Using SIM to build our liquid HIVE Reserve for the Primary FreeCompliments Community Account

SIM

SIM is a token associated with the dCity, a game on the HIVE blockchain that’s been around for a few years and continues development. Within the game, SIM is used to purchase various assets that contribute to the growth of the city. I’m not going to get into the nitty-gritty details here, but for those who are interested, the game can be found on dcity.io.

What the heck does this all have to do with FreeCompliments?!

Well, holding the SIM token provides SIM Power, which rewards liquid $HIVE rewards on a daily basis. The reward is based on an average SIM Power over 30 days; in other words, you must hold SIM for 30 days in order to obtain the SIM Power upon which rewards would be based. If you hold SIM for 1 day, you’ll get 1/30th of the rewards that you’d receive after 30 days. Additionally, a minimum of 8000 SIM is required to begin receiving any liquid HIVE.

Now, just to throw out some numbers, the average APR for holding these tokens has been approximately 35-36%. However, this is not the end of it!

If you put these SIM tokens into the swap.HIVE:SIM liquidity pool, you earn an additional ~17% in SIM on a daily basis. If you have enough liquid swap.HIVE, you can continue growing this liquidity pool on a daily basis.

Now, here’s a unique feature of the SIM token: the tokens which are in the liquidity pool continue earning the aforementioned APR! In this way, you’re able to earn both HIVE and additional SIM tokens, which in turn earn even more liquid HIVE.

Thus, the APY becomes quite substantial – far over 36%.

Now, many people must be thinking: what if the price of SIM drops? Won’t this crash my APY? I considered the very same thing, and have been watching the price for a while. Over the past few months, the price of SIM seems to have stabilized around the 0.000170 – 0.000175 range. Even historically, the price did not appear to dip below that point. I purchased, for my own holdings, around 15M SIM at a price of 0.000173 HIVE apiece. Currently, the price is sitting steady at 0.000172 HIVE.

How will FreeCompliments use SIM?

Currently, I’m earning approximately 14,000 SIM per day from my own stash. I began pumping these SIM into @hive-140084, and using the swap.HIVE I have there in order to add to the liquidity pool. After a while, I’m going to stop pumping SIM into that account and let it accumulate SIM on its own. I’m not yet sure when I’ll stop doing this, but it will likely be at least for a month, if not longer.

My plan is, initially, to use all of the HIVE rewards obtained from holding SIM by converting it back into swap.HIVE and using it to add to the liquidity pool. Simply based on the APRs, the swap.HIVE rewards (after holding for at least 30 days) should exceed those required to continue adding to the liquidity pool. Thus, we’re going to reach a point where we’re able to continue adding to the liquidity pool and keep a little bit of extra liquid HIVE.

This way, we’re going to be able hedge against any price downturns in SIM while still earning more liquid HIVE.

What will we do with the additional liquid HIVE? Naturally, this will go towards maintaining our daily and monthly HSBI rewards. It’s always been a bit of a struggle to retain this reward system without powering down, and while I have been adding my own funds to keep it going, I’m always searching for additional ways to break even. This is one such other way which will get us closer to that goal.

We’ll eventually reach that breakeven point, and after that we’ll be able to continuously grow without having to ever power down.

Additionally, I’ll likely incorporate SIM tokens into our reward system. It will also likely be a part of the future rewards for delegating to one of our designated community accounts. This is going to be quite exciting!

Missed Mental Health Initiative Threadcast

Just wanted to drop this in here since I’m posting anyway… we missed a mental health initiative threadcast yesterday due to InLeo updates which rendered Threads unusable for me most of the times I tried yesterday (which wrapped around my work hours). Updates are necessary, so I wouldn’t hold this against them at all. Just an fyi for everyone!

Conclusion

SIM is going to be a steadfast part of our future HIVE income plan and rewards system. It’s going to bring the FreeCompliments Community closer to becoming a self-perpetuating HIVE-earning machine that can continue give out HSBI to its users for their wonderful content!

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Disclaimer: FreeCompliments (@hive-140084) will be a 20% beneficiary for this post.

Follow our curation trail and earn 1 HSBI per month!

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Posted Using InLeo Alpha