Deflationary Development Model -- Join my experiment

[jsidhu]

We can work with it.. With ten pct inflation max there will be enough bts to dilute and bts holders wont be mad cause thee is an inflation target per year... Msin thing is that there will be deflation from failed dacs which are majority

[BTSdac]

Voting for Merger Proposals on both sides (BTS and DacAsset holders) occur, and both need to achieve a 'critical mass' (again, definition to be defined). When this happens, all DacAsset holders are issued their share of BTS, all their DacAsset is burned, and the Dac's functions can now be operated in BTS.

Dood idea ,but it is very difficulty to real marketing , if there are any information that one DAC would been merged in BTS, this information will cause the price of this DAC rise much.  many new investor  come up to buy this DAC, if give too many BTS to this DAC holder , this harm BTS holder , at the same time if give too few BTS to this DAC holder it will cause new investor of DAC unsatisfy.
you know you cannot make everyone satisfy. even if only 1% DAC holder unsatisfy.
if enforce merge this DAC ,reputation of BTS will become bad.

[Geneko]

@fluxer555

Very nice work, please continue.

[jsidhu]

I don't have time to read everything here, but I just wanted to share some new revelations:

- A Dac created through DacShares could easily be profitable on it's own within the Bitshares SuperDAC by simply charging fees in BTS, and instead of giving them to delegates, give them to DacAsset holders. The statement in my original proposal about how (paraphrased) "it's in the favor of the Dac to have all operations done in terms of the DacAsset to retain value within the Dac" is wrong. This means that even though the Dac is not giving profits to all BTS stakeholders, it is still in a mutually beneficial relationship with BTS. Since SuperDAC merger isn't the only way to profit long-term from investing in a DacAsset, this makes the investment much more attractive.

- Mergers can also happen between two or more DacAssets.

Smarter Risk Management:
- A process of 'slow burning' locked-up BTS while slowly issuing the DacAsset and Developer Stake mitigates risk from investors.
- A way to vote out / change developers mid-development
- A way to 'Cancel' development, stopping the slow-burning/distribution process and returning remaining BTS to original investors
- A way to open up more rounds of capital infusion for a DacAsset

- My whole DevShares implementation is flawed... DevShares should be issued per Dac, not per Developer.

I'll have a new proposal ready by next week.

Yes I talked about the 3 use cases please review.. it's your proposal but I generally agree with most of the stuff and clarified others...

[fluxer555]

I don't have time to read everything here, but I just wanted to share some new revelations:

- A Dac created through DacShares could easily be profitable on it's own within the Bitshares SuperDAC by simply charging fees in BTS, and instead of giving them to delegates, give them to DacAsset holders. The statement in my original proposal about how (paraphrased) "it's in the favor of the Dac to have all operations done in terms of the DacAsset to retain value within the Dac" is wrong. This means that even though the Dac is not giving profits to all BTS stakeholders, it is still in a mutually beneficial relationship with BTS. Since SuperDAC merger isn't the only way to profit long-term from investing in a DacAsset, this makes the investment much more attractive.

- Mergers can also happen between two or more DacAssets.

Smarter Risk Management:
- A process of 'slow burning' locked-up BTS while slowly issuing the DacAsset and Developer Stake mitigates risk from investors.
- A way to vote out / change developers mid-development
- A way to 'Cancel' development, stopping the slow-burning/distribution process and returning remaining BTS to original investors
- A way to open up more rounds of capital infusion for a DacAsset

- My whole DevShares implementation is flawed... DevShares should be issued per Dac, not per Developer.

I'll have a new proposal ready by next week.

[luckybit]

I thought we were targetting businesses and not charities... we have to figure out what "persona" we wan't to  be perceived as to the world.

If you want my opinion on the best strategic personas to adopt I would say NGO, non-profit, cooperative, or social enterprise. In the United States I would say if you're an American then you should not start a corporation. Start an NGO, non-profit, cooperative or social enterprise.

An example is the COG Cooperative. Study the COG Cooperative because I think strategically they are the best structure for American organizations in this space if you're trying to avoid regulation. In fact it was so effective that they got on Apple's IOS before everyone else with their Pheeva wallet. So they are an excellent case study on the right way to do it.

COG Cooperative
The freedom of bitcoin. The power of a network.
Social good through financial freedom.

COG is a cooperative that provides members with the best applications and services in the Bitcoin marketplace. COG members receive free access to world class Bitcoin applications, revenue sharing, and exclusive discounts with partner merchants.

http://cogcoop.com/

I suggest we form a Bitshares Cooperative ASAP using the same successful techniques used by the Cog Cooperative. Then use that Bitshares Cooperative in a similar fashion as the Cog Cooperative where the members of the Bitshares Cooperative are verified "trusted" users of Bitshares X. US Citizens should be encouraged to join this Bitshares Cooperative which could then solve some of the problems we are talking about here.

