Two more pros for Hive? Let’s take a look what this is all about.
Hive Power or more accurately VESTS earn it two ways:
- Staking rewards
- Curation rewards
Recently I have wrote a post about the VESTS staking mechanism HIVE VESTS | A Flawed Staking Rewards Model? and dived a bit more into this.
The staking rewards for Hive Power, or VESTS are a bit mysterious, not very visible and hard to calculate. Some refer to them as no rewards at all but just as compensation for the inflation, but I will strongly disagree with that. For example, when people get salary raise, do we say it’s not a raise but just inflation compensation? No. I believe we need to take advantage of this, make it more visible and clear as staking rewards are attractive to a lot users.
1. Staking Rewards
In my previous post I made a rough calculation on the staking rewards for about 2% per year. This was a rough estimate and here I will go a bit more into detail and calculate the exact staking rewards. Also, I got some nice feedback from the comments pointing out to some more exact calculations. Special thanks to @preparedwombat who have done calculations on the staking rewards in his post The Hive Power You Earn for Holding Hive Power.
15% of the inflation goes to HP holders. The current inflation is 8.07%
Formula:
(978 - (head_block_number / 250000)) / 100
Hive
15% out of 8.07% = 1.21% * 2.4 (correction for the of Hive Power share) = 2.9%
The correction for the amount of the total power up hive comes from the fact that not all the hive is powered up and because of that the once that have powered up are earning more. The correction is calculated as a ratio of the total virtual supply to the HP. According to hiveblocks.com at the moment 162,477,610/390,277,346. Note that these values are dynamic and are changing daily so this ratio will vary and change over time.
Steem
The current inflation for Steem is the same as for the Hive 8.07%, although interesting enough it seems that at the moment of writing this the Steem blockchain has around 16k blocks less than Hive (Hive = 42,830,301, Steem = 42,813,666). Looks like the Steem blockchain is a bit slower these days 😊. Still this number does not affect inflation at significant amount.
So same inflation, BUT Steem has a higher percentage of SP. This is mainly because of the stake that Steemit Inc holds and that is vested. The total amount of HP at the moment according to https://steemd.com/ is 223,285,452. On Hives this number is around 162M HP, mainly because the Steemit Inc stake is powered down and its in the DAO fund. There is around 83M Hive there now.
When we do the math for the Steem staking rewards things looks like this
15% out of 8.07% = 1.21% * 1.75 (correction for the of Steem Power share) = 2.1%
The correction is calculated as a ration of the total virtual supply to the SP. According to steemd.com at the moment 223,285,452/391,725,062.
Hive VS Steem Staking Rewards
| Coin | Percent |
|---|---|
| Hive | 2.9% |
| Steem | 2.1% |
A 0.8% bigger staking rewards on Hive mainly because of no Steemit Inc stake powered up.
Curation rewards
Curation rewards are a bit harder for exact calculation. Curation and author rewards in general are allocated trough the voting mechanism. Powered Up tokens (VESTS) are being used to distribute this share of the inflation, or as some referred to it, the reward pool. Now if more VESTS are being used for voting it means that a fixed amount of reward pool is being distributed to a larger number of authors/curators.
Since the overall amount of powered up coins on Steem at the moment is bigger for around 38% it means that there is a potential for 38% smaller votes there. Now the second factor is how much of the powered up tokens are actively voting and participating in the tokens distribution. I can’t really tell what the percentage is of the powered up tokens voting on the both platform, but as we can see Steemit Inc is starting to actively using their stake for voting, delegating to projects etc.
This is basically reducing the rewards to the community stake. Because as mentioned the reward pool is fixed. I will make a wild guess here and say that at the moment votes on Hive are worth more for the same stake that those on Steem. If someone has some more accurate calculation on the votes value comparison please share in the comments.
Future outlook
As we are already seeing there is massive power downs on Steem. The exchanges Binance and Huobi are also powering down. This means that the Steem Power share is going to get smaller in the future, and basically the rewards for staking on Steem will go up. On the other hand, we are seeing that powering up on Hive is increasing, although I do not think it is growing a lot. They may be some small up trend, but not by a lot. This will slightly reduce the staking rewards.
On the vote value side, as more and more community members power down from Steem the remaining SP holders will have larger upvotes. But the thing is the main player that seems to be willing to hold SP now is Steemit Inc. This basically means that their vote value will grow even more, meaning further centralizing the chain in terms of rewards and tokens distribution.
Final though. Comparing these decimal differences with the price increase by 100% plus in a day or two looks meaningless. Still it was a good logic workout 😊.
All the best
@dalz
20% beneficiary to @preparedwombat
Let's face it a 2.9% totally passive return is not bad, not bad at all!
Very difficult to calculate the rest given the transition phase!
I'm not sure this pump is real.
Its pretty real if you can sell some :)
Most likely a pull back is coming.
I did sell 3K today, and I'm quite happy with the BTC I made, but I powered up another 5K of the total 8K I had liquid, and I'm happier knowing I now CANT' trade! Well, not by selling HIVE at least!
I'd rather get a decent nights sleep than worry about the Hive Price.
It's a cruel coincidence that this PD transitional crazy pump and dump period has coincided with lockdown - the last thing I need right now is for my main distraction from IRL uncertainty to be laced with even more uncertainty!
Thanks for this article! I had no idea that correction for Hive Power share exists.
And if powered-up hive is increasing that's huge, becuse there is still ongoing powerdown from binance with 6 instances left. Same for Huobi. So this means that HIVE is getting a LOT of attention.
Thanks for the comment!
Yes it does :)
Thanks for the explanation, I always wondered how the elimination of the ninia mine would affect the system's calculations of vests, staking rewards and curation rewards, super interesting. It may seem like small numbers now these all compound over time and the differences will be enormous in nominal terms with time
Posted Using LeoFinance
Thanks. Hope to do an accurate analysis of the curent voting HP soon ... that is intersting to see for me as well.
@tipu curate
Upvoted 👌 (Mana: 21/28)
Tweet:
Wow... this is really interesting ... I had no idea. At the moment I am working on improving my curation skills getting around 30 Hive per week only upvoting the very best and original content at 3.9 minutes. Seems to be working.... Am I doing it right ? Should I wait for 4 minutes ? Longer ?
There is no fixed right time for voting. Depnds how are other people voting on the post as well.
Ok thanks. I am just going to keep voting on the artists I find.