An Approach To Growing One's Stake On Steem

The other day I wrote an article after reading what @tarazkp wrote. It is an idea that centers around using the Steem platform to grow one's stake so that he or she can live off the proceeds. This, naturally, is a central part of investing which millions have used for financial independence.

Unfortunately, for most of the world, this is not a likely outcome. Our present system does not provide enough to people so they can afford to meet their basic needs plus put enough money away to grow. In the developed countries, we saw a multi-decade run where wage growth is stagnant. Without rising wages to keep pace with the run up in services such as health care, transportation, and housing, people end up falling further behind.

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My view is cryptocurrency offers a solution to all of this. Since we are creating a completely new economic system, the rules that apply to the present one are not here. People have the opportunity to grow their stake to the point that it can not only throw off the required money to live, but also to keep investing into projects that grow the entire ecosystem.

At the base layer, we have Steem Power. This is the foundation of all that takes place on this platform. Anyone who is amassing SP is able to substantially expand it through different projects. The act of delegating enables one to support other applications and/or community members to help them grow. Often times, there is some form of payout either through a return in another token, an upvote, or distribution of STEEM/SBD earned through posts/curation.

We see a similar thing evolving with the layer two solutions. Many tokens created on Steem Engine carry the same characteristics as STEEM. Thus, one can delegate to another project while receiving the same type of payouts. For example, by delegating PAL tokens, one can earn INVITE tokens which were designed to help with the onboarding process.

As more gets added to the layer two, along with the expected release of Smart Media Tokens, how is one expected to manage it all? We already see confusion with tokens being dropped everyday.

Here I am going to offer a simple approach that I feel any new person can follow. Bear in mind, these are just suggestions and none of this is financial advice.

Hone Our Focus

Powering up/staking is power. This is a basic concept we need to stress. The Steem ecosystem gives more influence to those who secure their tokens and remove them from the free market. Projects are better served with more people converting the tokens from liquid to non-liquid form. This is what happens when one powers up (or stakes).

If we look at each token as a project or community, we can see how our attention is valuable. We can add value to that project through our activity. By staking our tokens, our influence grows which also makes our activity more valuable. Through the upvote process, we can reward others we find to be active and supportive of that project.

Essentially, what is happening is we are multiplying our effectiveness. By combining more activity with a larger stake, we become one of the leaders of that project.

Naturally, since our attention is a component (ie time) there is a limit to what we can support. Hence the need to concentrate our efforts in a couple isolated areas.

Fund That Project To An Determined Level

Many of us set goals as to what we want to achieve with particular projects, especially when it comes to the tokens. For example, one might have the goal to become a STEEM Dolphin. Or, I have seen posts where people are determined to get 100K SPORTS.

Whatever the level is, set it and work towards it. Use all available resources to get there. This includes not only time/effort but also other tokens.

Through out efforts, we are going to acquire tokens through the stacking process. This is a windfall since it accelerates our ability to reach the goal. Using this approach, we can convert whatever falls outside our present focus area. This will grow the stake in those projects that we are supporting much quicker.

Expand Your Focus Into Something Else

After we reach our determined level of stake, it is time to expand our focus.

This can be done in a number of ways. To start, let us suppose we still support the first project with our activity. That will keep yielding payouts in the native token.

At this point, we can take those rewards and start moving them elsewhere. Perhaps we take all the new payouts (or 50%) and convert them into something different. This will increase our stake in another project allowing us to grow the influence there. Another idea is to take the newer payout and delegate them to another individual or project that is using that token. This will help make that individual or entity grow.

The idea of diversifying is a way to protect oneself while helping the entire ecosystem. We honestly do not know which projects will succeed or fail. There are going to be a lot of tokens that will go to zero for many different reasons. One of them is going to be a lack of support.

By us branching out into different ventures, we throw our support around a bit more. While there is a limit to our time, as our resources grow, we can help more projects through our stake. It is here where the idea that "we are all venture capitalists" comes in. Taking some of the currency we have and letting another use it helps both parties. Be prepared for some to fail.

Rinse And Repeat

Over the course of the next year, just keep doing this. Anyone who follows this will see the accounts grow on a nice percentage basis.

It is not uncommon for one's holding in a particular token to grow a couple percent per day at the beginning. When compounded over the course of a couple months, the totals expand significantly. This makes it easier to start the second venture since there are a few resources feeding into that account (ie 50% of tokens earned from one project being converted to another).

Obviously, there is a time when the growth rate will slow. For example, one with 100K SP would need 1,000 SP a day to grow at 1%. This is not a likely scenario. However, is it far-fetched for an account with 1 SP to earn .01 per day?

The same holds true for most of the tokens on Steem. Take any Steem-Engine based token and apply the same principle. I challenge anyone to see how long he or she can go getting 1% growth per day. Concentrate on that and see how much the total number of tokens grew when the growth drops below that rate. You will be surprised how much you actually accumulated.

Once again, having the resources allows us each to extend our reach. Ultimately, I believe this will generate enormous wealth for everyone involved. However, in the meantime, it makes the ecosystem stronger because other projects are getting some resources that are badly needed. Over time, we are seeing more develop which means the valuable SP is spread thin. Fortunately, we have a fairly consistent value in a token such as PAL which also is desired by many.

One final thought:

Some will ask about the "lottery ticket" idea and holding as many different tokens as possible since they all are, effectively, lottery tickets. A couple could really take off and net a huge payout.

This is most certainly true and a valid approach. However, from my perspective, if one is really looking to grow, the approach I laid out nets better results. The reason I feel this way is the combination of activity with resources. By concentrating on projects we support with our activity, our resources grow that much quicker. This, in the end, will put us further ahead.

The challenge with the "lottery" idea is that most of it will end up as nothing. Hence, we lost an opportunity to put that money to work. If 1,000 different tokens are airdropped, and 950 of them end up going nowhere, that is a lot of lost power. Instead, all of them can be converted and staked into something that we use on a daily basis. This makes our attention in the one or two projects we are focusing upon that much more powerful.

As the ecosystem grows, there will be more opportunities emerging each day. For this reason, it is easy for all of us to fall into overwhelm. Having a plan that we apply and stick to helps a great deal. I know I want to help everything on Steem succeed but there just is not enough time. Thus, I have to make some decisions about what I support. Doing this enhances my impact (I hope) on not only that project, but the entire Steem platform.

We all have this ability. If a couple hundred thousand of us end up doing this, imagine who rapidly things will grow.

Nevertheless, we all have to start somewhere and, for me, I think it starts with the idea of getting behind one project and being involved.

Let me know what you think about this.

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