28 Jun Symbol: How I learned to stop worrying (about the price) and love the harvest

by XHarvesting

I should start by saying that I love harvesting and for anyone that holds more that 10,000 XYM you really should be putting your XYM to work and earning a passive income. It may not provide enough money to let you quit your day job and retire (unless you are a XYM super whale) but it is a great way to increase your XYM stash over time without having to spend a penny on the exchanges.

Anyone who has been harvesting since the Symbol launch will have noticed that the difficulty of harvesting a block has increased during this time. This is due to the growth in the number of harvesting accounts, and more importantly, the total importance of accounts harvesting increasing over this period. At Symbol launch only people who had opted in themselves from their NEM wallet received their XYM tokens meaning that there was less competition. However, over the last couple of months more and more exchanges that supported the opt-in have released coins to their customers leading to more XYM being withdrawn to wallets and used to harvest.

I only started tracking this on 17^th April 2021, but at that time 1,318.6 million XYM were being used to harvest. As of 25^th June this number had shot up to 1,844.5 million, representing a 39.9% increase. This equates to a significant decrease in harvesting returns when comparing these two periods and is likely incomplete since those harvesting on non-API nodes will not be captured in these stats.

To make things more complicated, Symbol’s block rewards decrease over time in a similar way to Bitcoin. In Symbol’s case although the block rewards halve every 4 years, it happens incrementally. This results in an adjustment every 3 months rather than a single large drop at the end of the 4 year period. Since the Symbol mainnet went live there has been one adjustment which resulted in a small decrease in rewards from around 134 XYM to 128XYM per block.

What do I need to do in order to start harvesting?

All you need to start harvesting is a Symbol wallet and 10,000 XYM (plus an extra XYM or two for fees). It’s super simple to set up. Just deposit your XYM in your wallet, wait 12 hours so that you are assigned an importance score. Then go to the harvesting section and enable delegated harvesting. You can select a node URL of your choice (and can enter a custom node). If you would like you can delegate to my node http://xymharvesting.net:3000

As of now (27/06/21 at 11:01 UTC+1) XYM is trading at an average price of $0.106 according to Coinmarketcap. This allows you to buy enough Symbol to start harvesting for around $1060 (or enough to start a 1M XYM SuperNode for $106,000). So buying enough XYM to harvest is a lot more accessible now than it was previously (I bought at the wrong time!).

How much can I expect to earn from harvesting?

This is a difficult question to answer since, as explained earlier, it is very much dependent on the total proportion of XYM, or more correctly the sum of the importance of all harvesting accounts. Account importance is roughly equivalent to account balance but as Symbol uses a modified Proof of Stake mechanism (POS+) there are some subtle differences. POS+ also considers the amount of fees the account has paid and the number of times that the account has received a node beneficiary payment both over recent blocks. Those running their own nodes or that are very active on the network are rewarded, to a small degree, in the POS+ calculation. According to the documentation the additional factors outside of stake tend to give more of a bonus to lower balance accounts but have very little effect on high-balance/importance harvesters (explained here).

Anyway, as total harvesting balance/importance on the network increases the likelihood of you harvesting a block decreases unless you increase your importance accordingly by buying more XYM. Looking at the numbers in Figure 1 above we saw that the total harvesting balance increased by ~40% between April 17th and June 25th. This would mean that if you were making 10 blocks a week in April you might expect to only be making ~6 blocks a week now. However, looking at the same plot you can see that the weekly increase is starting slow and will at some point plateau. The unstable probability of harvest success coupled with changing income due to changing block rewards makes it difficult to accurately estimate an annual return but at this point in time it appears to be somewhere in the region of a 7.5% APY.

Harvesting income experiment

I made a very simple harvesting calculator to get a ballpark figure of harvesting income based solely on account balance but I wanted to see how accurate it was using actual harvesting data. In order to do this I obtained a list of all accounts harvesting on every node on the network. Then I retrieved the total amount of XYM that each account had harvested on 04/06/21 and compared this figure with the total amount harvested three weeks later on 25/06/21. For each account I took note of the balance on both dates and excluded any accounts where deposits and withdrawals were > 100 XYM.

After filtering results for large changes in balance due to deposits/withdrawals (but not harvesting income) I ended up with 6,284 accounts. I used these to look at the relationship between account balance and harvesting income. This plot shows estimated harvesting income over a 1-week period vs account balance based on actual data (I only included a range between 10k and 1M XYM in the plot). As you can see you might expect to harvest around 1430 XYM a week with a balance of 1,000,000 XYM.

This roughly agrees with the simple harvesting calculator I made which estimates that an account with 1M XYM will make around 11 blocks per week (11 * 128 = 1,408 XYM). I update the calculator each week to try to keep the calculations relevant.

There are some complications here since high value accounts will likely be harvesting on their own nodes and will then earn more from each block. This is because they will also receive the beneficiary income, it’s like a tip that you pay to the node you are delegating to each time you harvest. This helps cover the cost of them maintaining the node.

As harvesting is a numbers game and relies on probability, some weeks you will be lucky and earn more and other weeks you’ll be unlucky and earn less. These numbers are an informed guess given the current data.

Why should I be harvesting?

So I told you that you should be harvesting and then flooded you with uncertain numbers! My advice is to hold onto your XYM, harvest and forget about it for a few weeks/months/years. Just delete your favourite portfolio tracker, stop checking coinmarketcap and stop worrying about the current price of XYM or the general health of the crypto market. Once you’ve done this you’ll feel more relaxed, I promise 😄 These are my top 5 reasons (or at least first 5 that came to mind) for harvesting XYM:

1. Harvesting is free and easy – just hold your coins in your own wallet and delegate to your node of choice. That’s literally all you need to get started
2. Your funds are not locked for a set period as with other coins. You can withdraw your XYM instantly at any point in time
3. If you buy whilst the price is low, hold and earn more then if you (really have to) sell in the future when the price increases then you will have more coins to sell then too – it’s a double win!
4. Couple your harvesting with NEMHub earnings for HODLing and you are earning XYM twice for doing absolutely nothing
5. It’s fun! There are Telegram bots such as XYMHarvestMonitor that will ping your phone when you get a harvest – always brings a smile to my face! 😀

Thanks for reading, if you like you can follow me on Twitter @XHarvesting