What has a better return CTPM or WORKERBEE?
In a comment today @mytechtrail wanted to know what miner would have the better return CTPM or WORKERBEE?
I have often tried to understand how mining exactly works for hive-engine tokens and I decided to have a deeper look into it. Now that I understand a bit better where to look for the settings of the tokens, I will try to come up with an answer.
One way of doing would be what most other people are doing. They take the data of somebody who has a lot of miners and look at the price of his miners and how much rewards he gets. The problem with this approach is that the result is only valid if somebody has a big amount of miners.
Let me explain how the miners work
Every hour, among all the staked miners, in a random manner a certain amount of miners get a payout. The thing is that the chances to get such a payout increases with the number of miners that you own and decreases with the amount of miners in general that are staked.
The number and the amount of rewards remains always the same and is independent of the number of miners that are staked
How I try to approach the calculation of a return for a miner
These are the variables that come into play:
The number and amount of rewards given as miner rewards
The number of staked miners
The price for a miner and for the token
This becomes quite a complex calculation. Let's look at these different numbers for both of the miners:
The number and amount of rewards given as miner rewards
For CTPM every hour, 20 miners get about 1.247 CTP
For WORKERBEE every hour, 10 miners get about 1.1 BEE
The number of staked miner
There are 76'759 staked CTPM
There are 235'919 staked WORKERBEE
The price for a miner and for a token
CTP costs around 0.40 Hive (this tends to change a lot lately). CTPM cost 1.25 Hive.
BEE cost around 0.77 Hive. WORKERBEE cost 1.95 Hive.
So with this information how can I come up with a kind of comparison?
To be able to have something comparable, I wanted to know how many miners I would need to have a 100% chance to get 1 payout per day. This was quite a complex calculation and I hope I didn't make any mistakes.
I came to the following results:
I need 160 CTPM to have a 100% chance to get 1 payout per day.
I need 983 WORKERBEE to have the same chances.
How to calculate the ROI on this?
I make the hypothesis that with 100% chances to win 1 payment, we would get only 1 payment. This means that we would earn 1 payment a day. For CTP this would be:
1.247 x 0.4 = 0.4988 Hive
For WORKERBEE this would be:
1.1 x 0.77 = 0.847 Hive
Now we need to divide this number by the price of the amount of each miner and multiply it by the number of miners needed to have a 100% chance to get a payout. Then we need to multiply that by 365 to get the APR.
For CTP:
(0.4988 / (160*1.25) ) * 365 = 91.031%
For WORKERBEE:
(0.847 / (983*1.95) ) * 365 = 16.128%
Conclusion
There are a lot of approximations and assumptions in my calculations and I believe the only thing that we can deduct with certainty from all of it is that at the moment you have a much better return with CTPM than with WORKERBEE.
What should also be remembered here is that this is only valid if you have the necessary amount of Miners to insure that you have a 100% probability to get 1 payment per day. This is directly linked to the number of staked miners in general. To make sure to keep this probability, you would need to constantly increase the number of your miners.
Over time, with more staked miners, your APR will constantly diminish if you don't increase the number of miners at the same speed as the number of miners evolves.
The price for the tokens and the miners themselves play naturally also a very important role in this calculation.
If you have only a few miners, you will be loosing out
I see the biggest problem with miners is when you don't have enough miners to insure that you get this 100% probability. If you have a very small amount, you might not get any payments in months and your return would be much lower, if not total null. A solution would be to join your miners in a mining pool to get a better return. If people put their miners together they increase their chances to get rewards and then the mining pool can simply distribute the rewards equally according to the number of tokens that each person contributes.
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How does the inflation of miners for WORKERBEE and CTPM compare to each other?
The current data you definitely shows that CTP would give a higher ROI given the current prices. While I do think CTP prices will still go up, do you think WORKERBEE and BEE prices will go up? Right now, I can only see BEE and WORKERBEE as a passive investment and additionally for more voting power in regards to witnesses. I am not really tempted to invest in BEE or WORKERBEE directly as I am not running a witness. I set a buy order for CTPM before prices exploded so I think it will expire and not fill.
