@tipU Guide #4 - Sharing the Profit Explained

Hi there!

Welcome to the fourth tutorial explaining @tipU service - this one will explain how and why @tipU shares it's profit.

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Please feel free to check out previous guides:
#1 Making deposits and withdrawals
#2 Sending tips with @tipU
#3 Checking your balance and other useful @tipU commands

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How @tipU shares the profit

On daily basis @tipU checks it's SBD balance and compare it to the sum of all deposits. If the difference is positive and greater than 20 SBD, 50% of that difference is divided and added to users deposits. To make it as fair as possible, the added value is proportional to the deposit. So everyone gets for example + 1% of their deposit: if your deposit is 1 SBD - you get 0.01 SBD, if your deposit is 100 SBD - you get 1 SBD. The other half of the profit is used to buy and lend steem power, use Promote functionality and other services that helps to promote the service.

The 20 SBD threshold is implemented to ensure that also very small deposits will earn at least 0.001 SBD. If the service would try to divide, let's say, 0.10 SBD, only biggest deposits holders would earn the interest.

I like to think that the higher the deposit is, the more willing the user is to spend it on sending tips - but of course it's not always true and doesn't have to be. If you want, to can treat @tipU as a SBD bank, keep there your SBD and not send any tips at all. But sending tips is fun so I'm sure that soon or later you will share some love ;)

@tipU will inform you about each deposit increase with a message like this:

The service could send the profit share directly to the user instead of increasing the deposit (which you can withdraw at any time you want) but I think that increasing the deposit encourages to send more tips. If you have different opinion on this matter, please let me know :)

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Where does the profit come from

• posting - currently I'm finishing series of guides for @tipU - next series will be about useful steemit tools and then most probably series of tutorials on how to build your own steemit app. Generally useful stuff, no spam
• upvotes of @tipU comments - steemians and @tipU from time to time upvote tip comments
• investment in @minnowbooster - delegating SP to @minnowbooster and other users trough the SP delegation market - which gives daily payout
• donations

Please keep in mind that users deposits are not being used for any investments - so the task to earn SBD rests only on @tipU shoulders :) I met suggestions to invest some of the users deposits (like real banks do) but I can't see any investment opportunity on steemit.com that would justify the risk and transferring SBD out of steemit to, for example, exchanges is too risky as well.

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Why share the profit

• I really like the idea of paying small dividends to the investors (although deposits are not being invested) - I wish more services would do that on steemit.com - the only other I know of is @minnowbooster
• It helps to spread the SBD reward more evenly across users, which in my opinion is better for steemit ecosystem, than hoarding it all under one account - especially when the success of the service depends on the community
• Hopefully earning interest encourages to send more tips and share the SBD reward even more

If you have any questions, let me know in the comments. See you next time!