Early Valuation of mcxFEE's

 

I'm not intending to make a buy/sell recommendation about mcxFEE's, but I would like to shed some light on the math required to determine a valuation.

I've been tracking the fees that I have received from holding shares of mcxFEE at mcxNOW.  I'm only missing a few points of data from the first day that I don't have access to since I do not have a Pro Account. Here's how it breaks down.

The average fee per share of each currency that is distributed every 6 hours is currently as follows:

  • BTC - 0.00000799
  • MNC - 0.00003218
  • LTC - 0.00012731
  • XPM - 0.00024890
  • SC - 0.00008902
  • DVC - 0.01376512
  • WDC - 0.00193094
  • CL - 0.00007205

At current exchange rate prices (9/14/2013 @ 2:45PM PST), the approximate average value of each distribution is 0.00001143 BTC.

Given this current average, the annual distribution total would be 0.01668558 BTC.  As the current market price of one share of mcxFEE is about 0.5 BTC, each share yields 3.33711628% annually.

Keep in mind that this does NOT include the compound interest that an investor would additionally earn every 6 hours since all deposits now earn interest based on a fraction of the exchange fees.

This also does NOT include the potential growth mcxNOW.com may experience as they provide a financial incentive for investors to switch exchanges, since to the best of my knowledge, no other exchange currently offers any interest.

One other note to consider:

mcxNOW says that "Another release [of an indeterminate number of mcxFEE shares] is scheduled for late 2013 or early 2014." My assumption is that a new release of these shares would not affect the current percentage of the fees that go to mcxFEE (which is 5% split equally among 5000 shares of mcxFEE), but the guarantee is not perfectly clear:

"mcxFEE shares are guaranteed for life. You will never lose them unless you sell them. The exchange will never take them down. A share will be worth 0.001%, or if it is decided in the future a different percentage per share is better then all existing holders will receive a percentage based on their current ownership."

Full Disclosure: This should be obvious from the fact that I wrote this synopsis, but I own several shares of mcxFEE.

TL;DR - A current estimation of the yield of a share of mcxFEE is about 3.337%, but this does not include other factors that could potentially increase that yield.