We need a legal persona and I think a Bitshares Cooperative is the best way to do it.

A cooperative is a business owned by its members and operated for the benefit of all involved. Join COG to become part of a network focused on providing social good through financial freedom, and earn bitcoin while doing so.

^ Isn't that exactly what Bitshares is trying to do? So why don't we form a Bitshares Cooperative and do exactly what they are doing? Then let everyone who has shares in Bitshares SuperDAC join the Bitshares Cooperative? The Bitshares Cooperative would simply mirror the blockchain decisions by shareholders but this would provide a legal entity to interact with which isn't Invictus.

I agree on wording and language to avoid regulation but really the larger problem as long as the company is active is having centralization points of failure... like you said if we are able to have algorithmic methods and processes to recieve inputs into DACs and provide outputs(monetized outputs or other subjective outputs somehow measured).. we will essentially be mostly there.. and I think Turing completeness would help in that regard... the problem I have with a  charity or gift environment is that it wouldn't attract those that are strictly looking to invest in ideas and innovation

That is not true. It attracted all of us. We all donated either our computation resources (mining PTS) or gifted Invictus Innovations through AGS. If it worked for us then it could continue working and there is no reason to see ourselves as investors unless you want to invite the SEC to interfere.

I think also if you position yourself as a charity you can get more support from governments, non-profits, educational institutions, etc.

and those who can develop but don't have the time or capability in developing for free just to build a rep.. the rep should help attract more investors in your future endaevors but should not hinder new dev's from trying to enter the system to develop new DACs and ideas. The rep system would be an incentive system to keep dev's around for longer rather than one and done.

There are no investors. While having a good reputation will make it more likely that people will value your presence and reward your contributions it does not guarantee anything. So you have to use what I'll call algorithmic psychological conditioning. There isn't a better word for what I'm trying to describe but that word seems to fit well, and the outcome is that the community is culturally conditioned to adopt certain ritual gifting/giving. It's not all that different than the social consensus we have now only more formalized and encouraged within the source code in the same way tipping miners is voluntary but encouraged.

THe prediction market of investors (donators) choosing the right DAC proposals and people to invest (donate) in will depend on their needs, and may open up other forms of interesting technology advances for bts that we can't foresee right now. It would not only help grow the system and those who hold bts or invest in the ecosystem but help provide valuable utility to anyone who wishes to use the system for low cost and high benefit even if its fora  short amount of time. However we word it.. we have to keep in mind that essentially we are targeting a restructing of the way we do business.. and if we are saying lets think of business as charity sure.. but it would be alot harder for people to flip that switch rather than what is proposed here...

As I said earlier you have to weigh risk vs benefit. Do you want to open yourself up to regulatory scrutiny or do you want to promote innovation? In the United States you risk regulatory scrutiny if you do things in the wrong way. I only get annoyed when I see the community or developers give up on the goals or the innovations when they have the option to simply do things differently.

How many times do we hear that developers have to ban all US investors? If they just ban all investors from their platform then it solves the problem. No investors allowed and you can accept every gift from anyone as a donation. If you want Americans to be able to innovate without the BS nationalist politics interfering then this is the only way it can be done because the alternative is to just price in black swan events which has a high cost (perhaps $100,000 per delegate just to price in the risk of an SEC crackdown and fine).

I think we can draw some similarities.. however the rep system is pretty short and simple and I was hoping that you would compare the proposal with your proposal from the use case perspective as it would take alot longer for me to break your proposal down from its true intentions and translate it to what this proposal's true intentions are.

I'm honestly not always the best at explaining ideas. I think someone like Stan can look it over and explain it better than I can. What I am good at is understanding concepts and the language. I know also cite my sources and the COG Cooperative is an example of the right way to do it while the corporate model is the wrong way. Bitshares Music Foundation is a good way to do things while a Invictus Innovations Inc was the wrong way. COG Cooperative in my opinion is the best way because you can actually distribute shares through the cooperative legally, distribute gifts or profit sharing legally.

Just to clarify, I'm not a lawyer so check with your lawyer but I believe it can be done legally this way.

So in short:

1) Harder to flip the switch in the minds of the business world from a business oriented (investor/developer) sort of world to a charity gift environment (give/take) credit based world. We have to figure out what we want to be perceived as. What's our niche.

