Author Topic: How much should the hard coded cap on dilution/share issuance be, per year?  (Read 7748 times)

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Offline oldman

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Note:  as market cap grows dilution percentages can fall even as spending increases.... as the system matures fees can cover operating expenses and growth.

This.

Offline xeroc

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You are correct... so we can just make it 50 BTS per block which is *EVEN BETTER* ;)

This is a good amount.

It is lower than bitcoin inflation rate, for sure.  It seems that this is around an 8% inflation rate.
+5%

Offline Mysto

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I personally don't think there should be a hard cap. We don't know what the future holds and we don't know if maybe 20 years down the line we will need DCI (Delegated Capital Infusion) for something very large scale and important. A fixed percent a year is fine but a hard cap is not imo.

The hard cap is like the "debt ceiling of the US government".... they can raise it any time the like but it requires more work and public debate like a hard fork.   So we set a budget for BTSX of 10% per year... $5 million at todays cap... the only conceivable reason for increasing the limit is if the value crashed further and the people still committed to the project needed paid.   If the value goes up then the spending ability will grow with it.    So I like the "bitcoin style cap".... a maximum number of shares per block to be issued... it will decrease as a percentage of the whole.    Bitcoin started with 50 BTC and is now at 25.... I suggest we set ours at 2,500 BTS per block as this is very close to what BTC is doing now.
Ah ok I was misunderstanding what you guys meant by hard cap. I thought hard cap meant that there will only ever be a certain amount of shares and the number couldn't be raised. But it seems when you guys say hard cap you mean the max DCI (delegated capital infusion) per year.

Offline roadscape

I take that back.. we should set it at 500 BTS per block max delegate pay.   Most delegates will be elected with 1% pay or less.

What's wrong with my numbers?

BTC: (25 BTC * 24 hours * 6 blocks/hr) / 13,000,000 = 0.027% inflation per day
BTS: (500 BTS * 24 hours * 60 minutes * 6 blocks/min) / 2,500,000,000 = 0.173% inflation per day

edit: With these numbers, 78 BTS per block would be approximately equal to bitcoin's rate

You are correct... so we can just make it 50 BTS per block which is *EVEN BETTER* ;)

Thanks for the sanity check. The calcs with 2,500 BTS threw me for a loop :)
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Offline Ander

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You are correct... so we can just make it 50 BTS per block which is *EVEN BETTER* ;)

This is a good amount.

It is lower than bitcoin inflation rate, for sure.  It seems that this is around an 8% inflation rate.
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Offline Ander

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In order to cap inflation at 10%, inflation would be 63 BTSX (out of 2 billion) per 10 seconds.
If measuring out of 2.5 billion post-merger BTS, it would be 79 BTS (out of 2.5 billion) per 10 seconds.

This would result in 10% inflation during the first year if the max payout occurred. 
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Offline bytemaster

I take that back.. we should set it at 500 BTS per block max delegate pay.   Most delegates will be elected with 1% pay or less.

What's wrong with my numbers?

BTC: (25 BTC * 24 hours * 6 blocks/hr) / 13,000,000 = 0.027% inflation per day
BTS: (500 BTS * 24 hours * 60 minutes * 6 blocks/min) / 2,500,000,000 = 0.173% inflation per day

edit: With these numbers, 78 BTS per block would be approximately equal to bitcoin's rate

You are correct... so we can just make it 50 BTS per block which is *EVEN BETTER* ;)
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Offline roadscape

I take that back.. we should set it at 500 BTS per block max delegate pay.   Most delegates will be elected with 1% pay or less.

What's wrong with my numbers?

BTC: (25 BTC * 24 hours * 6 blocks/hr) / 13,000,000 = 0.027% inflation per day
BTS: (500 BTS * 24 hours * 60 minutes * 6 blocks/min) / 2,500,000,000 = 0.173% inflation per day

edit: With these numbers, 78 BTS per block would be approximately equal to bitcoin's rate
« Last Edit: October 21, 2014, 09:44:00 pm by roadkill »
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Offline Ander

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I take that back.. we should set it at 500 BTS per block max delegate pay.   Most delegates will be elected with 1% pay or less.

