Why Staking SPS Gives You a Much Higher APR Than ~25%

 

I think many are seeing the APR of SPS dropping

But it's actually much higher than the current 25%!

• First, if you compound that interest (meaning that you claim the interest and restake it daily) your APY is currently at around 28.3%

In the coming months it will continue to drop, but starting on May 25th and July 26th two major airdrops will end. This will greatly reduce the output of SPS which means that the APR will probably remain at around 20%.

Of course if you have already been restakting your SPS last year then your APY will also be much higher. It was for a long time above 100%, but even at e.g., 80% it would have given you a 122% APY!

But there is an even more important reason why the APR(Y) is even higher

• Second, if you stake SPS you also receive Vochers on a daily basis. At the moment 1 Voucher is being dropped for about 18k SPS. This essentially means that the more SPS you have staked, the more Vourchers you get (a no brainer ;), but what it means for your APR(Y) is that the more SPS you got the higher it will be. In other words, it is non linear.

For example: I received 4 Vouchers yesterday for holding ~73,300 SPS. It is reasonable to assume that the selling value for Vouchers is about 2 Hive. If you look at the chart it varies quite a bit, but that is because it rises when SPS is in demand (e.g., the SPS validator nodes sale spiked the prices from 1.2 to 2.4). So if one simply waits for this events, then one will probably be able to sell Vouches for about 2 Hive.

So 4 Vouchers turn into 8 Hive. Obviously, the value of Hive also varies a lot, so if we want to calculate how much that contributes to our APR(Y), then we have to take a fixed value. So let's assume Hive stays at around 1$. That means you would get an extra 8$ a day for holding ~73k SPS.

Since ~73k SPS is currently about $9,1k we can then say that if all things remain the same (which they won't), we would get an additional 8x365=$2920 for holding that amount of SPS. And $2920 would mean an additional APR gain of a whopping 32% (32% of $9,1k=$2920)!

Again, this isn't linear. So if you would be holding 18k SPS you woud be getting $365 a year or 20%.

You have to calculate your own APR(Y)

For me it is:

~25% + ~3.3% + ~32% =~60%

 

So are you going to stake your SPS now? ;)

 

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As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!

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