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No, It's Not More Profitable To Go 100% Power Up Once SBD Is At Parity With STEEM by dragosroua

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· @dragosroua ·
$25.01
No, It's Not More Profitable To Go 100% Power Up Once SBD Is At Parity With STEEM
Every time SBD goes back to the same level of STEEM, a position which I call "being at parity", there is this trend among Steemit authors that it will be more profitable to take your rewards in 100% Steem Power.

Everybody has the right to choose and implement his own strategy about his Steemit activity, so please don't take this as a "the ultimate truth", but rather as a way to see which ROI is better, based on market conditions.

So, let's make some calculations (again...). I'm gonna use [this rewards algorithm](http://steem.supply/rewards), taken from my site *steem.supply*.

# Suppose Your Post Made 10 in STU

Here's a visual breakdown of your rewards, if you choose 50% / 50%, _at the current market prices_:
***
![Screen Shot 2018-03-04 at 7.17.03 PM.png](https://steemitimages.com/DQmXgJqjB8v25TLy6fPPiVoVCtfcvfpL2ZtZHXYLF3AkrAA/Screen%20Shot%202018-03-04%20at%207.17.03%20PM.png)
***
So your overall profit is $17.14.

Whereas if you would have choose 100% power up you would have made $7.5. Because, if you choose 100% power up you are paid in the Steem Power _worth of dollar_. 

So if STEEM would be $3.51, you would get 7.5 / 3.51= 2.13 SP.

# When Does It Get Profitable To Use 100% Power Up?

Again, the same page comes to the rescue. I just put the SBD slider in the $1 position, and here's what you'd get if SBD would trade at around $1:
***
![Screen Shot 2018-03-04 at 7.32.37 PM.png](https://steemitimages.com/DQmaz6j31ziEA6jSEvJRXKprk7DtTcDGkVHxn2r2z7kpHEo/Screen%20Shot%202018-03-04%20at%207.32.37%20PM.png)
***
At this point, the amount shown near your posts in Steemit will actually be real. So if SBD trades at - or below - $1, then it's pretty much the same thing if you get it 50/50 or 100% power up. As long as SBD stays above $1 you get better ROI.

Please keep in mind that SBD _was designed_ to be at $1 and what the markets are doing right now is pretty much an anomaly from the Steem governance point of view (but something very real from the point of view of the market, who is always right).

Feel free to play with the sliders at the page mentioned above to test various scenarios.

Steem on!
***
_I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at [Dragos Roua](http://dragosroua.com) where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua._
<center>
![Dragos Roua](http://dragosroua.com/wp-content/uploads/2014/05/bamf-e1448824881306.png)</center>
<hr/>
<center>
<h2>Wanna know when you're getting paid?</h2>
</center>
<table width="100%">
<tr>
<td width="50%" align=left>
<img src ="https://steemitimages.com/DQmY5EgrAesnAbWyBazuHaA2Rqb2y9kkJjX4SkGq4NqA9b1/Screen%20Shot%202018-02-16%20at%2011.30.44%20AM.png" width="250" heigh="100">
</td>
<td width="50%" valign="top">
I know the feeling. That's why I created <a href="http://steem.supply" target="_new">steem.supply</a>, an easy to use and accurate tool for calculating your Steemit rewards
</td>
</tr>
<tr>
</table>
<center><h2>It's free to use, but if you think this is a useful addition, I'd appreciate your <a href="https://steemit.com/~witnesses" target="_new">witness vote</a>.</h2>
<h1>Thank you!</h1>
</center>

<center>
# Psst: new to Steemit? [Start Here](https://steemit.com/@dragosroua/the-7-fundamental-questions-about-steemit)
</center>
👍  , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , and 21 others
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vote details (85)
@aarbi ·
i think you are right buddy.. agree with you.
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@afdhal ·
Hhmmm nice information, your information can help us, thank for your share guys.
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@akintunde ·
$0.15
So many people don't know this, they keep posting with full sp rewards and they feel they are doing the best. Good one @dragosroua.