The Gates Foundation is a charity. I don't think there is a lack of money in the charity world. It's just a different kind of marketing that goes into charity. I think charity is actually a better way to do it because you get tax breaks for your donations. Also the decentralized autonomous social corporation can actually have values built into a constitution while a pure decentralized autonomous corporation only has to profit for shareholders. A lot of DAC developers are interested in decentralization for philosophical reasons, and they also might have a social mission which matters to them as much as making a profit does.

2) get the idea of working for "free" in a charity and it would turn people off who simply can't afford to work for free... even to try to build a reputation.

None of us here would be turned off by the opportunity to be in that environment. You work for free but your reputation itself has value. So you work to earn reputation points which have value. How is it different than saying that DAC developers now work as volunteers on these DACs and if the DACs become a success they often become millionaires? Enough DAC developers become millionaires working for free and everyone will want to work for free.

So the idea that people working at anything are working for free is not true. If you work for reputation then reputation itself is an asset which could be later exchanged for whatever you need. For example if you're a developer with reputation then the DAC could pay you in BitUSD as long as your reputation is good enough that you can remain a delegate.

What I am saying is that the prediction market of DAC proposal approvals through voting would negate the "bad actor" effect of bad dev's doing one-offs to try to propose and run off with dev funds... in this proposal those funds get burned anyway because they are not merged in and the DAC is not used or providing profits. The rep system precluding payments like what you are suggesting would stop bad actors but it would also stop good actors and that is more important.

Prediction markets as you're defining it could open you up to a black swan regulatory event. I'm not totally against taking risks but if you're someone who wants to accomplish the same level of innovation without having to take that risk then there are other ways.

I think prediction markets are in the grey area but at any time the authorities could put it in the black area and now you'd have to shut your entire DAC down. I think if you have the DACs set up in such a way that the DAC can take a different form in different jurisdictions then it can be truly global.

Bitshares X in the United States might have to be done different to how it could be done in another country. The point is you don't want US authorities to influence global innovation just like you don't want Chinese or Russian authorities to stop innovation in the US.

In the end you can't stop scams.. and an equilibrium will be achieved whereas some people willw ant to hold bts due to scams and others will get "good" at choosing the right dev's and hit the lottery as they end up being tech innovations and the devshares become worth alot as they get merged in or operate as a sole DAC.

You could say that the entire altcoin industry is a prediction market if you want to look at it like that. But why use the words prediction market? Why go there? On some level you will have greedy people who will donate just because they think they'll get something back but you should tell these people that it's charity and that there is no guarantee they'll get anything back. If anyone gets anything back it's because other people were honorable and not because they are owed anything.

Investors who want to do it properly will have the SEC to protect them from scams but if you're donating then there are processes to protect you from fraud even in charities. So use those processes and advance them with algorithmic mechanisms.

As time goes by... the prediction markets will get better and more people will become trusting and good at filtering out those who are bad... bad actors will have to get more creative and good actors will benefit from being able to develop to earn.

Rather than calling it a prediction market why not just call it a prediction algorithm? Change your language if you don't want to confuse regulators.

Both proposals offer this.. and the voting process integrates reputation based on what they have contributed so as a dev it pays to do good work and stick around. As you get vetted you will get funding easier... if you screw up.. funds are burned before any DAC is merged anyways... so no harm to BTS as a whole... but that is the risk you take to "invest" in the bleeding edge.

On this we agree. Our goals are similar here and we just have to adopt language which is better for US citizens. In some countries you can set it up so there are "investors" and the like but if what you said in other threads on this forum is true and the SEC is psychotic enough to persecute the entire altcoin industry then perhaps it's just easier for Americans to ban all investors from all the critical platforms. If platforms in other countries want to set it up where they accept investors then they can but in the United States you'll have to accept that you cannot be an investor and all of your transactions to support your cause are donations to charity.

This doesn't mean you don't have any rights or that the smart contracts cannot enforce things so that you're likely to be made whole, it simply means that no organization or person owes you anything directly.

[jsidhu]

Replace the words "Investor" with "Patron".
Replace words stock/shares with "gifts". Gifts can include stocks/shares but aren't limited to that.

Read my thread on the gift economy approach.  All who give earn a reputation and all who take earn a reputation. There are givers and takers. Leechers lose credit for everything they take and givers earn credit for everything they give to a DAC. The DAC could give gifts back to donors, or some other DAC could reward the generosity with gifts to the givers.

https://bitsharestalk.org/index.php?topic=10397

Reputation is only a small part of the developer focus in this proposal yet it seems effective and simple. Can you outline the pros and cons of your idea over this one wrt reputation. Seems thats what you are talking about  an approach that centers around reputation while this one focuses more on the usecases and is easier to understand for me personally. Specifically if you intend to replace this proposal please use the use cases in my post above to show how they would work in your proposal...

You said earlier that the SEC and regulators could attack the delegates, disrupt the innovation process, and so on. Above all else I think we have to preserve innovation in this space and if that means dropping the corporate investor model then drop it.

So you cannot use words like investors. You have to call them patrons. You cannot "crowd fund" or do "crowd sales". You can set up charitable organizations, NGO's, and let people donate to them to support development. A DAC can function as a social benefit corporation which would have the benefits of being charity like.

I'm not saying we need inflation or deflation. My suggestions involve removing all promises, all guarantees, and going with a reciprocity model where people who give the most to the DAC receive the most rewards from the DAC.

It doesn't require any "investors", "IPOs", or anything like that. Remove all the corporate language and replace it with more suitable metaphors. Donate to charity to become a "member" of the DAC. After becoming a member then the size of your gift gives you a ratio or an amount of credits. That numerical signal gives you a reputation as a giver and people who know you're a giver are more likely to give to a giver because it improves their reputation.

All of the enforcement functionality could be in the form of smart contracts or hard coded into the DAC. Take a look at BitTorrent ot see how you can trade data around without using the investor model. In BitTorrent the seeder takes on a similar role to the investor only the seeder isn't promised anything in return by anyone. The seeder gets reputation points for seeding and the network can then compensates them with increased access.

So you can use completely algorithmic methods and mechanisms to get people to provide resources to a DAC in ways which don't involve opening doors for the SEC to get involved by simply removing all the investors. A DAC which is supported by volunteers, charitable organizations, NGO's, and gift donations, does not have investors. It instead has benefactors and the top benefactors would have a reputation for their service which would be noted by the DAC itself.

The problem with doing a gift economy in the physical world is we did not have decentralized reputation. We did not have a distributed ledger which could account for every activity of every participant in the community. Now we have the capability to actually know who the givers and takers are in any community, we can know who provided support to the DACs and who just leeches. We can choose to gift to the people who "do the right thing" without any legal obligation.

To improve the ideas presented by the OP, remove investors from it, replace it with supporters. Supporters should become the nobility of the DAC, so you could make the top supporters of the DAC into delegates, or the DAC itself could be designed to give it's top supporters shares in itself, without any human beings treating the supporters as investors.

I thought we were targetting businesses and not charities... we have to figure out what "persona" we wan't to  be perceived as to the world. I agree on wording and language to avoid regulation but really the larger problem as long as the company is active is having centralization points of failure... like you said if we are able to have algorithmic methods and processes to recieve inputs into DACs and provide outputs(monetized outputs or other subjective outputs somehow measured).. we will essentially be mostly there.. and I think Turing completeness would help in that regard... the problem I have with a  charity or gift environment is that it wouldn't attract those that are strictly looking to invest in ideas and innovation and those who can develop but don't have the time or capability in developing for free just to build a rep.. the rep should help attract more investors in your future endaevors but should not hinder new dev's from trying to enter the system to develop new DACs and ideas. The rep system would be an incentive system to keep dev's around for longer rather than one and done.

THe prediction market of investors (donators) choosing the right DAC proposals and people to invest (donate) in will depend on their needs, and may open up other forms of interesting technology advances for bts that we can't foresee right now. It would not only help grow the system and those who hold bts or invest in the ecosystem but help provide valuable utility to anyone who wishes to use the system for low cost and high benefit even if its fora  short amount of time. However we word it.. we have to keep in mind that essentially we are targeting a restructing of the way we do business.. and if we are saying lets think of business as charity sure.. but it would be alot harder for people to flip that switch rather than what is proposed here... I think we can draw some similarities.. however the rep system is pretty short and simple and I was hoping that you would compare the proposal with your proposal from the use case perspective as it would take alot longer for me to break your proposal down from its true intentions and translate it to what this proposal's true intentions are.

So in short:

1) Harder to flip the switch in the minds of the business world from a business oriented (investor/developer) sort of world to a charity gift environment (give/take) credit based world. We have to figure out what we want to be perceived as. What's our niche.
2) People get the idea of working for "free" in a charity and it would turn people off who simply can't afford to work for free... even to try to build a reputation. What I am saying is that the prediction market of DAC proposal approvals through voting would negate the "bad actor" effect of bad dev's doing one-offs to try to propose and run off with dev funds... in this proposal those funds get burned anyway because they are not merged in and the DAC is not used or providing profits. The rep system precluding payments like what you are suggesting would stop bad actors but it would also stop good actors and that is more important.

In the end you can't stop scams.. and an equilibrium will be achieved whereas some people willw ant to hold bts due to scams and others will get "good" at choosing the right dev's and hit the lottery as they end up being tech innovations and the devshares become worth alot as they get merged in or operate as a sole DAC. As time goes by... the prediction markets will get better and more people will become trusting and good at filtering out those who are bad... bad actors will have to get more creative and good actors will benefit from being able to develop to earn.


Decentralized reputation combined with decentralized identity is a game changer

Both proposals offer this.. and the voting process integrates reputation based on what they have contributed so as a dev it pays to do good work and stick around. As you get vetted you will get funding easier... if you screw up.. funds are burned before any DAC is merged anyways... so no harm to BTS as a whole... but that is the risk you take to "invest" in the bleeding edge.

[luckybit]

Replace the words "Investor" with "Patron".
Replace words stock/shares with "gifts". Gifts can include stocks/shares but aren't limited to that.

Read my thread on the gift economy approach.  All who give earn a reputation and all who take earn a reputation. There are givers and takers. Leechers lose credit for everything they take and givers earn credit for everything they give to a DAC. The DAC could give gifts back to donors, or some other DAC could reward the generosity with gifts to the givers.

https://bitsharestalk.org/index.php?topic=10397

Reputation is only a small part of the developer focus in this proposal yet it seems effective and simple. Can you outline the pros and cons of your idea over this one wrt reputation. Seems thats what you are talking about  an approach that centers around reputation while this one focuses more on the usecases and is easier to understand for me personally. Specifically if you intend to replace this proposal please use the use cases in my post above to show how they would work in your proposal...

The pros and cons to using decentralized reputation

Pro:

1) One of the strengths we have in the DAC is that we can in theory track reputation far better than we can in a centralized model. It's shown that decentralized reputation can exist easily when you have a decentralized ledger for keeping score of everyone's credit ratios. So even something like BitTorrent could use a blockchain to store the credit ratios of seeders by simply having a DAC give credit points to people who seed, who share more, who donate more bandwidth.

This mechanism proven to work in BitTorrent could be implemented in any DAC once we have decentralized reputation and identity. The OP proposal is designed to work in a world where we don't have decentralized reputation and identity so it is not future proof. It's also inviting regulators by using words like "investors" and other corporate language which really is unnecessary to describe what we are doing.

Con:

2) I know it's easier to use corporate language because Bytemaster and others promoted the use of that language but at this point we all know that this language is wrong.  It is not future proof. It may invite regulators to actually begin treating the altcoin industry as an industry of corporate investors. But I do admit that it's a lot easier to explain than to invent an entirely new model based on a gift economy which fewer people will be able to understand.

Decentralized reputation combined with decentralized identity is a game changer

Pro:

1) Once you have decentralized reputation and identity then you can track who gave the most in algorithmic fashion. The DAC would receive "gifts" from patrons who support the idea. These gifts would not be given to any specific human beings but to the DAC itself. The DAC would have an algorithm built into which tracks the reputations of the gift givers which may be individual human beings, other DACs or centralized corporations. It does not really matter as long as the gifts are in a form which the DAC can understand such as a crypto-token.

So under this model you could have a corporation or a government donate a significant amount of money to one of the charitable organizations that the DAC lists as being critical to the development of the DAC. They donate to this by giving it any kind of equity they want using the legal centralized processes to do the donation. This donation then gets turned into BitUSD by the DAC and the organization which gave to the DAC is entered into the ledger as being a giver with an amount of credits which matches the value of whatever they gave. The charitable organization would then develop the DAC but each developer would have a reputation so that the most generous developers are the trusted developers because these developers are known to follow community social norms of reciprocity.

The developers at this point would be able to give gifts to the government organizations, corporations, individuals, or whomever else donated to the charity. These developers would have the right not to give these gifts but because it would damage their reputation if they don't they would be encouraged to maintain their social reputations. So in this way decentralized identity and reputation on the blockchain is all you really need.

Con:

2) The concept of scams will still exist but it will be developers who accept charity and run off with all the money. There will still likely be corruption among the delegates which is possible. The gift economy also requires that you think of all value input to the DAC in generic terms as (resources) and that can be broad.

Resources could include anything from social connections, smart property, to discounts, to bandwidth, to storage space, to stocks, shares, assets, equity, cryptocurrencies, etc.  This means the DAC has to be designed with a smart contract which is smart enough to determine the value of all these different possible resources and then exchange them into the format it can use.

So if someone is donating storage space then the DAC itself would need a way to accept storage space as an input and then later on give it's gifts as shares in itself as an output. Storj can do this for storage space but the idea is you need a DAC which can take any input and then give shares in itself as an output. Bitshares X being a decentralized exchange may someday have this capability but I list it under one of the cons for now because it's not a capability we have today.

Conclusion:

Those are only two pros and cons but there are more. I think overall the pros of doing this way outweigh the cons if you're trying to minimize the risk of legal prosecution. If you're trying to make it easy for the masses to understand then the cons outweigh the pros. It seems to me that making it easy for the masses to understand something can sometimes result in the masses trying to crush innovation because they only understand it on the most superficial level without realizing how much potential it has.

[luckybit]

Replace the words "Investor" with "Patron".
Replace words stock/shares with "gifts". Gifts can include stocks/shares but aren't limited to that.

Read my thread on the gift economy approach.  All who give earn a reputation and all who take earn a reputation. There are givers and takers. Leechers lose credit for everything they take and givers earn credit for everything they give to a DAC. The DAC could give gifts back to donors, or some other DAC could reward the generosity with gifts to the givers.

https://bitsharestalk.org/index.php?topic=10397

Reputation is only a small part of the developer focus in this proposal yet it seems effective and simple. Can you outline the pros and cons of your idea over this one wrt reputation. Seems thats what you are talking about  an approach that centers around reputation while this one focuses more on the usecases and is easier to understand for me personally. Specifically if you intend to replace this proposal please use the use cases in my post above to show how they would work in your proposal...

You said earlier that the SEC and regulators could attack the delegates, disrupt the innovation process, and so on. Above all else I think we have to preserve innovation in this space and if that means dropping the corporate investor model then drop it.

So you cannot use words like investors. You have to call them patrons. You cannot "crowd fund" or do "crowd sales". You can set up charitable organizations, NGO's, and let people donate to them to support development. A DAC can function as a social benefit corporation which would have the benefits of being charity like.

I'm not saying we need inflation or deflation. My suggestions involve removing all promises, all guarantees, and going with a reciprocity model where people who give the most to the DAC receive the most rewards from the DAC.

It doesn't require any "investors", "IPOs", or anything like that. Remove all the corporate language and replace it with more suitable metaphors. Donate to charity to become a "member" of the DAC. After becoming a member then the size of your gift gives you a ratio or an amount of credits. That numerical signal gives you a reputation as a giver and people who know you're a giver are more likely to give to a giver because it improves their reputation.

All of the enforcement functionality could be in the form of smart contracts or hard coded into the DAC. Take a look at BitTorrent ot see how you can trade data around without using the investor model. In BitTorrent the seeder takes on a similar role to the investor only the seeder isn't promised anything in return by anyone. The seeder gets reputation points for seeding and the network can then compensates them with increased access.

So you can use completely algorithmic methods and mechanisms to get people to provide resources to a DAC in ways which don't involve opening doors for the SEC to get involved by simply removing all the investors. A DAC which is supported by volunteers, charitable organizations, NGO's, and gift donations, does not have investors. It instead has benefactors and the top benefactors would have a reputation for their service which would be noted by the DAC itself.

The problem with doing a gift economy in the physical world is we did not have decentralized reputation. We did not have a distributed ledger which could account for every activity of every participant in the community. Now we have the capability to actually know who the givers and takers are in any community, we can know who provided support to the DACs and who just leeches. We can choose to gift to the people who "do the right thing" without any legal obligation.

To improve the ideas presented by the OP, remove investors from it, replace it with supporters. Supporters should become the nobility of the DAC, so you could make the top supporters of the DAC into delegates, or the DAC itself could be designed to give it's top supporters shares in itself, without any human beings treating the supporters as investors.

[jsidhu]

Replace the words "Investor" with "Patron".
Replace words stock/shares with "gifts". Gifts can include stocks/shares but aren't limited to that.

Read my thread on the gift economy approach.  All who give earn a reputation and all who take earn a reputation. There are givers and takers. Leechers lose credit for everything they take and givers earn credit for everything they give to a DAC. The DAC could give gifts back to donors, or some other DAC could reward the generosity with gifts to the givers.

https://bitsharestalk.org/index.php?topic=10397

Reputation is only a small part of the developer focus in this proposal yet it seems effective and simple. Can you outline the pros and cons of your idea over this one wrt reputation. Seems thats what you are talking about  an approach that centers around reputation while this one focuses more on the usecases and is easier to understand for me personally. Specifically if you intend to replace this proposal please use the use cases in my post above to show how they would work in your proposal...

[luckybit]

Replace the words "Investor" with "Patron".
Replace words stock/shares with "gifts". Gifts can include stocks/shares but aren't limited to that.

