Author Topic: Is Diluting BTS 2.5% for +5% BitAsset Yield very low cost to Shareholders?  (Read 8233 times)

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Offline Empirical1.2

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I don't think people parking money in BitAssets and letting it sit there has enough value to us to justify this.

http://www.ofnumbers.com/2014/11/22/approximately-70-of-all-bitcoins-have-not-moved-in-6-or-more-months/

70% of all Bitcoins had not moved in 6 months according to that study, most people are just parking their Bitcoin and letting it sit there, yet it's an incredibly popular token and is accepted by over 100 000 merchants worldwide. Even if there is a lot of parking, increasing the CAP and number of holders makes you a lucrative market and brings utility. Personally I think rapidly expanding the amount of BitUSD and the holders of it, is the first step in getting the DEX and BitUSD to replace banks and getting third parties to offer products and services for BitUSD.

You don't think getting all that BTS off the centralized exchanges and onto the DEX has a lot of value?
You don't think BitUSD having a higher CAP and number of holders than all our Crypto USD competitors combined has value?
You don't think attracting new users + money into BTS who will also learn about The DEX and BitAssets has value?

Even people who just parked their money there in all scenarios would be the equivalent of long term investors that we would have gained  for 1/6th of what BM thinks they're worth...

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...paying individuals to commit funds for longer periods of time... provides enduring value..
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...using dilution as high as 15% on short-term speculators to compensate long-term investors can be very helpful in both securing the network, building loyalty, and creating a profitable system.

http://bytemaster.github.io/article/2016/01/04/The-Benefits-of-Proof-of-Work/

At a future date you could even remove/drastically reduce the yield but you would be left with thousands of BitUSD holders that are now familiar with the DEX and it's other advantages and a lot of BTS that has been removed from the centralized exchanges.

Bearing in mind all that value won't cost you much if you yield harvest yourself, I'm surprised you don't think it's worthwhile.
« Last Edit: February 20, 2016, 05:48:44 am by Empirical1.2 »
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Offline Zapply

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No yield for BitAsset money need to move around then the economy can prosper. BTS need too be saving for people then BTS have value

Offline Troglodactyl

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I don't think people parking money in BitAssets and letting it sit there has enough value to us to justify this.

Offline Empirical1.2

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I think knocking those very restrictive 5 BTS/sec cap is in order...
By the beginning of March the dev. alone will have to start in-fights to get above the threshold of being paid or not. Add BM's liquidity spending, and you yourself have 2 ideas in 2 days how to spend those funds. To say nothing that 10% is better than 5% so you can use a little extra.

What is a good number to last us say at lest 6mo? 50 BTS/sec? Sounds good?

On other benefits of dilution read and listen to BM. How to put yourself in 'Dilution (or Delusion) state of mind, read my other posts'.

I also don't like most of the ideas I've seen for dilution.

This one seems fairly circular/low cost though in that any BTS shareholder can easily avoid this particular dilution by yield harvesting but getting them to do so gives us a lot of benefits I think.

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On this particular proposal - give 50% to shorters and 50% to smartcoin holders. Yield harvesting still yields the same, just some crazy short my sell into this newfound bitAssets demand.

You're probably right here. I suppose the weighting could also be adjusted depending on how the market responds.

I think lowering forced settlement to 98/99% would also be beneficial.

If you want to take the island burn the boats

Offline tonyk

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I think knocking those very restrictive 5 BTS/sec cap is in order...
By the beginning of March the dev. alone will have to start in-fights to get above the threshold of being paid or not. Add BM's liquidity spending, and you yourself have 2 ideas in 2 days how to spend those funds. To say nothing that 10% is better than 5% so you can use a little extra.

What is a good number to last us say at lest 6mo? 50 BTS/sec? Sounds good?

On other benefits of dilution read and listen to BM. How to put yourself in 'Dilution (or Delusion) state of mind, read my other posts'.


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On this particular proposal - give 50% to shorters and 50% to smartcoin holders. Yield harvesting still yields the same, just some crazy short my sell into this newfound bitAssets demand.
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline donkeypong

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Great initiative on suggesting this (or at least exploring the idea). I think we should do something to jumpstart liquidity, and having a yield has always made sense to me. That was supposed to be a part of BitShares before being sacrificed. As for the numbers, I'll let those who are smarter than me take a look at your suggestion. If it is sound, then thumbs up from me.

Offline Empirical1.2

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BM recently suggested diluting BTS at a rate of up to 3% a year to subsidize market liquidity, https://bitsharestalk.org/index.php/topic,21544.0.html

This got me thinking about diluting for BitAsset yield and I realised the cost to shareholders could be fairly neutral? provided they were willing to yield harvest but doing so possibly has a lot of worthwhile benefits...

What are the benefits of diluting for BitAsset yield, (which you could mitigate by yield harvesting.)

- BitAssets would offer the mythical +5% yield at a time when banks will be moving to negative interest rates.

- The BitAsset CAP would increase and we would become in nominal terms the Crypto USD market leader.
(Instead of only being percieved to have 2% market share atm.)

- Hundreds or thousands? Of BTS shareholders who haven't used the DEX before would be holding BitAssets.
Now we and other businesses  can start pricing & offering products in BitAssets because most shareholders hold it.

- This would get people to remove their BTS from the centralized exchanges and move it to the DEX

- With hundreds of people moving in and out of BitAssets and also lots of demand for them due to yield it would positively affect liquidity.
(That's not to say other liquidity centric measures couldn't be adopted if shareholders agree the cost of diluting for yield is fairly low considering it can be mitigated by yield harvesting?)


This is not dissimilar to POS minting rewards where the coin is diluted but to avoid it, you just have to make the effort to take part in the minting process which usually infers some benefit to the coin such as security/mining/removing supply etc.

Other:

Diluting 2.5% creates at least  +5% BitAsset yield because at most only 1/2 of all BTS could be in BitAssets while most of the other 1/2 would have to be short those BitAssets? So 2.5% dilution translates to at least circa 5% yield on BitAssets I think.

BTS could decline in value reducing relative yield but as not everybody would yield harvest, a lot of BTS remains unclaimed, many remains on exchanges and many short term speculators and traders would not get involved, it's likely the BitAsset yield would consistently be much higher than  +5%

Edit: (There might be something simple I'm missing here of course)




« Last Edit: February 20, 2016, 03:23:29 am by Empirical1.2 »
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