Hello EDSIers, back in March, we held a vote to decide if and what we should change the EDSI model based on things changing within HIVE and HP income declining. 48 token holders voted and the result was to reduce the income pool from being equal to 12% of the eddie-earner HP balance down to 9%. This means a smaller income pool but more growth, which is better long-term. You can see the post here for full details.
In this post, we'll look at why the locked income pool is not working, future projections of getting back to the EDSI model and the date when we will make the switch from the locked income pool back to the EDSI model. We have also experienced a recent HF that decreases HIVE inflation, impacting our future curation rewards.
When the result came in, the plan was to drop down from 12% to 9% which would have been a 25% decline. I thought that locking the income pool to 335 HIVE, what it was at the time and waiting for the 9% amount to be worth more than 335 HIVE would have been easier on token holders compared to taking a 25% hit in 1 week.
On paper this was a good idea, but in practice, it's not working that well and when I run projection simulations on Excel and looked out a few years, I saw it had a bigger-than-expected impact on growth for the project. I hold my hands up and admit, I've made a mistake and locking the income pool is not part of the EDSI model. We should have taken the 25% hit when the results for the vote came in and moved on with our goal of getting to the EDSI Flip as fast as possible.
The figures shown under the 335 HIVE Pool column are from this week and the 9% model figures are based on these.
| With 335 HIVE Income Pool | Based on 9% Income model | |
|---|---|---|
| EDSI APY | 18.01% | 14.25% |
| Weekly APY Decline | -0.12% | -0.02% |
| Weekly HIVE Pool | 335 | 265 |
| Weekly HIVE Powered Up | 405 | 475 |
| Weekly EDSI Minted | 450 | 450 |
| EDSI Mintage Deficit | -45 HIVE | +25 HIVE |
Working from top down, the first thing you'll notice is that the EDSI APY drops abit in the 9% model, not good but if you look 1 row down, you'll also notice that the weekly APY decline is much less as well. This makes the EDSI APY more stable and x6 times closer to the EDSI flip. The weekly income pool would drop from a locked 335 HIVE down to 265 HIVE and then increase a little each week as it used to before we locked the pool. Less being paid out to token holders means more being powered up and compounded into the wallet balance, increasing growth. The amount of EDSI being minted remains the same, but the mintage deficit goes from being negative to being plus and thats the key for growth. If you're wondering what the EDSI mintage deficit is, it's basically
"HIVE powered up minus EDSI minted".
Currently, we power up 405 HIVE a week after paying the 335 income pool, and we mint 450 EDSI each week. Because each EDSI token is backed with 1 HIVE, we are 45 HIVE short per week. The deficit is supported by the surplus HP balance in the eddie-earner wallet. After we move to the 9% model, we will be powering up more HIVE than minting EDSI tokens.
Let's zoom out and see how things will look on the 9% model
9% Model - 20 Year Projection based on current incoming/outgoing & EDSI mintage
| Timeline | EDSI Circulating | HP Balance | Weekly Power Up | Weekly Income Pool | EDSI APY |
|---|---|---|---|---|---|
| Today | 97,038 | 153,677 | 414.17 | 265.06 | 14.25% |
| 6 Months | 108,738 | 166,556 | 514.72 | 287.28 | 13.79% |
| 1 Year | 120,438 | 180,513 | 557.86 | 311.36 | 13.49% |
| 2 Year | 143,838 | 212,036 | 655.28 | 365.73 | 13.27% |
| 3 Years | 167,238 | 249,063 | 769.71 | 429.59 | 13.40% |
| 4 Years | 190,188 | 292,556 | 904.12 | 504.61 | 13.81% |
| 5 Years | 214,488 | 343,645 | 1062.01 | 592.73 | 14.46% |
| 10 Years | 331,038 | 768,440 | 2374.80 | 1325.44 | 20.89% |
| 20 Years | 500,000 | 3,806,952 | 11,874.83 | 6627.66 | 69.14% |
- EDSI APY flip takes place in 3 years and 3 months with EDSI bottoming out at 12.61%
- EDSI will hardcap after 15 years and 2 months based on current weekly mintages
The above numbers are based on everything staying as it is now. The bottom is lower than expected at 12.6% but as a passive way to earn HIVE, still better than holding HP to earn 9% from curation plus 3% from HP inflation. Plus EDSI pays liquid HIVE, not HP as income and no 13-week powerdown either. Im sure the recent HF will have some impact on these projections, but we have to wait and see the damage.
When you look at the EDSI market on HE, there is not much action and exit liquidity could appear to be an issue, but we recently had someone sell off their almost 10% share of EDSI tokens into the market in under a week, so exit liquidity is there. If you list them for sale at 1 HIVE and wait, the order will get filled and much faster than 13 weeks plus 5 days.
Changes in the future
We also still have alot of EDSI tokens to allocate to people through EDS miners, eds-vote and eds-d. Both eds-vote and eds-d are over allocated so chances are, we will launch one more EDS token to distribute more tokens faster. This final EDS token might not been launched for another 2 years based on market conditions but when it is, a few things will change. Main thing is the hardcap will get closer and thats when real growth starts, as we're no longer needing to back new EDSI tokens.
The goal for me as the operator is to get us to the EDSI flip as quickly as possible, and then after that, get us to hardcap as quickly as possible. After that these 2 things are done, it's all gravy, and we pretty much just sit back and collect ever-growing income payments.
Starting from next week, you will notice a decrease in your EDSI HIVE payment. This is us getting back on track, back to the core model game plan.
