A look at the 'backed-value' of PWR

Sorry for the lack of updates in the last two weeks after introducing some important changes in the last post.

A couple of things have been slightly delayed in the dev side of things and I was waiting for the completion of that specific change (confirmation of the changes on the distribution bot) before making any new post.

The changes on the distribution bot are already LIVE.
If eveything goes fine, HIVE Power delegators should be receiving tomorrow the first PWR drop dependent on PWR price.

There are more things to talk about and the truth is, I'm a little bit afraid to condense it into a single post and run the risk of making it unbearable for the average reader.

So I'll keep it simple, and give specific information in separate posts.

Today I would like to talk about the PWR 'backed-value'.

PWR (the token) has a free floating price in Hive-Engine.

Like any other token, this one is conditioned by supply and demand. But in addition to that, PWR (the project) has a certain number of assets (until very recently only HIVE).

This means that theoretically, if the value of PWR (the token) were to fall too low, it would hypothetically (for the project) be possible to liquidate part or all of these assets to ensure a 'minimum value' of PWR.

This is the foundation for any backed asset. There's something actually BACKING other something.

We have a virtuous example in our beloved chain by the way! All the HBD is backed by HIVE in practise. HBD redemptions have a impact in HIVE price and viceversa; demand for HBD pressures HIVE to the upside.

Although, I must say that for the moment I will not allow direct PWR redemptions for HIVE/HBD or any other asset. The backing price is only a reference to correctly value PWR.

Therefore, I will continue to add my efforts to ensure that at all times there is a healthy liquidity pool that allows any PWR holder to exit or enter at will without large fluctuations in price.

In the last post I took the decision to move away from the 'Hive only' position we had since the beginning to pursue another ventures.

I've did a few movements since the change was announced 15 days ago.

The first major move is building a ETH core position and use it to borrow USD against.

PWR currently holds 17,3 ETH receiving a 1,8% APR... while pulling out 16K USDe*.

I used USDe because it has a lower interest Vs USDC or USDT. It's an algoritmic stablecoin from other ecosystem (when Aave on Hive?).

I then used this borrowed USDe to make a few moves. In a nutshell, I bought AVAX, SUI and LUMIA. Reallocated into SUI and made big gains with SUI in a short time (bought at 2,2$ and 2,5$; sold everything at 3,5$).

Then used all the gains to increase the ETH position and borrow a bit more. Used these extra funds to buy more LUMIA (position currently underwater, bought at 0,32 and 0,37. Currently at 0,28) and HIVE (hive liquid, being used to DCA into the pool).

I also thought it would be a headache to report this every month, so I have prepared a public portfolio so that anyone can follow the progress:

Among the different apps I have been testing, the truth is that coinstats works very well. If you follow the url above you'll see a website with two diferentiated sections.

One in list format with the history of gains and losses for the different tokens in the portfolio:

And another in chart format with a very visual interface of the %* of the project.

The % are a bit fucked up because the app probably doesn't expect negative balances, as I'm treating the USDe debt/borrowed position.

You get the picture. The core at the moment is ETH, with a bit of LUMIA as a low cap play with high potential and some HIVE which I'm currently using for small buybacks.

Currently there's 23K$ worth of assets backing a total supply of 117.000 PWR
Which makes every PWR worth around 0,196$ taking that metric into account.

Said and done:

It's pretty normal to have questions with these kind of changes. Hope posts like these helps to clear things a bit.
I've prepared a little discord server in case you want to make a specific question.

You can also tag me here on Hive as usual.

I'm not that active on discord from the moderation side of things. Allow a few hours for me to catch up (or send DM directly).

You're not voting for my witness yet and love what I do? Don't ask me more: