Over the last week, a change has been made to our EDS wallet investments - @lbi-eds. An opportunity arose to purchase EDSMM - the second miner token from the @eddie-earner project. These were priced on the market at 1.98 HIVE each.
When I set up the EDS wallet, It was funded with 10,000 HIVE. This got split with 5000 swapped to HBD and put in to EDSD. For those that don't know, EDSD is a HBD backed token, that converts the interest from the HBD it holds into HIVE, and uses that to mint EDS and strengthen the EDS asset base. Anyway, at the time that 5,000 HIVE got us around 1100 EDSD (1100 HBD value).
To see how this wallet was established, the initial post has all the details:
@lbi-token/lbis-eds-wallet-and-plans-ee9
There was also an update post done more recently:
@lbi-token/lets-check-in-on-our-eds-wallet-71x
Lets look at the maths.
1100 EDSD would mint 9.22 EDS per week, at current HIVE prices. (This is calculated by (1100 * 7.5%)/52 to get HBD interest share, and then converted to HIVE).
I was able to trade those 1100 EDSD into 6582 HIVE (booking a profit of almost 1600 HIVE over 6 weeks).
Those HIVE were then used to purchase 3311 EDSMM
EDSMM mint EDS via the mining contract, with an expected rate of 0.2 EDS per EDSMM per year.
This means we should, in theory, mint 12.73 EDS per week.
So, even at current HIVE prices, where EDSD works quite well at minting EDS, we will increase our weekly EDS mintage by 3.51 (estimated) per week. (work out to be a 38% increase).
But over the long run, it works out even better. The reason behind that statement is that EDS generate HIVE income. Obviously if we mint EDS faster, then that income grows quicker, making the math's more attractive.
Downsides.
The other factor to keep in mind is that if HIVE's price increases, the amount of EDSD we earn drops. So unless HIVE drops significantly from here (which is of course always possible) we should be in front.
The down side to the swap to miner tokens is the loss of liquidity and flexibility. These are likely to be hard to sell, if we wanted to exit the investment. It's a really thin market, and could take ages to get them all sold. On the other hand, EDSD are very flexible, and can be liquidated into HBD in 3-4 days. So we are definitely giving away a big amount of flexibility in return for higher EDS mintage rates.
These EDSMM have 17 years of EDS allocated to them, at the rate of 0.20 EDS per miner per year. For the foreseeable future, I will hold these on our balance sheet at the purchase price of 1.98 HIVE each. These would be almost impossible to update regular with market prices. The market is really thin, and once the current batches sell, it could be months before any more are available. If I had more funds available, Iwould buy more off the market at this price.
In the first regular report since the re-launch of LBI, here is how the EDS wallet looked:
Today, it looks like this:
That's it for the news today. Thanks for checking out this post. If you want to know more about LBI, here are a few posts for you.
@lbi-token/lbi-weekly-holdings-and-income-report-week-6-8-sep-2024-ij
@lbi-token/dividends-resume-for-lbi-holders-bci
@lbi-token/setting-up-our-next-investment-jf8
Have a great day,
JK.
@jk6276