2025 is just around the corner and with it looks like a bull market.
My small project, Hive Power Ventures has been operating for more than a year now without incident. And the PWR token is healthier than ever with a huge liquidity pool for the relative size of the project (33K mcap) and a loyal group of backers and delegators.
Anyway, you know that I like to try to adapt quickly to changes and be flexible in my projects.
And I think we are in one of those moments in which it is necessary to be ready to adapt to market conditions.
In this post I plan to set out publicly how I will be working with PWR throughout 2025, which does not come with some changes to the usual way you are used to.
Overall goal for Hive Power Ventures: More HIVE Power
This has always been the premise and I do not expect it to change.
However. I don't want the project to be 100% staked in Hive Power by the time Hive continues to rise in price to much higher valuations.
That is why I will most likely start a power-down of the @vventures account to capitalise on a hypothetical increase in the price of Hive.
I am not sure of the %. Sometimes I think 33%, sometimes 50% and sometimes I go crazy and think 100% (why not?).
What is certain is that when the time comes you want to be liquid just to have ''the possibility''. I don't want to make the same mistakes of the past where I left a huge % of unrealised gains on the table.
The obvious choice: HBD.
And what to do when selling Hive in a hypothetical top? Well, it's very easy. HBD.
has proven to be very resilient since the introduction of the APR in savings and has endured an entire bear market without major complications or wild (sustained) fluctuations.
The obvious move is much easier said than done:
Sell HIVE at or near the top, accumulate HBD and quietly farm the APR until the next bottom ~2 years later.
And this is what I will try to do with the accumulated HIVE in @vventures.
PWR Future Prospections
If this move goes minimally well, a large amount of HIVE will be sold at the top and repurchased at the bottom, overpegging the project and causing the amount of HIVE under management to exceed that of PWR.
And if this happens, on paper the ''supported price'' of each PWR will be more than 1 HIVE.
Which brings a couple desirable effects:
PWR will transition from a ‘’soft-pegged‘’ token to HIVE to a fully HIVE-backed ''growth'' token.
Since the delegation rewards to empo.voter are calculated on the basis that 1 PWR = 1 HIVE, if 1 PWR is valued above 1 HIVE the delegation rewards increase accordingly.
This is best understood with an example.
Joe has 10.000 HIVE delegated to empo.voter and he's receiving a daily drop of ~2,19 PWR (800 PWR/year or 8% APR).
If for whatever reason price of PWR is let's say 1,2 HIVE, his daily rewards will still be ~2,19 PWR but because he will be able to sell them for 1,2 HIVE each, those 800 PWR/year -> 960 HIVE.
Which makes his 'real' APR 9,6% (and not 8%).
In other words, a higher PWR price 'flywheels' into a higher Delegation APR and Pool APR (but still a diminishing PWR inflation).
TL:DR;
Long-term; the only way to make Hive Power delegations atractive is a rising PWR price.
And this will become my goal as time passes.
Changes to PWR
For this vision to become a reality, PWR should gradually move away from being a soft-pegged token to HIVE.
In practice and for the time being, it means that I will no longer use project funds to ‘prevent’ the price from rising above the 1:1 ratio with HIVE.
However, I will continue to hold the price at 1:1 in case it falls below.
Everything else remains equal for now.
Have a good Sunday.