MAP FinTech - M Token Distribution to Delegators and Price Increase - 15 June 2020
Some great news for both delegators and token-holders of M.
Delegators have received their token distribution and token-holders see the price rise a significant amount.
M News
The original idea behind this M token, and the MAPR program that preceded it, was that profits were to be distributed equitably among both delegators and token-holders. This means that both kinds of investor would see almost the same percentage profit each week. Although the mathematics is a bit fiddly, it isn't that hard to achieve. Income to the overall fund comes largely from voting but also from other tokens held and some trading.
It has always been a matter of judgment what to do with capital losses, such as from other tokens. We have never held a significant amount in third party tokens outside the MAP FinTech family, so any such losses have been small and we have managed to amortise them. The same issue also arises when we have capital gains and, similarly, have tended to spread them out.
Such fund management avoids large spikes that can happen for a variety of reasons, including technical problems. This makes the returns fairly smooth from week to week and builds confidence that the M tokens are worth holding for an extended period. However, issues can arise when there are unexpected changes that may take a long time to absord. M is fairly new and currently on an upward trajectory, so I foresee no great issues in the imminent future, so this is a good time to decouple the earnings for the two types of investor.
There has also been a bit of confusion regarding how the token price and delegator distributions are related. The delegator percentage returns are calculated on the basis of the previous week's price, plus obviously the income we generated. It is also based on the proportion of our voting SP that comes from delegators rather than from our own capital. Now, to make this a bit easier we shall publish two values: one for delegators; the other for token-holders.
The third number is merely the product of the first two weekly percentage increases and gives the true value of the distribution to delegators; it gives the true profit for that week on the assumption that those distributed tokens are sold at the new price.
I hope that makes sense. Let's have a look at this week's numbers.
Our buyback price has increased from 0.844 to 0.847 HIVE, an increase of 0.36%, equivalent to 18.5% APR.
Our distribution to delegators is 0.363%, equivalent to 18.94% APR.
Hence, total value distributed to delegators is 18.96% APR equivalent.
That value is the distribution of tokens plus their increase in market price. Thus, I hope you can see that the third calculation is hardly necessary, but I also hope it has illuminated how such calculations are done.
In the ideal situation, as M was conceived, those three numbers would be almost identical, save possibly for the third or fourth decimal place.
This week, and for the first time, we see that delegators are getting a slightly higher return than token-holders, although most members are also delegators. I would like to keep the price to 3 decimal places, just to make it easier to read. As I said before, this does free up the possibility that the total income and the total fund value can be adjusted independently, if that need should arise.
Hive News
I am compiling Hive blockchain data in the same way as I have been doing for Steem. the only thing to report this week is that activity and income is significantly higher on Hive than on Steem.
As Hive started as a fork of Steem, and the economic model has not changed, it is worth comparing the two reward pools: Hive has some 843k HP and holding steady, whereas Steem is steaming up at 1035k SP. Without adjusting for price differentials, this in itself shows that there is more activity on Hive.
Also, taking 1 million as our whale HP/SP, a Steem upvote is worth around 52% APR whereas a Hive upvote is worth about 28% APR. Most users are still getting just above half of these numbers for their own upvotes due to the non-linear rewards curve, and then half again for just the author rewards.
Have a fine week!
Any questions, please ask in the comments below or in our public chatroom.
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