Read my thread on the gift economy approach.  All who give earn a reputation and all who take earn a reputation. There are givers and takers. Leechers lose credit for everything they take and givers earn credit for everything they give to a DAC. The DAC could give gifts back to donors, or some other DAC could reward the generosity with gifts to the givers.

https://bitsharestalk.org/index.php?topic=10397

[Troglodactyl]

I'd suggest just making the initial proposal more flexible.  The distribution schedule to the developer could be defined in the developer bid, and followed as long as the investors approve of the progress.  If the investors withdraw approval, it freezes or slows until the dev wins them back.

[amencon]

I can see how it would benefit BTS holders through share burn/buyback if we somehow convinced people to do this, but I don't see how the burn is desirable to the actual participants.

The proposal submission and developer bids make sense, but it seems like it would be more efficient to use a decentralized kickstarter model.  You could use the same basic system for proposals and developer bids, but once a bid was submitted a funding period would start for people to commit pledges into escrow.  If it fails to fund, they all get their funds returned, otherwise the development period starts and the funds remain in escrow.  At the end, the investors can vote to either pay the dev the balance, or burn it if they think they've been scammed.

Hmm cool idea.  Though I agree with jsidhu about maybe doing something like release some percentage of the funds to developer with the rest in escrow.  Ideally the amount of funds released would be enough to get the project started but there would be enough escrowed to incentivize the developer to finish the work rather than take what's given and disappear.  Something like 30% released with 70% in escrow?

[jsidhu]

I can see how it would benefit BTS holders through share burn/buyback if we somehow convinced people to do this, but I don't see how the burn is desirable to the actual participants.

The proposal submission and developer bids make sense, but it seems like it would be more efficient to use a decentralized kickstarter model.  You could use the same basic system for proposals and developer bids, but once a bid was submitted a funding period would start for people to commit pledges into escrow.  If it fails to fund, they all get their funds returned, otherwise the development period starts and the funds remain in escrow.  At the end, the investors can vote to either pay the dev the balance, or burn it if they think they've been scammed.

That sucks.. Devs need funds upfront. Also everyone would get the feature and vote to burn at the end. Not sure but not quite as good as op proposal.

The point is that in the OP proposal there is never any reason to burn.  Why would people want to do that?

There could also be an ongoing distribution throughout the dev period as long as investors approved it.  If the dev delivers and investors burn anyway, they've gained almost nothing and probably lost a dev forever.  They just can't be allowed to reclaim their funds after the dev has delivered, since that unbalances the incentives.

Maybe part of the funds are released at onset and other is escrowed per schedule as milestones are reached like op said. Anyways you would burn because if you didnt thats a risk free investment. You also burn devshares once a dac is merged.

You would always burn funds comverted from bts to devshares to keep cap the same.. one minus the other. If it doesnt get voted in to merge or its not profitable then investors see their coins burned. If it
gets merged coins are inflated by the proposal specs and given to investors.

If the devshares were tradeable vs bts then you would have liquid shares and people would be able to sell if they needed funds at a loss and as it gets closer to end of project the price will converge to either 0 or the initial ipo price like an option in a way. So devshares can be treated like options because they are rights to own bts if merged and worthless if not... unless the dac is self sustaining and provides profit then they act as a normal stock with dividends.

Hey Ive just invented options for bitshares lol the theta would be useful because
the longer it takes to finish the project (post deadline) the less likely it is to
complete and thus price of devshares reflect this.

[Troglodactyl]

I can see how it would benefit BTS holders through share burn/buyback if we somehow convinced people to do this, but I don't see how the burn is desirable to the actual participants.

The proposal submission and developer bids make sense, but it seems like it would be more efficient to use a decentralized kickstarter model.  You could use the same basic system for proposals and developer bids, but once a bid was submitted a funding period would start for people to commit pledges into escrow.  If it fails to fund, they all get their funds returned, otherwise the development period starts and the funds remain in escrow.  At the end, the investors can vote to either pay the dev the balance, or burn it if they think they've been scammed.

That sucks.. Devs need funds upfront. Also everyone would get the feature and vote to burn at the end. Not sure but not quite as good as op proposal.

The point is that in the OP proposal there is never any reason to burn.  Why would people want to do that?

There could also be an ongoing distribution throughout the dev period as long as investors approved it.  If the dev delivers and investors burn anyway, they've gained almost nothing and probably lost a dev forever.  They just can't be allowed to reclaim their funds after the dev has delivered, since that unbalances the incentives.

[jsidhu]

a visual diagram of this  Devshares   Dacshares    Dac kickstarter/ incubator proposal would be very helpful.

