Hello, fellow minnows! Two months ago we posted a warning about the shift in the STEEM Power delegation market. This was a result of @minnowbooster introducing a custom lease pricing for delegations. In short, they made the market dynamic as everyone can now set their own price for the lease and the market would naturally find a price equilibrium.
This however has shifted the price of delegations way lower than was envisioned in our initial launch 6 months ago. When we first started, You could lease 150 SP for 4 weeks at the price of 4 STEEM. But now the average price is around 100 SP for 4 weeks per 4 STEEM. This means that the initial idea of powering up with "100% power up" posts through delegations is not profitable any more.
On the other hand, around the same time, the price of SBD started also to depart from the $1 peg. As seen from the graph, the price has been as high as $14 per SBD and is now worth $5.47 at the time of writing. This means that by making posts divided 50/50 into STEEM and SBD, one can make more money for the post than is displayed as the payout by the steemit.com website.
Our underlying code and the idea to form a delegation pool is still valid as this helps You to get around having to make 10 posts to upvote every day. Right now, the most profitable thing to do is to make default 50/50 posts due to the broken SBD dollar peg. It is also very likely that the low delegation prices are caused by the same broken SBD peg as people try to get as much SP as possible to acquire more SBD.
Below we show that the delegation pool is still profitable due to the price of SBD. The price of one STEEM (as given by the witness price feed) is $3.94 and the price of one SBD is $5.47 as given by the coinmarketcap. Now lets do some calculations.
So as before, 20 STEEM would get You 500 SP for 28 days. One person can have a maximum of 10 upvotes at full voting power a day. At 500 SP, one upvote is worth $0.14 (as noted by the steemit.com website) and thus 10 upvotes would be worth $1.41. This means that in 28 days your maximum potential payout is $39.48.
But this is what the steemit.com website shows You. If You post a default 50/50 post, then half of the sum is given to You in SP and another half in SBD. This means that You get 19.74 dollars worth of STEEM (5.01 STEEM) and 19.74 SBD. But the price of 1 STEEM on the internal marketplace (accessed by clicking the small arrow next to Your SBD amount and selecting "MARKET") is 0.829059 SBD. This means that the 19.74 SBD is worth 23.81 STEEM. So in total You earn 28.82 STEEM for the investment of 20 STEEM. That is an whopping 44% more than the 20 STEEM you put in. Lets recap:
20 STEEM --> 500 SP --> $0.14 * 10 votes * 28 days = $39.48 --> $19.74/$3.94 STEEM + 19.74 SBD --> 5.01 + 23.81 STEEM --> 28.82 STEEM
So, as You can see, the price of SBD has caused the delegation prices to fall (meaning You get less SP per STEEM) while also made the payouts of the posts worth a lot more. As of this moment, the delegation pool is still very profitable, provided that You make all Your posts the default 50/50 payout.
There is one big problem. Our initial idea did not depend on the price of either STEEM or SBD to be profitable. But with the open pricing of delegations, all of our today's calculations are dependent on both the price of STEEM and SBD. This means that You must be careful when subscribing to @MinnowPowerUp pool as the profitability will change with the prices. If the prices differ a lot from the ones we used today, then please redo the calculations yourself.
We hope that this clarifies the situation with the @MinnowPowerUp pool and it's profitability. We will keep an eye on the average price of SP delegations and try to adjust them so that they would still be filled fast enough while not being underpriced.