MAP FinTech - M Token Distribution to Delegators and Price Increase - 22 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
A decent week, and very similar returns compared to last week at just a whisker under 19% APR.
I have described at length in previous posts the issues around payouts versus token pricing, so I shall avoid that this week.
Instead, we shall focus on one small change: the M token price spread.
We have reached a nice round number of 0.95 HIVE for an M token and 0.85 HIVE as the official buy-back price. With the various token migrations from old funds now completed, we shall see this fund grow organically. As promised, we shall now narrow the gap from 10 cents down to 5 cents. We shall do this by keeping the sale price fixed at 95 cents and let the buy-back price rise to 90 cents. Once this happens, both prices will then rise in unison.
I trust all members and delegators are satisfied with this. This means everyone will see some value growth and the overall fund remains fully funded and close to its asset value per token. We could narrow the spread further, as per MAPR, but I see that a slightly larger gap has created more trading opportunities. We can review this in the future.
Also, a reminder that 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 0.847 to 0.850 HIVE, an increase of 0.354%, equivalent to 18.4% APR.
Our distribution to delegators is 0.362%, equivalent to 18.89% APR.
Hence, total value distributed to delegators is 18.91% 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 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
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 831k HP and slowly drifting downwards, whereas Steem is still very high at 995k SP but shows the first sign in weeks of possibly tapering down. 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 55% APR whereas a Hive upvote is worth about 27% 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. Hence, our returns of 18.9% APR for this week is very good value for both delegators and token holders.
Have a fine week!
Any questions, please ask in the comments below or in our public chatroom.
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