Hello SPIers, I have 3 ideas for posts and im not sure which one to write about. So it's between 1/ talking about creating a SPI squad, 2/ explaining how SPI makes money from EDS or 3/ a LISTNERDS update.
1/ I'd like to launch a SPI squad which is basically a top-level SPI investor. Anyone holding more than 1000 SPI's would get some cool stuff from time to time. SPI merch, personalized yearly reports, etc, etc
2/ I dont think if ever wrote a post to explain what EDS does for SPI and I've been thinking about it lately because it's pretty interesting.
3/ I've been killing it on LISTNERDS, we have a top 20 wallet and I think we have the 2nd highest reputation within the platform, haha.
I guess I feel like......writing about... EDS most right now. The other 2 can wait, there's no rush.
What's EDS's relationship to SPI?
EDS (
From the outside, EDS should look like its own project on its own feet with its token and saving club but it's very much embedded into SPI. I've always called EDS a subsidiary but from the backend view, it could be viewed as an arm of SPI that directly feeds into it. If EDS powers up 10k HIVE, both EDS token holders and SPI token holders gain from this.
The @eddie-earner wallet
This wallet is owned by SPI with the promise that each EDS issued is worth 1 HIVE/HP. There are currently 26,000 EDS in circulation and the wallet holds 62,000 HP we can back each EDS comfortably even when we factor in that miners create 10,000 new EDS each year.
Here's the part some of you will know but most I guess will not. SPI owns any HIVE/HP from the EDS wallet that is not being used to back an EDS token. So today, there are 26,192.86 EDS in circulation and the EDS wallet holds 62,572.61 HP so SPI owns 36,379.75 HP from that wallet (minus 4,800 HIVE from operational costs).
The kicker is EDS actually runs at a small paper loss each week of between 80-140 HIVE each week. This sounds bad but it's only the cost to SPI from profits. It's paper losses because the holdings to SPI are paper holdings. This is not something simple to explain, let me try.
Each week EDS miners mint 196 EDS into circulation and each EDS is pegged and backed by 1 HIVE/HP. This costs 196 HIVE
The weekly income payment needs to be paid each week. This costs 143 HIVE
The total cost to EDS each week to back new EDS tokens and issue HIVE income payments is 339 HIVE.
Total income from leasing HIVE POWER, content and airdrops averages between 200-260 HIVE each week.
This results in an 80-140 HIVE per week loss that is absorbed by the EDS HP balance.
SPI might own 36,379 HP from the EDS wallet but if no miners are being sold, this will decrease as more EDS are being minted every day. There is a time when a flippening takes place in roughly 4 years from now when the EDS account will produce more than it costs each week to operate sustainably for a long time, a very long time. EDS miner's rewards are set and will not increase as the EDS HP balance increases. After enough time, our leasing rewards will overtake our miner plus income payment costs each week and then we're set for as long as HIVE lasts, decades are whatever.
EDS token holders earn from the HP balance
SPI token holders own the HP balance not being used to back circulating EDS
WHY?
Paper profits baby. From my POV, it makes no difference to EDS token holders because they are gaining from the HIVE POWER with weekly income payments equal to 12% APY of the HIVE POWER balance. 12% of 62,000 equals 28% when split among 26,000 EDS tokens. As the HP balance increases so does the APY of EDS tokens. Technically SPI as the owner of the EDS project owns the remaining HP and it is used to back the new EDS being created. If I were to use a buzz word we could say SPI's 36,379 HP in EDS is a treasury fund that is used to back EDS tokens created from EDS miners.
The HP in the EDS wallet is powered up for life so we will never actually see it liquid in the SPI wallet. An EDS liquidation could take place but it's very very slim. As it's part of SPI, I include it within the SPI report in holdings. I have been doing this for a very long time so anyone that checks the weekly report will probably have seen this before. If you wondered what it meant, now you know.
EDS going forward
The first thing to do is issue the remaining 11,000 EDSMM tokens that produce a minimum of a 20% ROI per year, currently 33%. They only cost 1 HIVE each and i have reserved mining rewards for 25 years. This will push the EDS HP balance to over 73,000 and EDS APY to over 31%.
I will up the leases to bring in more HIVE and will continue to create 2 posts per week and convert everything that is received and is not HIVE into HIVE and then into HIVE POWER. All content rewards, tribe tokens and airdrops/claim drops are converted to HIVE and powered up.
The growth model is based on only leasing & inflation earnings from the EDS HP balance (excluding content and airdrops) The target is to earn 16%. 12% is paid out as HIVE income payments and 4% is compounded to ensure income payments are always increasing over time. We currently earn 15.2% from leasing rewards and 2.87% from HP inflation totalling just over 18%. EDS is paying out 12% and compounding 6% so above target and winning.
Content and airdrop rewards are a cherry on top. You can see above that a simple project can be sustainable long-term by having a few rules in place.
1/ Convert everything that is not HIVE into HIVE and power it up
2/ Pay out a 12% APY of the
3/ Compound everything remaining into HP
It'll take a few years but with time income from HP will overtake EDS being created by miners and EDS will be able to operate fully automatically with a few lines of code. I mean like for me, set and forget, no more work. Just collect the weekly HIVE income. I create projects I what to invest in but dont exist yet on hive-engine. When I created EDS, it was because I wanted a good HIVE income token that had solid foundations and was set up for the long run. That's why I created SPI as well, I wanted to invest into a fund token on hive-engine but there were none so I made to the best of my ability what I wanted.
For EDS, I do have other plans and ways to issue more EDS tokens to help increase the EDS HP balance into 6 figures but there is no rush and my plans are only rough. I will wait until all the EDSMM miners are issued and that might take 4-6 months at the longest I guess. I'll do nothing for 2-3 months and just watch the numbers and we'll get a good idea of how EDS APY's are affected when not issuing miner tokens and bringing in lots of new funding.
Im, not 100% sure what the next thing will be for EDS after miners are sold out but it'll not be another miner. I have a few ideas but have not looked at everything on paper yet because what I'll know in 6 months might help me create a better way to issue EDS tokens. I'd like to do something fun.
I invest in my own projects and I build them to be sustainable because I dont wanna screw myself long-term 馃槀 This is one of the reasons everything under SPinvest is fully backed by assets.
Let's about all I can think of writing right now about how EDS operates under SPI. As I said, I can't remember having written a post about this before so i hope a few of you have found it interesting.
Thank you for stopping by and checking out the post, have a good day.