Resteemed! They need to know.
👍  , ,
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vote details (3)
@blazing ·
50/50 seems like is the only option left forever now after all the mess up in prices hahaha
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@blog-beginner ·
I want SBD to rise above steem so that I can convert my SBD to steem. I'm waiting since long now.
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@cflclosers ·
$0.13
I was literally just wondering about this so this post is perfectly timed. I would have guessed otherwise so I'm glad I saw this!
👍  
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vote details (1)
@cutiepie ·
after so many months it is down this has to happen at least after so long
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@deanlogic ·
$0.38
> Please keep in mind that SBD was designed to be at $1 and what the markets are doing right now is pretty much an anomaly from the Steem governance point of view (but something very real from the point of view of the market, who is always right).

And the witnesses that don't work to get SBD back to $1 shouldn't be given votes.  And witnesses that have bid bots should not be witnesses. 

But, I'm just a little minnow.
👍  , , ,
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vote details (4)
@gduran ·
I'm OK with SBD as high as it can go. I agree with the bid bots.
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@deanlogic ·
$0.14
STEEM can go as high as it can go.
SBD going high as it goes defeats the purpose, so we should only reward out in STEEM and Steem POWER.  Then SMTs can take over for SBD.
👍  ,
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vote details (2)
@golddeejay ·
$0.08
Truth be told, most minnows including will want the SBD to go as high as it can get. That is more reward at least at the initial stage and help many of us who want to build the real thing - steem and steem power.


I remember I can get as high 3.5 SP with one and reward I get. I am knowing the worth of that now that I get 1 SP for 1 SBD at most.

So I say...SBD to the ceiling first, then Steem to the moon.
👍  
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vote details (1)
@jasonshick ·
$0.13
It’s not the witnesses job to keep sbd at $1. The market determines the price. You need to remember a lot of the sbd is on the exchanges where buyers and sellers determine the price.
👍  
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vote details (1)
@dragosroua ·
$0.15
I dare to disagree. I think witnesses should do whatever they can to keep the system balanced and in good order. In this specific case, because SBD is a debt based asset, a significant imbalance in it - as natural as it would be, being established by the markets - will dramatically affect the entire economics of Steemit and the value of STEEM.

As @deanlogic pointed out, it's ok to have a gazillion other assets on top of the blockchain, each with its own inflation and rewards pool, as long as they're not debt-based, like SBD. I would say the SBD design is a legacy flaw that must be carried over, somehow.
👍  , ,
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vote details (3)
@gee1 ·
$0.15
I keep telling newbies this. 

I have always preferred 50/50 payouts. My strategy is to convert my sbd to steem and then power up instead of using the 100% SP. 

Thanks for throwing more light on this. 
👍  , ,
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vote details (3)
@golddeejay · (edited)
$0.07
It's about taking time to do some calculation. For now 50/50 is the best deal for going full Steem Power.

Until SBD comes crashing to $1, which I personally don't want because I am all about building steem power.
👍  
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vote details (1)
@gillianpearce ·
$0.15
So basically I don't even need to think about this unless SBD drops below $1.

I still don't understand why it's so important for SBD to be at $1. As someone else said, shouldn't the market decide rather than witnesses? Apologies for my ignorance as usual! &#128522;

But, let's say that Steem stayed where it is and SBD went to $10. Apart from the fact that a lot of content creators would be very happy, what would be the consequence of that?
👍  ,
properties (23)
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vote details (2)
@charitybot ·
They seem to have been dead-set on creating a "stablecoin" even though they are always destined to fail.  Bitshares/BitUSD in the past, and now steem/SBD, and I'm sure EOS will have its own weird stablecoin implementations especially considering they're working with Bitfinex now, who are the Tether stablecoin creators as well.
👍  
properties (23)
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vote details (1)
@gillianpearce ·
I din't realise there were other "stablecoins" created @charitybot. I thought SBD was the only one. I've so much to learn! &#128522;

Thanks for the info.
properties (22)
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@dragosroua ·
The idea is to have, like @charitybot says, a "stable" currency, which is very important in certain businesses. Like e-commerce, for instance. If you use a volatile means of exchange, you can't really make e-commerce, because the supply chain will explode. On the other hand, a volatile token will please a lot of traders (or should I say speculators) specifically because it's volatile.

