Over the last month or so, I have been delegating to HoloZing to capture some of the hourly distribution token. The value of which is still far too high in my opinion, but it has come down significantly since the start of the start. The price however, has meant that I have been selling into the market for SWAP.HIVE, with the strong intention of buying back as the price degrades over time, which it should.
Normally, the degradation in price is a "bad" thing, but in this case, it is to be expected, as this particular token has in-game application, which means it is made to be spent. At the moment at least, the more who capture it, the better for the game. There is currently about 110M ZING released yearly, which gives opportunity for people to capture and buy some from the markets. fifty percent of the inflation comes from delegations, which means that the price of the token at this point, is largely dictated by the opportunity cost of the delegation, and whether the delegators are willing to hold, or will dump it onto the market.
For me, it is currently a hybrid approach, where I am staking some and releasing some into the market for HIVE. Then, I am also starting to enter into the Liquidity Provider pool on TribalDex, which is a kind of hedge either way, as it earns me ZING (which I want), as well as holds some of my ZING there, which will grow or reduce as HIVE increases or decreases in price. Since I want both of these tokens, I don't mind what the balance is.
For an easy example for those who don't know anything about LPs.
If Zing is worth 0.01 each (currently 0.013)
If 3500 ZING requires 100 HIVE for the pair, the value of HIVE is 35 cents = total value 70 dollars. If HIVE doubles in price to 70 cents and ZING stays the same, the pool has to balance. This means that the value of the holdings are now $105, which gets split between ZING and HIVE. That means there will be 5500 ZING in the pool, and 78.5 HIVE. If I were to exit the pool at this point, I would be up 2000 ZING, down 21.5 HIVE, but the total value which was 70 at the start, is now 105.
However, there would also be the "earnings" from the LP on top of this. There is 40,000 ZING distributed to LPs each day. So to make things easy, lets say that the above scenario gave a constant 1% of the distribution, which is 400 ZING a day, and that is stable for 30 days. This means that it would attract 12000 ZING in that month, which would be equivalent to 4 dollars a day (at 1c), which is 120 dollars worth.
So, based on that above (largely unrealistic) scenario, even though there is less HIVE and more ZING, the total value has increased, because HIVE has increased, and there is additional ZING value from the distribution earnings. But of course, this isn't going to be the case, because nothing remains equal and the value of ZING will fluctuate, the value of HIVE will fluctuate, the amount that hits the market will change, the amount in the LP will fluctuate to change the percentage of it owned... It is all a gamble. However, it is good to get an understanding of what options are available before taking risks.
The risk I am taking is new for me, as normally when there is the possibility to earn a token like this, I will just keep staking it, rather than trying to maximize it. This time, I am very keen to be a part of the future of HoloZing, and I want it to be awesome, because I like the team behind it a lot. This means that I am more willing to take some risks, including being open with what I am doing here.
I like that @acidyo has also been transparent with what is going on with HoloZing, and giving insight into all the various options that there may be. But, it is always good to remember that this is a dynamic and changing environment and especially this early on in the game, it is open to a lot of change. Don't get too set on current conditions, because they can change a lot, and quickly.
Do your own research and own your decisions.
Taraz
[ Gen1: Hive ]