Strategy

Disclaimer: these strategies have been developed by active Amber players and community members, not the team. If you want your strategy guide published here, please contact the team.


Price/Dividends (P/D) Ratios - by @Yostari#6273

2018-09-18

The P/D Ratio is a good metric for determining the value of a gem relative to other gems. It is calculated by dividing the cost of lighting a gem by the total dividends earned by that gem to date. All of the information required to make this calculation is contained in the picture of the gem. In this example, there are three gems; gems 55, 56, and 57. The calculation of the P/D Ratios for these gems would be determined as follows:

Gem Cost Dividends P/D Ratio
55 10.182 1.0925054 9.3199
56 4.887 1.0602965 4.6091
57 11.446 1.0013363 11.4307

Gems 55 and 57 both have a much higher cost than gem 56, however all three gems have close to the same total dividends to date. This is because gems 55 and 57 were likely more recently lit, causing their cost to increase by some factor greater than two. At this position in the chain, Gem 56, with a P/D Ratio of 4.6091, is pretty ripe for lighting. Let’s see what happens when Gem 56 is lit. After lighting gem 56 for 4.887 ETH, the P/D Ratios for the three gems become as follows:

Gem Cost Dividends P/D Ratio
55 10.182 1.0925054 9.3199
56 10.654 1.0602965 10.0481
57 11.446 1.0013363 11.4307

Since the address that lit gem 56 now owns gem 56, it has become highlighted. The cost to light gem 56 also increased to 10.0481. When lit, gems will increase in cost by a factor of >2. In this case, gem 56 increased by a factor of about 2.18.
Of the 4.887 ETH used to light gem 56; 50% went to the previous owner, 5% went to the associated referral, and the remaining 45% was paid out as an equal dividend to the previous owner, and the owners of all the gems below it. This would mean that the Amber and gems 1 – 56 all received an approximate dividend of (4.887 x 45%) / 57 = 0.038581579 ETH.
What determines a good P/D Ratio for lighting a gem is completely subjective. However, there is a strong tendency for P/D Ratios to decrease (i.e., improve) as you go further down the chain.

Note: please follow the link to see the original post with graphs and illustrations on Medium.


First Strategy Guide - by @NelZero#5638

2018/09/09

Here’s some thoughts and strategic buy orders that will help maximum potential and earnings (imo).
When buying multiple ones, try to set up the buys so that the Gem order is lowest number first followed by trailing up to highest — example being: gem no.1 (first buy)-2-3-4- gem no.5 (last buy).
That way you can piggyback on the 45% distribution which is a big added boost as some of you probably already know.
I've tried to give examples in a wide range to paint a better picture
Examples of some Chains (what seemed like cheapest/best value -- at time of writing):
Gems: 10-11-13-14-15 or pick the 3 cheapest being 10-13-14
Another one:
16 - 18 - 20 - 21 - 22
25-30 might be a viable again while trying to keep a better position at below gem no.30
The lower numbers have staying power and better positioned to accumulate distributions. Also you might find that a gem in front of yours gets sold and you get rewarded with a bigger than usual slice of pie. The lower gems typically have a good number of gems in front that could spell for nice distribution payouts.
The higher gem no. are nothing to sneeze at though. For instance, 37-50 provide some attractive value buys with gems being around or below 2. And gems above no.50 are cheap at below 1.0 for relatively fast sale but the trade off is that net profit of sale will be lower than others and you might miss out on distributions however profit is still profit. They all have their pros and cons.
Ideally you would want to start with the lowest gem no. to maximum piggybacking and distributions, as well as higher returns if someone takes your gem.
Or you may try to spread out your buys to try to increase number of gems in your holdings rather than starting out with one with max earnings.
You may even try to implement a mixed strategy. Hope this gives people some insight.

Note: please contact the author in our discord channel for more explanations and info.