BYT Backs: Reward Distribution of 44% APR for 31 January 2022

The reward payouts this week have a headline rate of 25.4% APR, and the yield at par price of 1 HIVE is 44.5% APR.

The actual distribution has decreased a touch, from 201.0 to 197.0 SWAP.HIVE.

BYT token holders will see their rewards in their SWAP.HIVE account - not in their BYT holdings.

The Numbers

This week:

SWAP.HIVE per 100 BYT Payout = 0.856

BYT Headline Yield at ABV = 25.4% APR
BYT Yield in BLURT = 29.0% APR
BYT Yield at par 1 HIVE price = 44.5%

BYT Program Total = 1,729,000 BLURT equivalent
HIVE/BLURT Rate = 43 BLURT per HIVE

BYT ABV = 1.75 HIVE (1.65 USD)

Read this for further explanations of how the metrics are calculated.

Insights

Quite a few things to go through this week, so I'm not going to focus on the above numbers. We have seen a significant surge in BYT tokens sold; this is great but, as in the early weeks, they do take up to two weeks to fully earn their weight in the fund. This means that in the short-term the new capital can dampen returns a little, but after a couple of weeks the returns should be even stronger. This effect only happens because the BYT program is still relatively young and small. If we were managing $1m and added an extra $10k, then there would be a negligible effect on returns.

What you will see on the market is that I will place fresh price-points weekly at about the ABV. If that ABV rises, then people can buy at a discount to the assets; if it falls, then I shall reconstruct a ladder of selling points. Hence, you will currently see three blocks for sale at 1.7 HIVE - that isn't an error, is just that we have been around that level for a few weeks. I think this gives people the freedom to trade their tokens while still supplying some on-market guidance.

I'm not sure if anybody noticed, but the reward distribution suffered a bit of a glitch this week. Running out of RC on the Hive chain has never happened before, so I increased the HP but had to complete the payouts manually. While doing this, I noticed a number of BYT token buys on the market. I had to be fair to every member, so I used my saved database of BYT holders taken at the time the distribution started. I think this affected 3 people - apologies, but next week will be higher!

February sees the start of some random bonuses coming from our holdings in the Cosmos network. I hope this will be interesting - and profitable. A couple of things to note. Our weekly data includes all holdings, including those on Cosmos, yet those payouts are done separately, so the weekly APRs may underestimate true returns. However, when I shall do the random bonuses, I will be adding together the two APRs for that particular week so that members have a better picture of total profits. I have no idea going forward what they will yield, but I estimate at the moment something like 10-20% extra per month.

And lastly, February also sees a vote needed to decide whether the BYT program should continue or not. I shall post a fresh article on this, but the background was already discussed in this post. Given the new bonuses and the steep rise in price, I suspect the majority would like BYT to continue. However, the future is deeply uncertain, so I may elect to extend the fund for a further 6 months, taking us to the end of August. More on this in the next post.

Live long and prosper!

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