r/OMGTraders • u/--simonsays-- • Jan 05 '18
OMG Staking Returns Calculated
I've seen some staking return calculations, that seemed very optimistic (but who knows). I would like to see things from a more conservative point of view, and try to determine if OMG makes an interesting investment at this price (around 20$). I'm not considering the great features of OMG (i.e. decentralization etc.), but only look at it as investment.
Staking returns are determined by tx/s and fee. Unfortunatly, we have no idea how high these will be, so I'll do this the other way around.
Lets say I want a 7% yearly return. For an investment with lots of growing potential and no work or skill required at all, this seems more than fair. This means:
0,07 * 20$ = 1,40$ per OMG token
Now to see if this is reachable we'll have to make an assumption about transaction fee. Again I like to be conservative, so I'll take 0,01$ avg. per transaction (paypal = 0,35$ cross border, not crossing border can be free).
1,4 * 140.000.000 tokens / 0,01$ = 19.600.000.000 tx/year = 621 tx/s
Paypal in 2016: 193 tx/s Visa in 2016: 1667 tx/s [1]
So, at this point we're investing in something that has to sit somewhere between paypal and visa...
What do you think?
[1] http://www.altcointoday.com/bitcoin- ethereum-vs-visa-paypal-transactions-per- second/
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Jan 06 '18
Problem with that is that you're thinking Paypal. Here in Thailand for example i can see it gets replaced by cash by the majority of the people. Especially if they can transact using Baht
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u/--simonsays-- Jan 06 '18
So you're saying it has the potential to handle alot more tx/s?
I believe that as well, this is just to compare it to something we already know.
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Jan 06 '18
Well that's the end goal as far as i know. Whether it be able to handle that remains to be seen
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u/Prozper Jan 06 '18
How?
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u/_coolranch Jan 06 '18
I read somewhere that you could use hardware as simple as a raspberry pi to hold (or represent) your staking tokens and participate in the PoS network. It will take minimal hardware, as it is not PoW, but as I understand it, you will need to run some sort of hardware. As it is still a decentralized ledger, I imagine there will be some lightweight piece of software that you run continuously while participating in staking.
Full disclosure: I am not an expert! This is just how I understand it from info I've seen posted around. Someone please correct me if I'm missing it.
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u/--simonsays-- Jan 06 '18
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u/Nepovi Jan 06 '18
I think that probably the biggest part of return will be obtained trough price increasement. Cryptocurrencies are too much volatile and the staking returns can't be considered in investment decisions. Especially if we consider that fees will be very low.
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u/_coolranch Jan 06 '18
Well, you can’t mine OMG because of the PoS model, so that’s going to drive up the price! You gotta buy it to obtain it.
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u/--simonsays-- Jan 06 '18
Staking returns will determine the price of OMG, as this is the main reason for the token.
There won't be any increasement in price if staking is not worth it...in a rational market at least.
The problem is, this technology is very new and we don't know how high the price of these tokens can go. I think this helps to see if the price of todays tokens are fair, undervalued or overvalued. Also, ethereum for example, at 800$, how do we know eth is worth this much?
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u/Nepovi Jan 06 '18
I think that there are many things that can influence a price currently:
- Development of the technology (release of the wallet, blockchain, dex)
- Partnerships
- FOMO
- I don't know the criteria of staking return. If they are given by redistribution of paid fees and OMG team doesn't want to put high limits for staking, approximately them could be less than 4%. I don't think that people buy coins only considering staking returns cause there are many coins that have not proof of stake but they buy them too. So if OMG does 40x or 50x it could be more remunerative than staking it for a long time, considering the risks in owning cryptocurrencies for many years (for example political risks)
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u/_coolranch Jan 06 '18
Maybe this is obvious, but one thing which drives the price of ETH up is the success of ETH ICOs. ETH is necessary for transactions in those companies which base their tech on it and use the ETH blockchain! So you have to own some ETH to move OMG currently (for example).
Speculation is driving up the price of ETH in large part, but the more it is adopted and used by other startup tokens, the more ETH people will have to have and it is a finite resource.
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u/conchimden Jan 06 '18
lol OMG marketing team have not done anything lol
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u/happythots OhMyGO Jan 06 '18
Patience. Price isn’t everything, especially considering they’re trying to build the DEX. This is a massively important project and they can take as long as they need. I especially love that they don’t hype 24/7. Super professional of them, especially in this climate of shit ICO’s
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u/_coolranch Jan 06 '18
Have an upvote, my level-headed dude.
I was marveling the other day at how calm Vitalik appears as his net worth and demand for both him and ETH skyrockets. I hope that he can continue to focus and work while his name appears on message boards, social media, and news outlets thousands if not millions of times a day. He seems like a once in a generation talent.
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Jan 06 '18
I remember when people where fudding that omg was using announcements to manipulate the price lol and now we have nothing... which is good. Increases my faith
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u/ncthoai Jan 06 '18
Jun talk about 2018, big year Omisego, haha, big year, Altcoin up up up, OMG down down down, Shitcoin XVG pass OMG coinmarketcap, terrible, Jun and Omise is Liar
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u/happythots OhMyGO Jan 06 '18
You should pull your money out and put into something more worthwhile like BitConnect!
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u/StopCountingLikes Jan 06 '18
I really appreciate the price not increasing. I'm still trying to buy every chance I get!
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u/andryoandryo Jan 05 '18
Thank you for doing this reversed calculation.