Can you explain that more?
Thanks!
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Offline bytemaster

I suggest we set ours at 2,500 BTS per block as this is very close to what BTC is doing now.

I love this idea!  Yes!!!

Its like the block reward that everyone already understands, yet "we can use the money on useful things". 


It also protects against some bug or scam or something immediately diluting the entire 10% for the year at once!  It has to be spread out over time, so that if shareholders dont like it anymore (because they dont see value in the moneybeing spent), they can vote it down and stop more dilution from occuring.

I take that back.. we should set it at 500 BTS per block max delegate pay.   Most delegates will be elected with 1% pay or less.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline stuartcharles

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I personally don't think there should be a hard cap. We don't know what the future holds and we don't know if maybe 20 years down the line we will need DCI (Delegated Capital Infusion) for something very large scale and important. A fixed percent a year is fine but a hard cap is not imo.

The hard cap is like the "debt ceiling of the US government".... they can raise it any time the like but it requires more work and public debate like a hard fork.   So we set a budget for BTSX of 10% per year... $5 million at todays cap... the only conceivable reason for increasing the limit is if the value crashed further and the people still committed to the project needed paid.   If the value goes up then the spending ability will grow with it.    So I like the "bitcoin style cap".... a maximum number of shares per block to be issued... it will decrease as a percentage of the whole.    Bitcoin started with 50 BTC and is now at 25.... I suggest we set ours at 2,500 BTS per block as this is very close to what BTC is doing now.

Please clarify, the % is the maximum inflation not the amount a budget is set for? Also it cant be pumped out at a set rate, delegates have to make propositions and receive votes.

Please clarify, "So we set a budget for BTSX of 10% per year... $5 million at todays cap" That could sound like i3 sets a budget?

Offline Ander

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I suggest we set ours at 2,500 BTS per block as this is very close to what BTC is doing now.

I love this idea!  Yes!!!

Its like the block reward that everyone already understands, yet "we can use the money on useful things". 


It also protects against some bug or scam or something immediately diluting the entire 10% for the year at once!  It has to be spread out over time, so that if shareholders dont like it anymore (because they dont see value in the moneybeing spent), they can vote it down and stop more dilution from occuring.
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Offline bytemaster

I personally don't think there should be a hard cap. We don't know what the future holds and we don't know if maybe 20 years down the line we will need DCI (Delegated Capital Infusion) for something very large scale and important. A fixed percent a year is fine but a hard cap is not imo.

The hard cap is like the "debt ceiling of the US government".... they can raise it any time the like but it requires more work and public debate like a hard fork.   So we set a budget for BTSX of 10% per year... $5 million at todays cap... the only conceivable reason for increasing the limit is if the value crashed further and the people still committed to the project needed paid.   If the value goes up then the spending ability will grow with it.    So I like the "bitcoin style cap".... a maximum number of shares per block to be issued... it will decrease as a percentage of the whole.    Bitcoin started with 50 BTC and is now at 25.... I suggest we set ours at 2,500 BTS per block as this is very close to what BTC is doing now.   
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline amencon

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I would be in favor of a degrading cap.

The purpose of these capitol infusions is to reach network effect. 

Similar to how a Rocket has stages for attaining escape velocity.  The capital infusion stage should be curtailed and ultimately dropped or near 0%.

Once safely outside the earths strong gravitational forces there should be little need for massive infusion.  Any necessary funding can come from delegate pay at that point.

So how long a window is safe to say we should be well on our way to mars?

10 years?
This seems very palatable actually.  I'd imagine even those against dilution could get behind this plan.

Benefits:
- Yearly cap in place to limit worst case bad or scam dilution plans
- With gradually degrading cap more money is available early when it's likely most needed
- Theoretical absolute maximum supply is finite

Maybe start at 16% cap and reduce cap by 2% each year down to 0?

Not that it means much, but even as someone that is against dilution I would actively support this kind of scheme.

Offline Ander

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Personally my preference would be 10% for 2015 and 2016, falling to 5% after that.  Because that is similar to bitcoin and is thus good for PR purposes.  ("Its just like bitcoin, but we can actually use the money for useful things")

Since that might be difficult technically, either 5% or 10% are fine with me.
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