Why do you want to lose money
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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