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I guess once the diesel pool which the HE is working in kicks in , BEE will be needed as fees for the community owners to get their pools so yeah maybe at that time BEE will increase in price too.
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I was thinking that one of HE best points is the fact that we only paid in RCs, but eventually to make it more sustainable, fees might have to be put in place. I thought that by promoting HIVE, the price of BEE would naturally rise as it is used to create communities and vote for witnesses. So there wouldn't be much point in add fees, but we never know what will happen.
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I agree .
Yesterday on twitter I heard about the concept of tradable RC in secondary market , I love the idea . It will help Hive .
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When I look at the supply in miners I believe that there will be more people buying workerbee to secure witness spots. That meanst that the APR for these miners will get lower and lower.
It's the same in a way for CTPM but I believe that there won't be as much demand for miners as for workerbees.
What is important to understand is that the more miners are sold and staked, the less each miner will earn.
!ENGAGE 20
ENGAGEtokens.I have never had any mining tokens but at least I have some CTP.
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Honestly, I'm not big fan of miners because if you hold them your rewards will go downwards with every new miner that is staked. When you stake ctp tokens, you will actually be able to grow them with curation rewards.
!ENGAGE 20
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STOP...And I have just created a kind of mining pool for WorkerBee tokens... :)
I wouldn't agree that 100% chance exists as it is still a lottery, but I do agree that we are raising the probability by having more miners... I still like more curation as a method of "mining" tokens, but if there is no other solution then I have to go with miners (like in the case of workerbee tokens)...
Regarding the price, I would say that both projects have some great announcements for the future, so, if I would pick both and diversify my portfolio... If the amount is small, then delegate my tokens to the pool and earn a steady income...
Now, there is a WORKERBEE pool, and maybe someone will create a CTPM pool (but we will need the delegation option first)...
Great post!
Totally agree with you there. It's only a probability but it's the best I could come up with.
I will definitely delegate my workerbees to your pool, once they are free again :-)
I didn't realize that miners have to be actually stakable for this to work. This would cost another trunkload of bee tokens to do I think.
!ENGAGE 20
Yeah, it would cost something the token creator, but if there is a lot of miners, and people don't receive rewards in a longer timeframe, it can be demotivating and provoke token sell...
So, with miners' supply growth, the creation of this kind of pool can be interesting for both, token (miners) creators and investors...
Cheers!
I totally agree with you. The more miners are sold, the more it makes sense to make these pools. Otherwise at a certain point, nobody will want these miners anymore.
ENGAGEtokens.Thanks for the awesome post. I appreciate the research you undertook on my question.
You are welcome. Your question gave me the motivation to finally dive into it :-)
!ENGAGE 20
ENGAGEtokens.160 CPTM for 100% 1 payout a day
It would be good for folks to be aware of that number.
Does the number of payout changes with incremental levels of CPTM?
so like at 320, 480 even 640 should one reasonably expect additional payouts?
Since it's a lottery, there is no guarantee for payouts of course but the more miners you hold compared the total amount of staked miners, the more chances you have to win. I believe that the number of payouts with increase the more miners you have. In addition to that you will also start to have more chances to have several payouts per day. Holding miners is really only something worth for big wallets in my opinion.
!ENGAGE 20
ENGAGEtokens.But Workerbee is now in governance model, so it is always a choice between profit and governance.
I agree with you. In the battle to get top position as witnesses the number of workerbees might explode. What I don't like so much about it is that all the proceeds of these sales go to the owners of hive-engine...
!ENGAGE 20
If HE go on Diesel pools and link Uniswap from HE, I have no problem if they get profits.
Just think CTP goes on Uniswap pool without spending any dime from tribe.
That's quite true and would be awesome :-)
ENGAGEtokens.Interesting calculation. So it means to buy those 160 CTPM as fast as possible as the masses mater in the end to have the chance to get something!
Posted Using LeoFinance Beta
Exactly, the bigger the amount of miners you have, the bigger the chances to get actual payout. If you have only 10 pieces, there is a big chance that you won't get a single payout at all.
!ENGAGE 20
ENGAGEtokens.