How to calculate curation APR for tribe tokens ?
After my last post somebody asked me on Telegram to explain how I calculated APR for curation of tribe tokens. I started to answer and soon realized that it would be easier to write a post about it. Here you have the according post...
I think there isn't only one way to calculate the APR for curation and probably the results might also differ from one way of calculating to another. I will present you one way of doing and also supply the resources where I take the information from.
The indicators
I will need several indicators to make the calculation. Here again it's possible to find these indicators in other places. What is important is that I select one single account to make my calculation.
As an example, I will do it for the token CTP with my specialized account @achim03.ctp
The stake in the tribe token (stake)
This is the effective number of tokens that I have staked. To this number I add the stake that is delegated to me and deduct the stake that I have delegated out. I don't really know how to deal with pending unstakes because I don't know how they affect the results. So I try to avoid to calculate the curation APR with an account that has pending stakes.
I can find this information in https://tribaldex.com/wallet/
For our example:
The account has a stake of 18'806 token, 3417 tokens incoming delegations and 11'000 outgoing delegations. The stake that is voting is therefore: 18'806 + 3417 – 11'000 = 11'223
The voting stake
Now that we have the effective stake we need to multiply it with the voting power that the account has in the tribe token that we want to analyse.
For that I can have a look at the front-end of the tribe. To get the voting stake, I need to multiply the voting power with the stake.
The front-end for the CTP token is ctptalk.com. I can find the information on the top right. In this case it is 96.22%. The voting stake is therefore: 11'223 x 96.22% = 10'798
It's important to take the voting power from the front-end of the tribe and not from peakd or hive.blog because there you would get the voting power in Hive and not in the tribe token.
The vote value
Still on the front-end of the tribe I give now a full upvote with my account and I see the estimated value of my vote.
If I give a full upvote with my account, the value I give to the post will be 2.730 CTP
The calculation
I have now all the indicators necessary to calculate the APR. However, I also need to know the percentage of the post rewards given to curation. I couldn't really find a place that gives this information. Most of the tokens have a 50/50 split. CTP has a 60/40 split.
To calculate the APR, I first look at how much my votes would generate value over a whole year. I could give 10 upvotes per day every day of the year. 40% of this value (for CTP) would come back as curation rewards.
Income curation rewards = Vote value * 10 * 365 * 0.4 (or 0.5 if the split is 50/50)
In my example it would be 2.730 * 10 * 365 * 0.4 = 3'985.80
Next I can calculate the final APR for curation:
Income curation rewards / voting stake
For our example it would be 3'985.80 / 10'798 = 36.9 %
This calculation isn't extremely precise because the value of the payout might evolve over the payout period. In my opinion it can be considered to be a good indicator to evaluate the curation APR for a certain token. This can give you an answer for example whether it's more profitable to curate with your stake or to put your tokens as liquidity in a Diesel Pool.
Will you try to calculate the curation APR of a certain token? If you do, please share your results in a comment.
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APR for curation = Income curation rewards / voting stake. wow! now it certainly becomes much easier to calculate! Great Thinking !1UP
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I don't really pay attention too much to the curation APR because growth is growth. Wouldn't you want to pay attention to how much voting power you have available? I think you lose out a bit if you vote the further you vote away from 100%.
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If you vote with low voting power, you actually take gains from the future. The only time you really lose out is when you let the voting power stay at 100%.
I think I have heard differently from some other people. I think you naturally lose a tiny amount for voting further away from 100% but you definitely lose more if you let it sit at 100% without using it.
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Nice post! Have tried to calculate for some tokens in the past, but I also realise it changes with time (lower APR as the supply increases), so I think any figures can only be taken with a rough reference.
Aside from that, I think the price of the token is also an important factor, if the token price keeps dropping, even if the APR is high, it's not so good either.
This is a very good point. If you just look at the APR it doesn't give the full picture of a token. A high APR can also mean a very big supply increase which will have a negative effect on the token price.
I vote a lot. ON posts, on comments, whenever I can. 100%. THe only time I take a break for a while is when my VP gets below 20%. I can't remember the last time my VP was at 100%!!!
I like to keep it at 50%, but I've been curating a lot more since joining ListNerds... which is why I'm up voting THIS post.
I try to keep the voting power between 80 and 90% to get a sustainable of amount of votes every day. The only mistake that we can do is to leave voting power at 100% or to vote with less than 100 HP (because of the dust effect).
80 - 90% is optimal for curation for sure... I figure massive upvoting is optimal for good will and personal reputation (which is the real currency on HIVE). My votes are not quite as valuable (about 0.05), but dropping nickels all over the place is appreciated! I give 100%, 100% of the time, so yes my voting power is rarely above 50%. Also, I believe VP is a measure of gratitude. Just a different way of looking at it.
I also suggest @dustsweeper for those low-value upvotes on comments. Send them some HIVE and dustsweeper will automatically add a vote to bring you over the edge so you can collect your DUST! It adds up over time. Dust sweeper discord: https://discord.gg/TTaM7SJc6e