My Thoughts on the Future of SPInvest - a running conversation

in LeoFinance9 months ago

This is part of a conversation started by @spinvest in this post and continued by @jk6276 in this post.

When you have a bit of disruptive change, it's always a good idea to take a bit of time to reflect and review what's happening. That's what a lot of people (including me) have done. We're holding our horses and seeing how things pan out, while continuing to do the dishes post, vote and comment.

It wasn't surprising that SPI token sales came to an abrupt halt after the Justin Sun purchase of Steemit Inc, that is what I would have expected. It's all part of the change curve. Then we have a nice bit of drama, because people enjoy that and it makes them feel like they have some kind of control in the face of uncertainty. I tend to watch and wait. My experience of Steem is that there is an ingenious and committed community and they will find a way through.

Steem-Engine, SPI and all the other tokens came along at the right time. We needed some excitement and distraction and Steem-Engine provided the opportunity for a million inventive ideas to pop up. It was new, it was fun, it brought new activity to Steem that had been suffering a little from the long slow hard crypto bear winter (in the Arctic sense of winter: constant). People enjoyed themselves playing with new tokens and swapping them for others. Then we had HF21/22 and the new EIP - that helped to create a different, more relaxed culture as well as different kinds of opportunities.

Steem never had a huge user base, though. The technological understanding and the decentralised environment are huge barriers to entry. And the whole idea of the blockchain, of an alternative economy and an alternative way of organising, is a bit mind-blowing. We saw in SPInvest a brilliant idea, but with a limited user base, it has always had to compete against all those other tokens, and games, and interests and Steem itself.

We've seen a very common model of adoption of SPInvest, with something like 70% of the tokens issued shared between perhaps a dozen accounts and then a very long tail of accounts owning much smaller amounts (308 accounts in all). We hit a plateau some time ago, when the early adopters had reached their thresholds. There have been ingenious ideas to bring new people into saving and investing with SPInvest, including earning SPI through delegating LEO and NEOXIAN, direct fiat to SPI purchases and (my favourite) buying SPI through setting @spi-payments as a beneficiary on posts.

The Fund has also bought a series of investments over its six month life-time and holdings include bitcoin, previous metals, steem monster cards, as well as Steem-Engine tokens. Club membership has grown, with members participating in votes for proposals about investments and about the direction of SPInvest. We've had a thirteen-week (thirteen weeks!) treasure hunt which just paid out, and there are several sub accounts which are building the Club's assets through curation.

I was slightly surprised at the suggestion of capping token sales at 200,000 rather going for the full 1 million tokens that are available. This seems a bit defeatist: first of all, SPInvest has done really well already in really quite difficult circumstances. Secondly, Steem has a tiny, tiny user base ... it's no reflection of what Steem and SPI could be.

I like the original vision of 1 million tokens. Steem's tiny user base will change and when it does, it will change exponentially. I believe SPI token sales will increase exponentially along with that, so I am wary of capping the fund. I feel we have only just got started, and there are many big ideas to come.

It does concern me that something like 70% of tokens are held within so few accounts. Those accounts are important, they are the anchors and bedrock of SPI. We know most of the investors are Club members and hodlers - that's really important to create stability - but, long-term, we need better distribution than that. More accounts and more growing accounts until we have a big fat middle-class.

Having said that, I'd like to see much more off-chain investments, and a focus on building a portfolio outside Steem. I wasn't in favour of buying Steem Monsters cards, I'm not in favour of buying Steem-Engine tokens - we don't know how either are going to perform over the long-term. The holdings we have are okay, but I would prefer to see us steadily building a balanced portfolio of Bitcoin, precious metals and indexed stocks. I'd also like to see us building up to buy shares in properties, if not properties outright. A bit of the London property market would do me nicely :)

I think it would be much more interesting, engaging and in the interests of the SPI fund to have more member activity, including building investment awareness. Hearing people talk about what they invest in and why, the considerations for them and how they manage risk would enable people who feel they don't know much, or feel a little anxious about investing to take part and feel more confident about what they are doing.

A monthly club meeting with a guest speaker with a nice clickbait title "why I wouldn't touch [property] with a barge-pole" (in fact, replace property with another word each month :D), would bring members together, and build relationships and knowledge. Or a discussion about reserves (call it a buy-back wall, if you will) - are they important, pros and cons, how big should they be or some other topic relevant to understanding SPI and how investing works.

I fully understand about the grind of taking on a role like managing the spinvest-leo account, I've done similar things many times, which is why I'm not taking it on now as I'm approaching the end of my working life. I did consider whether I would do it if there was some recompense, as it currentkly being suggested. The answer was still "no" for me, although, as a principle, recompensing people for their work towards building the fund is okay. My only query would be, how does it sit with the regulations surrounding investment clubs?

While I am not going to take on a larger role in SPInvest, I try to be a good member and a critical friend - read posts, vote in polls, ask questions, offer support, suggest ideas. That's what I can do for SPInvest.

I wonder, though, whether there is any possibility of automating some of the more routine tedious bits of running an account - maybe consider the possibility of paying in steem/tokens for someone to do the development needed for automation or, if this is a problem that may affect many other tokens, asking whether there could be an automated system built into Steem-Engine.

More about SPInvest

SPInvest is a tokenized investment fund/club for all users of the STEEM blockchain. Everyone is welcome! The concept of SPinvest is to get rich slowly by using time tested methods of earning, saving and compounding long term. We encourage long term investing on and off the STEEM blockchain. We hope someday everyone will HODL some SPI tokens that can be bought directly from @spinvest or through the steem-engine or dex.steemleo exchanges. Full details about SPinvest can be found here.

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Geat post, lots of great information in and good ideas.

Capping token sales would let us pay out regular dividends which could, in turn, drive sales. Plus how long do you think it'll take to issue another 100-250k token. Years and years. I am 100% behind you on off-platform investments. BTC, PM's and a few stocks to be the core 3 investments with smaller investments into other things. There are options to crowdfund property builds that pay out either a cut of the sale price are a slice of the rent. As for SM cards, they are one backed tokens and they are 1 of a handful of SE tokens that have increased in dollar value from release. Long term, they will serve us well.

Building club engagement will be the focus but it'll require work from club members. Dont mean taking roles, just mean being active. We'll see. There's not a lot of automate, to be honest. What were you thinking to automate? Token sales could be set up but it would require people to use a special memo are something but then people not using the memo results in a problem. I can write/edit code for simple things but not seen a reason to set anything up yet.

I've just released my 1st post from taking a break. Lots things are gonna change :)

Great post and thank you so much for taking the time to share your toughts.

Great to see you back!
Yes, of course - I hadn't thought about how dividends might increase sales - good point. I was worried about a small, closed circle of investors which I didn't feel comfortable about.
Automation - I was responding to @jk6276 comments about the routine work involved in administering the @spinvest-leo account and wondering whether there was a way to automate that. Just an idea, I wasn't suggesting that you do it :)
I can live with the SM cards ;)~

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