The Return on Investment of delegating LEO to @spinvest-leo

in steemleo •  3 months ago 

The newest branch of @spinvest has been launched, @spinvest-neo. That account will accept delegations of Neoxag and reward delegators with SPI tokens. I think it will run similar, but the mining calculations will be a bit different. Check out the launch post to get an idea of how it will work. A few details still to iron out, but I applaud @underground for taking on the task, and helping to spread the Spinvest program out.

spinvest - growth.png

One question that has popped up a few times, and received a mixture of answers is whether it is worthwhile to buy LEO tokens specifically to delegate them and mine passive SPI. I thought I'd look at the math, so you can come to your own conclusion. This isn't financial advice at all.

Assumptions for this example:

  • 1 LEO = 0.2 STEEM exchange rate.
  • 1 SPI = 1.22 STEEM (the price on LEODex or Steem Engine)

The Process: (numbers are examples only, any amount of LEO will work)

  • Buy 1000 LEO - cost 200 STEEM.
  • Stake LEO.
  • Delegate LEO to @spinvest-leo.
  • Check you wallet weekly to make sure rewards are payed correctly.

ROI.

  • In this example, you will earn 1 SPI per week. This is equivalent to 1.22 STEEM (exchange pricing). The investment was 200 STEEM.
  • Weekly return is 1.22/200 = 0.61%
  • Annual return is 31.72%

After 12 months, so long as everything keeps running to plan, you will have 1000 LEO plus 52 SPI. We know the SPI token is 100% backed by Steem Power, and should only ever go up in exchange for Steem. The value of LEO in 12 months is unknown, that's the risk each investor needs to consider.

In terms of STEEM ROI, nearly 32% is about what we are looking at for buying LEO specifically to delegate for SPI. Buying and actively curating yourself will always be more profitable, but will involve more time investment. Each investor needs to decide if 32% ROI is worth the risk.

Speaking of risks, what are they?

  • LEO tribe dissapears - the tribe setup involves a degree of centralisation. If LEO folds, or ends for whatever reason, the tokens you have bought would become worthless.
  • LEO price drops and the current ROI is unsustainable. This is possibly the biggest risk. I am dependant on LEO remaining solid to be able to sell enough earnings to buy the SPI payouts. A change to this would mean I have to reduce payout rates and this would affect your ROI.
  • Potential other unknown risks.

Every investor needs to make their own decision based on what suits there needs. I hope this little outline helps with that process.

Have a great day everyone,

JK

@jk6276.leo for @spinvest-leo

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

Can you add me to the Delegation list!

FIRST!!!

Thanks for the drop-links Spin-LEO!
I propose that we have these accounts auto-vote each other,
@spinvest, @spinvest-leo, @spinvest-neo 👍👍👍
If that fits with your curation plan, LMK...
I also need some help with tracking delegators, your own deli (from the JK account) is not showing up under any named account, but I see it in the totals. The NEO Account has well over 60k NEOXAG at this point 😱😲😱

Votes already set. Spin-leo will also be collecting neoxag tokens to delegate. Spi earned from you will reduce how much leo i have to sell to pay my delegators.😎😁

I can see my personal delegation of 6000 neoxag in the list.

Posted using Partiko Android

Excellent work @spinvest-leo Add me to your Delegators!!😀

I'm in... Delegating to @spinvest-leo !!

I like the cross voting also, my Delegation is in!!

Does it depend a little bit on the type of investor you are and your savings and investment plan? Buying 1000 LEO would cost about £23, give or take, at current rates. It's a bit like what else did you want to do with that money? If you need it to pay your rent or feed your family, LEO is a high risk investment. If you would alternatively spend it on discretionary items - Costa coffee, cinema etc - then LEO is no bigger risk than spending the money. If you buy the LEO with your earnings from curation and post rewards, then is it any risk at all?

Your absolutely right. The risk is relative to each individuals situation. £23 may be a night out at a restaurant for some people or food for the family for a month in other parts of the world.

I always think risks should be noted, then people can choose for themselves.

Posted using Partiko Android

You guys have something good started, also Delegating!

Fantastic guys, Delegating too!

Delegating carry on!

That's an amazing ROI!!!

Hi, did you get my delegation this time? Details below...
C564D172-3962-4B9B-BFA1-7F636C680DB2.png