Hey guys! I recently started becoming quite invested in the Magic Dice casino made by @magicdice as I have quite a lot of shares and I enjoy gambling. I posted an analysis on Magic Credits more than 3 weeks ago and back then I calculated it was incredibly profitable, breaking even at 14 MCs per STEEM wagered.

However, those calculations were done with some outdated information. Recently (less than an hour ago), on the Magic Dice Discord I was informed that the distribution will be from the circulating supply, rather than the total supply. This means at the current distribution rate, our payouts are more than doubled! This has prompted me to recalculate the profitability of Magic Credits

The parameters

• 19.5% has been distributed, but let's say 20% (therefore 3.5 billion shares in circulation) which is 50% of the total supply
• The current volume will stay constant (I'm predicting it will increase but let's be conservative)
• The current volume is 12.8 million STEEM during the past month source
• We earn 1.8% of volume (at most 10% of house edge goes to referrals)
• Investors want 20% ROI on a risky asset
• NOTE: All of these parameters apart from the first one are conservative, therefore estimates on profitability is likely to be conservative

The maths

Let's begin by calculating monthly profitability per 1 million shares.
We can do this by dividing 1 million shares by circulating supply, then multiplying it by 2% of the monthly volume. This yields us a return of around 65.83 STEEM per month, or 789.91 per year. Assuming investors want 20% ROI, 1 million Magic Credits are worth 3950 STEEM.

However, how much can we expect to lose to mine 1 million shares? Currently, you'll earn 25 Magic Credits per 1 STEEM wagered, so you'll need 40,000 STEEM wagered to earn 1 million shares. At a 2% house edge, you can expect to lose around 800 STEEM before earning 1 million shares.

That means right now by gambling, statistically you have are making a 594% return on your "investment"

What if we factored in growth?

• Let's assume a 10% per month growth rate

At a 10% compounding growth rate, we can expect a YEARLY volume of 273 million STEEM, which means approximately 4,914,000 STEEM profit, factoring in the 10% referral bonus.

It will take 9.8 million STEEM (3.5% of 7,000,000,000 divided by 25) wagered before the next distribution halving, then another 28 million (5% of 7,000,000,000 divided by 12.5) wagered for the next halving, then another 56 (previous amount multiplied by 2) million wagered for the next halving, then another 112 million wagered for the next halving, so we'll be 77 million STEEM wagered into the next halving. At this point we'll have a total supply of around 74.6% of the total which equals around 5.2 billion tokens.

Therefore, using our previous formula, you'll expect around 945 STEEM per year which roughly equates to 4725 STEEM worth of tokens.

Price of STEEM

1 million MCs might be worth 4725 STEEM which at the current STEEM prices might only be worth around $1300, but what if STEEM doubled in value, or even tripled? The value of your Magic Credits would double and triple with it. @dreamryder007 suggested STEEM at $2 or even at $20, well you do the maths...

• 4725 STEEM at $2 per STEEM = $9450
• 4725 STEEM at $20 per STEEM = $94500

However, there is high variability...

I've lost around 1,400 STEEM, some of this was lost while I was wagering when it was 100 MCs per STEEM wagered, which means I should have around 6-7 million shares but I have nowhere near that amount.

Statistics aren't always on your side, so BE CAUTIOUS WHEN YOU GAMBLE AND NEVER GAMBLE MORE THAN YOU'RE PREPARED TO LOSE!!

If you have never played before and found this article interesting, please consider clicking here (my referral link) to login for your first time! You won't lose anything for using it and I'll earn 10% of the house edge!

Reminders

• These estimates are fairly conservative
• Only gamble what you can afford to lose
• This is NOT financial advice