BYT News: Not So Brief Notes to Members - 12 May 2022

in byt •  2 years ago 

Fasten your seat-belts, we are experiencing some turbulence. Looks more like cryptocide!

When I designed the BYT program and token, I thought that it needed to manage at least three tokens - now four - and that the distributions should reflect as close as possible the underlying earnings potential.

Launching the BYT token on Hive-Engine meant having to have a BYT/HIVE exchange rate. I could launch some swap pools so as to have other direct exchange rates, but being an income token would always mean a dependency upon the HIVE price. Hence, the profit distributions are in HIVE (SWAP.HIVE, to be precise).

This allows for a certain hedging of profits; all other things being equal, if HIVE increases, the gross profits will decrease numerically but their value will be higher; if HIVE decreases, then the gross profits will increase but their value will be lower. The net value is a balance of two quantities.

This is why I designed the metric I have called the "Headline Yield" - it tracks, as closely as possible, the income generated by the fund in terms of the token itself, largely stripped of currency dependencies. We have seen this number being fairly constant in a range of about 20-25% APR. This may seem lowish in the fantasy maths of crypto, but most hedge funds would die to achieve this consistently.

Worth a reminder that 200% APR for an asset falling 90% in price reminds me of my analysis of "egold ponzis". One can make money, but one has to be very sharp and awake.

So, will the current cryptocide leave any coins alive? It seems to me that this attack is really focussed on the inappropriately-named stablecoins. If a peg is truly a peg, then why not call it a peg? The whole market is being dragged down as such stablecoins are the oil that greases the wheels of exchanges and defi - If your engine or transmission are losing oil, that car isn't going to run for much longer.

With many coins down by about half of what they were a month ago - and some having hit the floor - how have BLURT and BYT fared?

As most of you have noticed, BLURT has been rising in both HIVE and BTC terms. The USD value has dropped a bit, which is not surprising, but nowhere near the amounts of most "top" coins. The reason for this, I suspect, is that BLURT was on an upward trajectory anyway; all this market has done is slow it down for now. More importantly, the userbase is increasing and more coins are being purchased and used.

Putting it very simply, the price is a reflection of one of the most basic features of economics: supply and demand. It is thus not in a speculative bubble, hence there is nothing to pop! Indeed, BLURT had its very own downward trend recently, but again, that was a fundamental supply and demand pricing with some large accounts leaving. I don't usually enjoy quoting Warren Buffett, but Blurt comes close to his idea of a profitable and sustainable system - watch how he tends to buy boring companies that churn out profits year in year out. It is Buffettesque in that it is an understandable product that users need to use on a constant basis. Anything that undermines this "use case" should be examined very closely.

So, on to BYT itself; I have just done a quick audit, not a full weekend audit but about half of one, plugging in some key prices. The fair value price is today about 2.6 HIVE and the projected profit will be a new ATH in HIVE terms. The Headline Yield is also a whisker up from last week. This is all possible by design; the SWAP.HIVE will be worth less per token, but having a lot more of it places the onus of choice on the user. Indeed, as the BYT market price remains stubbornly low compared to the ABV, I may distribute even more profits - that will bring the ABV down a bit.

It's all numbers... and logic!

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Hello @rycharde
Thank you for sharing such great content!
Use #blurtconnect tag to get more upvotes from usBlurt to the moon 🌕You can delegate any amount of Blurt power to @blurtconnect-ng
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Absolutely, Blurt has shown some kind of stability in this extreme volatility period and not lost it's value against BTC and Hive compared to other coins. I am not understanding the technicalities much but I do understand that slowly gradually Blurt is getting stronger.

I think I've got it



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I put this explanation in front of a few people...
Sorry if you get a bunch of calls 😬👍

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