I know many of you are thinking, how is it possible to get 48% APR on Hive with Ecency, or even with most coins out there in the market?
Hmm, let me share how I derive that number. So about one month ago, on 11 Dec 2022, I decided to delegate 50 HP to Ecency out of curiosity to see how much it would bring me. Here's the daily curation reward share over 30 days.
| Date | Hive Reward |
|---|---|
| 11 Dec | 0.013 |
| 12 Dec | 0.011 |
| 13 Dec | 0.012 |
| 14 Dec | 0.010 |
| 15 Dec | 0.012 |
| 16 Dec | 0.015 |
| 17 Dec | 0.015 |
| 18 Dec | 0.014 |
| 19 Dec | 0.014 |
| 20 Dec | 0.012 |
| 21 Dec | 0.011 |
| 22 Dec | 0.013 |
| 23 Dec | 0.013 |
| 24 Dec | 0.013 |
| 25 Dec | 0.009 |
| 26 Dec | 0.010 |
| 27 Dec | 0.008 |
| 28 Dec | 0.009 |
| 29 Dec | 0.010 |
| 30 Dec | 0.012 |
| 31 Dec | 0.010 |
| 1 Jan | 0.013 |
| 2 Jan | 0.013 |
| 3 Jan | 0.014 |
| 4 Jan | 0.012 |
| 5 Jan | 0.012 |
| 6 Jan | 0.013 |
| 7 Jan | 0.012 |
| 8 Jan | 0.012 |
| 9 Jan | 0.014 |
| Total | 0.361 |
From the data collected, let's roughly assume the monthly curation reward share is about 0.361 Hive. This would work out to be 8.66% (0.361 x 12 / 50) APR for a 50 HP stake.
So where's the extra 40% APR?
For those who are not unaware, for a 50 HP delegation, you get 5 Ecency points everyday. This means after 1 month (for simplicity, let's assume 30 days), you get 150 (5 x 30) Ecency points. 150 Ecency points will give a boost that is approximately USD 1 in value which you can use for your posts. But we all know the curation rewards are split 50/50 between the curator and writer. This means, as a writer, you get USD 0.50 per month by utilising these Ecency points and if you annualised this number, you can get USD 6 (0.50 x 12) per year.
So here's the tricky part.. How much Hive would USD 6 be worth? As of last week when I was done collecting the data, Hive was sitting around USD 0.30. If we were to assume Hive is valued at USD 0.30, the 6 USD generated from the Ecency points would give us 20 Hive (6 divide 0.30) annually through the boosts. If our delegation is 50 HP, this would work out to be 40% (20 / 50) APR!
Summing both parts, 8.66% from curation reward shares and 40% from boosts via Ecency points, that gives us a total of 48.66% APR!
Of course, some of you might ask, Hive has gone up in the last few days and it's above USD 0.30 already. Well, let's try to do the math with Hive at different prices to see how the APR changes.
For example, if Hive is USD 0.40, 6 USD would only be worth 15 Hive. If our delegation is 50 HP, this would work out to be 30% (15 / 50) APR.
| Hive Price in USD | APR from Boosts | APR from Curation Reward Share | Total APR |
|---|---|---|---|
| 0.30 | 40% | 8.66% | 48.66% |
| 0.40 | 30% | 8.66% | 38.66% |
| 0.50 | 24% | 8.66% | 32.66% |
| 1.00 | 12% | 8.66% | 20.66% |
As you can see from the table, even if Hive reaches 1 USD in price, the total APR from delegating HP to Ecency would still be around 20%!
So what's the catch?
I think the main catch is, the APR is not totally passive because you do need to write posts in order to utilise the boosts via Ecency points. For every 50 HP delegated, you probably need to write 1 post per month, which isn't too much of a ask actually.
And of course, my analysis above is based on only 1 month of data collection but I think it provides a good estimate of the returns.
Final thoughts?
I have always seen Ecency around giving votes, and have been using the platform and the mobile app. This was the first time I decided to delegate some HP to experiment and check out their returns. I was glad this turned out well and I would definitely add on to my delegation to Ecency in the future! But that's just me - as always, do remember to do your own due diligence.
Hope you like my sharing and thanks for reading!
P.S. Do let me know if you have interesting projects on HP delegation for me to try out too! Hehe!