Do you have SteemPower (SP) that you are not currently utilizing or not going to be active in the community due to other circumstances that require your time? If the answer is yes to the above questions then you should think about leasing your SP.
Leasing your SP allows another user to temporarily boost their SP and use it for a specified number of weeks varying in term usually from 1-24 weeks. When you lease your SP you get compensated in the form of Steem "Interest" for the term of the lease! The compensation and rate of return are set up front and the user leasing the SP pays up front and the Steem "interest" paid is distributed to you daily over the term of the lease.
There are many leasing platforms out there but the one I use is called MinnowBooster. Currently I have around 1,900 of my SP leased at rates of return averaging 18% annualized. This means that on an annualized basis I will earn around 342 Steem on my 1,900 of leased SP.
The minimums for leasing can be anywhere from 10 SP to in the thousands which means that pretty much anyone can benefit from this service. I currently look for leases around 1-8 weeks so I do not lock up my SP for to long and I also only lease about half my SP as I want to maintain voting power.
So how do I get started?
Goto https://www.minnowbooster.net/ and click on the "Market Requests" tab which will show all of the active lease offers from other users and what rates they are willing to pay you for a certain amount of SP over the term of the lease.
Once you click on the tab you will come to a list of all current lease offers that you may fill. Each offer varys in term and the amount of SP required. The image below shows a few leases but the SP on these is high and you can sort based on the various SP amounts requested so you can see all of the lowest amounts or highest etc. You can also filter based on any of the other criteria to find the lease that fits exactly what you want.
Below I have sorted the lease requests by highest rate of return and found a lease of 400 SP that I would like to fill at 19% for 4 weeks. What you do now is click "Fill This Offer" and you can then fill the offer using SteemConnect. Once the offer is filled you will earn 19% for 4 weeks then the SP will be returned to you after a 5 day cool down period meaning after the lease ends it takes 5 days for the SP to be back in your account to delegate again or use for other purposes.
Now that I have completed the lease using SteemConnect I will receive daily interest payments in Steem from the lease for the 4 weeks and the the SP will be returned to me 5 days after the lease term is up.
So what could leasing SP look like if you continually lease starting out with 1,900 SP over 5, 10, and 20 years? Assuming you reinvest all earnings here are some calculations for illustrative purposes only:
1,900 for 5 years at 18%:
1,900 for 10 years at 18%:
1,900 for 20 years at 18%:
Now a very important point to remember is that the calculations above are done in Steem so your USD returns could be much better if Steem goes up in value or much worse if Steem goes down in value. (The calc pictures say USD but it is really Steem - the calculator just has USD as the currency it uses)
For example if Steem is at a price of $.50 when you bought your 1,900 of SP and $1 when you sell it in any one of the time frames above your rate of return will be much better than 18%. Lets say the opposite is true and Steem price declines to $.25 when you sell in any one of the time frames above your rate of return will be much worse that 18%. That is one of the main risks that you take on when leasing Steem like this and is one of the reasons rates are very high.
Leasing SP does not give up your price appreciation potential of Steem(SP) as the same amount of SP is returned to you at the end of the lease at the market price of Steem so you will not miss out on any appreciation. The downside is that the longer leases lock up you SP so if you want to sell you are not able to during the lease period. This could be bad if you want to get out if prices tank or need cash flow immediately.
Leasing SP offers Steemit users a great way to earn very high returns on their SP! As Steem is a Crypto that can be volatile this is definitely more risky than earning interest at a bank but may be worth it if you can afford to take the risk.
One last bit of info I want to give you is an easy way to monitor all of your leases or delegations of SP. You can use the following website to see a listing of all of your active leases in one place. You will need to put your account name after the / in order to get to your personal stats.
https://steemworld.org/@"yoursteemit name"
Below is a screenshot of some of my active leases from the site above.
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Disclaimer:
This article is for information purposes only and is not legal, financial, investment or tax advice. Everyone should consult and independent adviser before acting on any of the items discussed in this article as they involve a high degree of risk.