset backing per token is important - arbing the pool to asset backing rather than the 1 HIVE peg could become a thing (not that anyone seems to care for LBI - but you know what I mean). With non-hive holdings come some potentially big value fluctuations and having a way to track that would be nice.
I need to start buying more PWR. I didn't realize I only had 100.
Good luck moving forward!
Thanks mate! you're always welcome :)
@tipu curate
Upvoted 👌 (Mana: 53/63) Liquid rewards.
That is logical in terms of the price fluctuation. I'm not a economical ou financial expect, but seeing from my point is it just as simple as this:
Wishing you a Happy Easter, F!
Still on my way to 100 PWR... 😅
Talvez não me tenha explicado bem, mas referia-me ao facto de que se a ficha vale pouco, ao pagar a TAEG é necessário imprimir muito mais fichas para a mesma TAEG e vice-versa.
Foi o que aconteceu com a LEO, por exemplo. Se o token vale 10 cêntimos e se delegar 10000 Hive Power (com hive a 0,2$) a uma TAEG de 12%, deverá receber cerca de 33 LEO por dia ((33 tokens * 365 dias)*0,1 = 1200).
Por outro lado, se o preço do LEO fosse 0,02 e delegasse o mesmo 10000 Hive Power (com HIVE igual a 0,2$) para receber os mesmos 12% apr, deveria receber cerca de 164 LEO por dia ((164 fichas * 365 dias)*0,02 = 1200).
Note que em ambos os casos está a receber no final do período 1200 HIVE em valor (12% no final do ano), mas no segundo caso está a imprimir 60000 LEO e no primeiro caso cerca de 12000. Isto afecta significativamente o valor da ficha que recebe como recompensa.
A PWR não se mantém a este preço por nada, mas tive estes números em conta desde o início para que a inflação não ficasse descontrolada em nenhum momento.
Um grande abraço!
Fiquei esclarecido, F! Muito obrigado pela tua paciência e pelos exemplos que apresentaste. O APR não muda nos dois casos, apenas o número de tokens PWR recebidos ao longo do período. Espero que o projecto seja de sucesso e que consigas fazer a transferência para sistema VSC, segundo percebi.
Um forte abraço, amigo!
Should I buy more sir? This text is too long
Hey man, long time no see, I miss you.
Yes, you could use some moneys around if you will, but for now 'no moon'.
PWR -> SEED 2.0 is what the post means
SEED v2 sounds good to me.
(ok, ty)
Dev is making chancgis to the bot atm btw. To be expected. I'll catch up when changes live.
That's one thing, but the other is ETH you mentioned, I think you should proceed with caution as it doesn't have good PR lately and so it does perform
Ethereum is one of the most relevant projects out there and currently it has a better Risk/Reward ratio vs Bitcoin.
Price wise is still a laggard, but 50-70% of crypto activity (excluding bitcoin main chain) is happening there,
Which PR you're talking about?
My twitter feed is full of people moaning about how they're loaded with ETH, how it didn't perform (price-wize), is hardly used (and if it gets used it's expensive) and is controlled by Vitalik
Well, that's simply not true.
Price wise didn't performed well, that's the only thing.
But this cycle so far only Solana and a few outliers (apart from memes) had this run.
It's being used a lot (more than parking wealth rather than quick trades), but so far big guys go there.
Regarding being expensive, it's true that's the most expensive chain so far, but gas prices went down +90% with the last updates. A regular tx now costs 0.5-1$. Long gone are the days of +10$ fees (at least for now).
And regarding Vitalik controlling ETH... in my opinion it's simply Bitcoin maxis fud. They are so annoying btw