56 CTPSB tokens burnt this week in rebalancing
Last week, we started a rebalancing of the project which consists in powering down some hive power and in burning the according amount of CTPSB tokens. The purpose of this rebalancing is to react to market conditions when people sell more tokens than they buy. The tokens that are to be burned are purchased from the market maker that gets new liquidity to provide buy orders on the market.
This week, 200 Hive were powered down and 56 CTPSB tokens were burnt in the process. This has no direct impact on the token value and we had a normal return on the token this week. It was slightly lower than average mainly because there was no post reward that was paid out this week.
The indirect impact of rebalancing
We might think that it's negative if we have to power down and burn tokens but for the token holders this is actually better. We have income sources like author rewards and returns from mining tokens that are independent of the hive power of the account. This means that the more CTPSB tokens are burnt, the more these additional income sources will impact positively the return of the token.
So to sum up, rebalancing is actually bringing more value to the existing token holders through a slightly higher APR. The rebalancing continues this week and will be stopped as soon as the market maker has enough liquidity for the market to work properly.
The numbers of this week
| Assets | Amount | Increase over last week |
|---|---|---|
| Hive Power | 33665 | -114 |
| Tokens in circulation | 9374.4 | -56 |
| Burnt tokens | 2123 | +56 |
| Token value | 3.591 | +0.009 |
| APR | 14.6% | -0.8% |
Learn more about the CTP Swarm Booster:
A project run by @liotes
It seems like the rebalancing is working out as it takes out those CTPSB tokens from circulation. I am guessing the powerdown will continue until the excess tokens are removed?
The idea is to increase the liquidity of the market maker to a normal level. We should get there in a week or two if there aren't big selloffs in the meantime :-)
That's a good amount of CTPSB tokens burnt.
so how many more hive powerdowns are pending?
and approx how many more CTPSB tokens will get burnt?
!BBH
!ALIVE
!CTP
According to how much tokens are sold on the market, I will continue the rebalancing for at least one week or maybe two. This would entail a powerdown of 200 per week and the burning of the according value of CTPSB (around 55.8).
Thanks for the news.
!BBH
!WINE
Thanks for stopping by!