Leasing Hive Power
I heard about dlease.io a long time ago. Well, I only joined Hive in September, but I heard about dlease fairly early on.
There are two ways that you can use dlease. One is to take a lease of Hive Power, and the other is to delegate a lease of Hive Power (HP). What are the potential costs and benefits to doing these? Maybe it is obvious to you, but it took me a little while to figure it out, so I thought I would write about it.
When you lease HP, this means that someone delegates HP to you for a fixed period of time at an interest rate (paid daily) that is pre-arranged. When you delegate HP, it is the same, but you are the person doing the delegation at that rate of interest.
The listings on dlease.io are for people who would like to receive lease delegations. It is quite simple to lease out some of your HP. You just click on “delegate,” and follow the prompts.
The leases currently available:
Is it Worth it?
First, is it worthwhile to lease out some of your HP. If you don’t plan to curate for a while, it is obviously worthwhile. However, if you enjoy curation (as I do) then you really have to ask yourself whether there is a benefit.
I wondered what percentage I am currently making on my curation. To find out, I went to hivestats.io and input my Hive userid. At that point, I discovered I was making 7% as a curation APR. I see now that it is 11.18%. Is that a result of the lease or just improved curation lately? I don’t know how they do the calculations. I assume that the lease would not affect the curation calculation yet, so I think I have improved my curation, which makes me wonder whether the leasing experiment was foolish. However, it was temporary, and it is interesting to try new things.
My hivestats:
Anyhow, based on the 7%, I delegated leases, a 200 HP lease at 11.71% for a month, and three 50 HP leases at 11.63% for 8 weeks. I have not often seen such a high percentage of return, so I thought if I was going to try it, this was the time.
The leases I delegated:
If my curation percentage is 7%, delegating these leases gains me about 4.63+% for the length of the lease (prorated per annum). However, if the new curation percentage is correct, I did not win much by this delegation. Either way, these are not very large amounts of money nor are they long periods of time, so this is an experiment.
Is it worth it? We shall see. I am interested to see how it plays out.
Would it be Worthwhile to Lease a Delegation?
When might it be worthwhile to lease a delegation? I suppose anytime you wanted more HP for whatever reason, it would be worth it. It is a way to see what it is like to have more HP before investing in having the HP.
However, can you profit from it? I think you can, but you have to choose your terms carefully. If you offer a lease at 11% or more like the people to whom I delegated, I think it might be challenging to profit. From what I understand, and I have read this in a few places as well as doing a few calculations that support it, it is difficult to make more than about 12.5% in curation.
If you are an excellent curator, leasing, even at 11% might yield you a small profit. However, there are many leases at 6%, and those might be more reasonable in terms of making a profit because if you diligently curate and your curation rate is 10% and then you lease HP at 6%, the 4% difference will be profit. Of course, if you get sick and end up not curating for the month, you will lose in this scenario, or if your curation efficiency goes down for some other reason, again, you will lose.
In practical terms, if you leased 1000HP at 6% for four weeks and your curation rate was reliably 10%, you would pay about 0.164 Hive per day for the lease and you would make about 0.274 Hive per day, which would be a profit of 0.11 Hive per day. Over the four weeks, that would be 3.30 Hive. Of course, you could lease more, and then the risk would be commensurately higher.
You really have to know yourself, your curation ability, and your risk tolerance to get into that sort of deal.
Conclusion
The experiment is ongoing. I am a bit tired of reading “this is not financial advice.” Do we all know that we are not giving each other financial advice? Even so, I suppose the legal caveat is necessary (and so this isn’t, of course… financial advice, that is.)
I find it fascinating how many different projects are going on all over the HiveVerse. I am trying to experiment and learn about different aspects of Hive. Are there Hive secrets that you know that you think few people are aware of? I am interested!
I believe that this little leasing delegation will not be very profitable for me, but I doubt it will result in a loss, and it is interesting to see how the mechanics work firsthand. I find that, for many things in the cryptoverse, it is hard to fully understand them until you try them, which is both exciting and a bit dangerous.
For example, I did not understand liquidity pools until I had experimented with and lost money in a few different ones. Maybe it is just my style of learning, but I actually think it has something to do with crypto as well since I tend to be a person who learns well from books and theory, but with crypto, I learn best from aping in with very small amounts to begin with (usually).