It's a tradeoff. And while I don't think there is a perfect "stablecoin" mechanism out there, I'll do my best to support the one I'm using now, as a witness.
👍  
properties (23)
authordragosroua
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vote details (1)
@gillianpearce ·
Oh. I see @dragosroua. I understand the trade off now.

That has answered a question I had about why anyone would sell goods using crypto as a currency when it is so volatile. I just couldn't see how it would work. But now I see that that is the point of SBD.

So the bit that really remains to be seen then is, whether or not, SBD can truly be pegged to the dollar. There seem t be those who believe that it can't.

I've taken a step forward today in my understanding of this. Horrah! and thanks. &#128522;
properties (22)
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@hms818 ·
$0.26
Thanks @dragosroua for sharing these amazing stats of SBD and STEEM, was very knowledgeable..
👍  ,
properties (23)
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vote details (2)
@isaacbanks ·
The several factors affecting crypto is also affecting sbd and sp. I believe that the rise in sbd and sp will enable steemians to enjoy more reward for sbd and sp made. So up sbd and fly sp
👍  
properties (23)
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vote details (1)
@isnochys ·
$0.14
Hmm.. Do.. Shouldn't we as witnesses force SBD to $1?
And report back the SBD value and not the USD value, when updating the SBD feed?
Because currently it doesn't work as designed, it seems..
👍  ,
properties (23)
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vote details (2)
@dragosroua · (edited)
A few witnesses, me included, are raising their bias, which means more SBD is printed, which means its supply goes up, which means its price will eventually go down. If you follow my weekly witness updates, you'd be already knowing this ;)
properties (22)
authordragosroua
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@jasonshick ·
$0.13
For users that have been here a while, this is a fairly easy concept to understand, not sure how to make it any simpler, if SBD is above $1, then always take rewards with a 50/50 split
👍  
properties (23)
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vote details (1)
@krenter ·
$0.15
The only scenario in which I see a good option the power up 100%, is when the price of the steem and the SBD is less than 1 USD and its parity is less than 1

Suppose that the steem and the sbd have a price of 0.3 USD and 0.29 USD

# Power up 100%

0.25 * 75% = 0.1875 / 0.3 = 0.625 SP

# 50/50

0.25 * 75% = 0.1875 * 50% = 0.09375

You receive

~ 0.09375 SBD
and
0.09375 / 0.3 ~ = 0.3125SP

The SBD / steem parity for this example is 0.97

0.09375 * 0.97 = 0.0909375 steems + 0.3125 sp = 0.4034375 steems

In this scenario is better power up 100%
0.625 Steems for power up 100% and 0.403 Steems 50/50
👍  , , ,
properties (23)
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vote details (4)
@mdjoni ·
I get you...but every minnow's motivation at first is making some money. He gets frustrated if his effort is not yielding any.
Please keep in mind that SBD was designed to be at $1 and what the markets are doing right now is pretty much an anomaly from the Steem governance point of view. 
It’s not the witnesses job to keep sbd at $1. The market determines the price. You need to remember a lot of the sbd is on the exchanges where buyers and sellers determine the price.
properties (22)
authormdjoni
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@modemser ·
$0.14
interesting still 50-50 for next few days :D and then see where we are i guess
👍  ,
properties (23)
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vote details (2)
@resteem-post ·
i impressed to read your post and i learned something new in your post.... you sharing a helpful post....
properties (22)
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@robmenzies ·
$0.14
@dragosroua,

thanks for this interesting post. I think if anything this might be the ideal time to have everything in SBD if anything whilst the price is still in Favor over Steem. My plan was certainly to accrue as much SBD as possible and wait for the SBD: Steem ratio to head back up to the 1.2/1.3 ration and then convert over as I think if you convert the SBD to steem you're actually going to decrease some of the value of your wallet.

