Prologue
Land 1.75 was introduced on March 19th. In a few days, it will be 2 months old. In this post I calculated the return on selling produced resources, which turned out to be quite profitable if focusing on the scarce ones.
In this post, I want to explore my strategy further and compare it to the selling-strategy. As I'm writing this, I'm not sure yet how it will turn out. This will be fun, I really like numbers.
My current strategy
I opted to throwing everything into the pools and let my resources and DEC multiply there. How does this work?
Every 3-5 days, I collect all my resources and load them together with the respective amount of DEC into the different pools. You can look at a pool like a savings account, and there are many of them in Splinterlands and the HIVE-Universe. They make it easier to swap coins and tokens and in this case, resources.
Whenever someone uses the pool, they pay a swap-fee. I collect part of that fee, another part is burned, everybody wins.
NOTE: The amount you receive is based on the current market value. There is a 10% Fee on Swap Values, of which 5% goes to the market shareholders and 5% is burnt.
Let's go and invest
I'll take the same investment show-case as in my last post (here's the link again).
With 22,000 PP, we produce 44 Stone per hour. Of course, that fat leech in the castle wants their 10%, so we're left with 39,6 Stone - but no grain.
$260 (Plot 1) + $205 (Plot 2) = $465 aka 465,000 DEC
The numbers here will be very small, as the pools are already very big. And producing 39,6 Stone probably doesn't keep up with the growth of the pool. But I'll try my best to make it work.
After 5 days, I have accumulated 6.652,8 Stone.
The current pool holds 50,687,349 Stone and 8,449,097 DEC, which gives us a portion of 0.013%. But we also have to throw in DEC, which in that ratio is
0.1667 DEC per Stone, so we have to add 1,108 DEC, too.
We keep on doing that for 30 days. We'll have 39,916.8 Stone and 6,648 DEC in the pool - but how big will the pool be? As always, you can go to @azircon 's "all posts" and go through those regarding land. He highlights a very useful tool: https://splinter-lands.streamlit.app/ made by @beaker007 (thank you for that!).
There you can find, among others, this info:
We can see that we have a daily surplus of 330,000 Stone. But not all of that goes to the pool. How to figure out what does and what doesn't? Okay, this is a guess, but I think I can approximate it with this chart from the same tool:
Total supply is going down since Aura Labs came along, more or less. What I don't know is if that includes the pool, or if that's Stone stacked to piles in someone's region. So it's probable that not all of the 330k stone is pooled.
I could try and calculate the real addition/subtraction to/from the pool with the other charts, but I won't. For now.
As this isn't clear, let's assume that 300,000 Stone go into the pool every day, that probably being too high. After 30 days, 9,000,000 Stone will have been added. If the DEC/STONE ratio stays the same, it will be 1,500,000 DEC.
NEW POOL: 59,687,349 Stone and 10,000,000 DEC
NEW ME: 39,916.8 Stone and 6,648 DEC = 0.066 %
Hooray, I'm growing my stake faster than the pool!
Now we have a 30 day number, which is great because that's what the fees are calculated for:
You can see that the 30 day trade activity was a shocking
STONE: 61,934,486.633
DEC: 7,661,924.7
That's more than the pool currently holds. CA + Aura Labs effect, I guess. Now, we learned before about the 10% fee:
NOTE: The amount you receive is based on the current market value. There is a 10% Fee on Swap Values, of which 5% goes to the market shareholders and 5% is burnt.
So, the distributed part is 5%: 3,096,724 Stone and 383,096 DEC.
Since I now own 0,066% of the pool, my share is:
2,043 Stone
252 DEC
Now, what is our total investment? We have the 465,000 DEC already. But we also have our stone that we didn't sell, and the extra 6,648 DEC for the pool.
So, it's roughly 11,500 DEC more, totaling 476,500 DEC. If we sold our part of the pool, we'd get:
So it's 558 DEC per month that we get out of this, 6,696 DEC per year.
ROI: 1,4%
WHAT THE???? WHY AM I DOING THIS?????
Yeah, not sure either, but: That's 1,4% ON TOP of the ROI that I already got - because I still own the stone. It might fluctuate, but the value will stay the same. Taking that into account, all I add are the 6,648 DEC per month, so 80,000 DEC a year.
DEC: 6.57 per hour = 157.68 per day = 57,553 per year
ROI: 57,533 / 465,000 = 12,3%
That was the ROI in my last post. Since the price of stone has dropped since then, we have to re-calculate that.
Sell-Strategy
DEC: 5.956 per hour = 142.944 per day = 52,174 per year
ROI: 52,174 / 465,000 = 11,2%
A lot of fluctuation within a week!
Compound-Strategy
DEC: 52,174 + 6,696 = 58,870 DEC per year
ROI: 58,870 DEC / 545,000 DEC = 10,8%
Conclusion
It's interesting that added DEC to the pool lowers the ROI. I would've thought that the compounding interest would make this a better strategy, but it seems that I'm wrong. It does depend a lot on my assumption of the pool growing as it did. If it grows more, I make even less. If it grows less, I make more as my stake is higher. Anyway, a 0,4% per year difference is not much at my level - but when I grow, I'll have to reconsider.
With selling directly, I could also grow my stake in land faster. I might calculate that as well and compare the compounding interest with the compounding production. So this will be a triology.
In the meantime, I'm okay with my approach. As I have other sources of income, mainly HIVE, I will use that to develop my land for now and collect the compounding interest whenever it's needed for whatever. Or I'll just slowly grow into becoming a menace, storm that dang castle in Ia'telda and force the owner to communalize the earnings (no worries, Jedo, your keep is not in my tract). Or I'll be hanged for thinking of instigating a revolution. Who knows.
Thank you very much for reading, I hope you enjoyed it at least as much as I enjoyed writing :-D If you have any comments or feedback - please let me know! And don't forget to leave your own posts for me to curate. Thank you very much!
If you don't play the game yet, you can use my referral: Click here for referral :-)