How to beat the Matthew Effect on Hive
With the move into crypto, many of the old rules and ways of money will change and fall apart. We will no longer need banks, even the central banks will have no relevance to us. They are part of the old world and are dying with irrelevance.
One other rule that you can also beat is the Matthew Effect. This rule was not made by Matthew McConaughey, although for sure he uses it. It is better known as "the rich get richer and the poor get poorer". source
The rich usually get richer because those with money have an advantage over those without money. This allows them to continue being more successful because they can monopolise resources and get better returns than those without much money.
This also makes sense when you think of compounded returns. Once you have built up your wealth snowball, it keeps rolling and getting more significant on its own. You just need to help steer it in the right direction now and again.
You cannot beat these rules... or can you?
I can give you not 1, but 2 examples where I managed to beat the Matthew effect on Hive. And with these examples, you can too! To repeat this ROI% with a larger account would not be easy or maybe not even possible. But for a smaller account or someone new, easily repeatable!
By participating in the We Are Alive Staking Contest back in March, I was able to first beat the Matthew Effect. My starting stake was 0,9 ALIVE but by earning a few ALIVE tokens on hive and buying a few on tribaldex I managed to stake 52,469 ALIVE tokens in a week. This allowed me to win a prize of 352,997 ALIVE. This was a return of 672% in 1 week.
The second time I managed to beat the Matthew Effect was when I participated in the Larry Is Alive competition a month ago and won. This gave me a 1000 CTP delegation to my account. This was far more CTP than I actually had staked to my own account at the time. Therefore, when curating on Hive, the CTP returns generated were >100% as they have generated with no input of capital myself! Of course, larger accounts can participate and get free returns, but as a % of their accounts, the returns were far larger for me!
OK, I've said too much for today. The cat is out of the bag. Engagement and activity in the communities on Hive can boost your returns. But let's keep it between us, you know our thing ;)
To learn more about the Alive On Thursday competition, you can click here.
To learn more about the Larry Is Alive competition, you can click here.
Resources:
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Yeah ,I get your point now ,but I still think the rich will keep getting richer even if it crypto word because returns is calculated in percentage not base on challenge win, and also it's easy for rich to venture into different business on crypto than poor who have low capital budget
,for example on hive we have hbd saving which gave 20 percentage while we have staking HP or providing liquidity on polycub ,it easy for a rich man to diversify into all the opportunity at once but low income can't do it , even if he did it will always bring smaller return compare to the rich man
It is true that once you build your snowballs and let them run, you can start compounding income. But there are ways with Hive to get above-average returns for smaller accounts that the whales cannot and the real return amounts can make the activities not profitable due to time constraints (such as commenting, producing articles etc).
You also need to consider the risks in HBD and providing liquidity in Polycub. A whale needs to diversify to protect his portfolio more than we do. But this also opens him (or her) up to increased risk of losses. As a smaller account we can also diversify on a smaller scale you are right, but it may not make sense due to transaction costs.
Its easier for smaller accounts to grow 2x in a short period of time than it is for a larger account.
Imagine someone with 200hp compared with a whale with 100* of that. *You can double the 200 to 400 in a short period of time compared to someone having 200k hp.
Also, this period is best for building and engaging, especially for smaller accounts with not much resources available to "buy the dip".
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That is exactly right. So to get exponential growth, should we keep having a new account? 😄
Of course, we should.
We need as much as possible, new builders & creators in the game.
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Thats why its so good to show new members of hive how they can get faster growth! :)
Yes.
But small account not much rcs... 🥳
Agree. But there are many projects offering FREE minnow support with delegations and upvoting of introduction pages.
If you are short of RC, you can ask in some chat groups in Discord or Telegram and there is always someone happy to helpout with some RC to a newbie. :)
This is very good analysis. When my account was small, it still is but compare to earlier it's bigger. I could see my roi increase significant, also the price if Hive was over $1. My portfolio doubled in a month, now I can even get a return of 3-5% !
!PIZZA
!BEER
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Keep stacking. You get 3% for doing nothing with Hive. Any extras like curation or authorship are nice bonuses on top you can earn! :)
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great job on your wins, good point.
Another thing to remember is small drips that earn in the future are another great way to get ahead. Stack the snowball, try to always leave the snowball alone, and when it comes time to take any profits take it from what you would have reinvested instead of touching the snowball.
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That's a great tip about the snowball. There are quite a few layer 2 passive income snowballs we can build.
I had not heard about the Matthew Effect before even if I have seen what it describes, and yes the Alive On Thursday staking contest is designed to give a bigger boost to someone who starts to stake, accounts with bigger stakes will earn more in curation rewards instead, enjoy your day and stay !ALIVE
@mypathtofire! You Are Alive so I just staked 0.1 $ALIVE to your account on behalf of @flaxz.alive. (2/30)
The tip has been paid for by the We Are Alive Tribe through the earnings on @alive.chat, feel free to swing by our daily chat any time you want.
It is great initiative for helping onboard new people.
!ALIVE
!CTP
@flaxz.alive! You Are Alive so I just staked 0.1 $ALIVE to your account on behalf of @mypathtofire. (4/10)
The tip has been paid for by the We Are Alive Tribe through the earnings on @alive.chat, feel free to swing by our daily chat any time you want.
40% of my HP is from rewards, which means active participation in Hive based competitions give you a super boost to grow your account, my goal is 1000 HP which is not so easy much anything adds up makes me move up.
But, there is a catch-22 which means market volatility and BTC price, this is a very devastating factor even if you are rich enough, next it could be another Luna. :D
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thats a great result!!!
Very true about catch-22, it Is something maybe out of our hands?
Thank you for burning ALIVE tokens and supporting the We Are Alive Tribe, you have earned 1 tickets for our weekly ALIVE Burning Contest.
!ALIVE
!CTP
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@flaxz - Alive Chat Host
@mypathtofire! You Are Alive so I just staked 0.1 $ALIVE to your account on behalf of @alive.chat. (6/20)
The tip has been paid for by the We Are Alive Tribe through the earnings on @alive.chat, feel free to swing by our daily chat any time you want.
And there are many ways to avoid or overcome the matthew effect.
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for sure! :)
well, it's Matthew after all
https://biblehub.com/matthew/25-29.htm
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i did consider to use Matthew from the bible, as it is also a good reference!
You don't like quotes from the bibel? I see, that's a choice of taste.
I do, i thought it was a good one :)
Thanks for the tip to become more effective on hive and to make profit here. At least now I know about the Matthew's effect.
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