But as always great job explaining this so more people understand this!!
👍  ,
properties (23)
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vote details (2)
@rocksg ·
$0.13
So the real fight is between market supply and the witnesses slider to control the price of SBD.
👍  ,
properties (23)
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vote details (2)
@dragosroua ·
There is no fight. It's supply and demand.
properties (22)
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@rojibblack ·
very informative post.........
properties (22)
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@salma-akanda ·
very helpful post.
properties (22)
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@samueloption ·
$0.14
@dragosroua, the "WORKAHOLIC-WITNESS" thanks for this vital information. 
In my recent post - **"Moon"**, I had to go 100% power up due to the drastic fall of SBD. 

Now that I am fully abreast of this valuable information, I sure will not repeat this mistake again. 
Keep doing the good work!
👍  ,
properties (23)
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vote details (2)
@shadow331x ·
deci e mai bine sa las 50/50 ?
properties (22)
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@dragosroua ·
da
👍  
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vote details (1)
@sistem ·
$0.14
Thanks very much @dragosroua for making this clear to us. I have been seeing this going around and didn't know how ttue it was until now that I have been clarified . Everyone needs to see this so they would be able to make the right decisions .
👍  ,
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vote details (2)
@sorin.cristescu ·
$0.30
So actually when the price of steem increases, the 50% of SP become a very unfavorable deal ... I've read somewhere (I believe it was in the whitepaper) that the SBD / SP ratio was supposed to be ok up to 10% (debt to equity). Yet the amount of SBD circulating is closer to 1 or 2%.
👍  , , , , , , , , , ,
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vote details (11)
@dragosroua ·
It's 4% now: SBD -> 10 mil, STEEM -> 250 mil. So there's still a lot of room to grow and balance any potential pump and dump schemes.
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@sorin.cristescu · (edited)
$0.17
quick unrelated question - would it be possible to implement functionality to see (and maybe compare) who "viewed" a post (as opposed to who "voted" on a post) ? I mean, at first sight since the views are counted, I guess it shouldn't be impossible to also record either the viewer account name or, if views from outside the platform are counted, record a generic "external/not logged-in" viewer.

And another quick one: on steem.supply I see "for 1 SBD you get 1.01 steem" Where do you get that ? certainly not on blocktrades ! 
![sbd-steem-blocktrades.PNG](https://steemitimages.com/DQmRt2b3NgvqMTi8fTN8hLD4YpD7bHyqadPXaKfDhrAWBZL/sbd-steem-blocktrades.PNG)
👍  , , , , , , , , ,
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vote details (10)
@svkrulze ·
$0.13
Yes this is a good point. When SBD is at $1 or below only then 100% power up makes sense. I have wondered about this on why someone would choose 100% power up, now it's clear to me. This is an option which would have made sense if the $ peg worked
👍  ,
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vote details (2)
@taskmaster4450 ·
$0.13
Thank you for the visual representation of what should be known.

If SBD is at $3.50, in a 50/50 split, half the rewards are paid out at 3.5 times what they normally would.  Instead of a 1 STU one gets 3.5...

The conversion to SP could change as parity is reached or moved away from.
👍  
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vote details (1)
@themanwithnoname ·
$0.11
I keep seeing this too. Thanks for the detailed explanation. Like you said, people are free to do as they wish, but it confuses me why this rumor keeps coming up as it's definitely *not* in their best interests to do 100% powered up. It seems every time we encounter "parity" I end up explaining it at least a few more times. Now I'll just have your article to link them to. 
👍  ,
properties (23)
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vote details (2)
@williamwest ·
$0.14
Thank you for the clarification, while I could figure 50/50 still would be more profitable I didn't have a clear idea why. 🙏🏼

Is it possible for the SBD to drop below $1 or how does that work?
👍  ,
properties (23)
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vote details (2)
@dragosroua ·
$0.03
Yes, it may go under $1, but then again, witnesses will adjust their bias to limit its supply which will eventually increase the price back up.
👍  
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