Perhaps if byte master likes the idea he can tweak it and give us a nice visual diagram.

Sounds good so far.  I'm a little unclear as to how devshares are created and a developer has 100% of his own devshares to exchange for bts to begin developing his Dac.  I guess my question is where are devshares created in the process?   And is bts burned to create it?

Devshares are worthless and a certain qty is created if proposal is voted in. Once funded now the devshares become worth something.

You may not need bts to do anything here until the dac merger process which is a process that is known as part of the original proposal by Bytemaster so he doesnt have to really do anything to change the bts code to support this. You can create a random pub key from a new random private key to send bts to so you may burn funds.. However the supply will not shrink so this isnt the greatest thing but it will do the job.

[jsidhu]

I can see how it would benefit BTS holders through share burn/buyback if we somehow convinced people to do this, but I don't see how the burn is desirable to the actual participants.

The proposal submission and developer bids make sense, but it seems like it would be more efficient to use a decentralized kickstarter model.  You could use the same basic system for proposals and developer bids, but once a bid was submitted a funding period would start for people to commit pledges into escrow.  If it fails to fund, they all get their funds returned, otherwise the development period starts and the funds remain in escrow.  At the end, the investors can vote to either pay the dev the balance, or burn it if they think they've been scammed.

That sucks.. Devs need funds upfront. Also everyone would get the feature and vote to burn at the end. Not sure but not quite as good as op proposal.

[Troglodactyl]

I can see how it would benefit BTS holders through share burn/buyback if we somehow convinced people to do this, but I don't see how the burn is desirable to the actual participants.

The proposal submission and developer bids make sense, but it seems like it would be more efficient to use a decentralized kickstarter model.  You could use the same basic system for proposals and developer bids, but once a bid was submitted a funding period would start for people to commit pledges into escrow.  If it fails to fund, they all get their funds returned, otherwise the development period starts and the funds remain in escrow.  At the end, the investors can vote to either pay the dev the balance, or burn it if they think they've been scammed.

[mbaeichapareiko]

a visual diagram of this  Devshares   Dacshares    Dac kickstarter/ incubator proposal would be very helpful.

Perhaps if byte master likes the idea he can tweak it and give us a nice visual diagram.

Sounds good so far.  I'm a little unclear as to how devshares are created and a developer has 100% of his own devshares to exchange for bts to begin developing his Dac.  I guess my question is where are devshares created in the process?   And is bts burned to create it?

[jsidhu]

Good idea, also it should cost to put forth a proposal because people should really think before creating proposals otherwise you will have a flood of investment ideas to try to get funding... so a large fee should help filter out people not certain they want to go ahead and create a proposal.

There shouldn't be a manual filter in place, because once a proposal is in place it should be either voted in or voted out. Then the fundraising starts.

Seems there are 3 use cases:

1) Voting in an inflationary proposal for marketing or something else... in your examples the inflationary ones were ones the company would create. Can you think of an example of an inflationary proposal that would be simply voted in without creating a dac for it to issue shares? Remember the company is being phased out. So maybe this one will stop after the company is gone.

2) Voting on proposals which create a DAC to issue shares... Once approved and enough funds are raised the DAC issues shares to investors... investors hope it gets merged into BTS as there has to be a clear risk:reward set up here and it should be defined within the proposal (turing complete scripts would help here for when the merging is done and % of inflation is applied for example). If vote doesn't succeed how many kicks at the can will they have to try to get it merged?

3) So in 2, essentially the motivation for investors is that they will vote in and invest in ideas that may be merged into BTS.. the superDAC. But if the DAC stays as a seperate DAC, it needs to be monetized and thus the proposal would define how it is monetized to judge if its profitable, and give back profits to shareholders... Is it possible to have a DAC give profits to shareholders based on operating profits in a trustless way, again maybe turing completeness helps here?

[fluxer555]

The key advantage inflation has, is that you can sell new shares immediately on the market. With DacShares, you will have a much more shallow market for your DacAsset until there is increased demand (if that ever happens).

I've been thinking about this more, and I realize that to fund development, the Developer needs his funds to be liquid (i.e. BTS). For this reason, a Developer can choose to receive a percentage (0% to 100%) of his Developer Stake in BTS instead of DevAsset, taken from what would have been burned. The DevAsset that would have been issued in this percentage via burn is simply not issued. This solves the issue of the developer needing to sell his DevAsset on a potentially illiquid market.

Take this example:

- 1,000,000 BTS are invested in Foo Dac (Let's call the DacAsset 'FooShares').
- 1,000,000 FooShares are to be created/distributed.
- The voted Developer assigned to the project is to receive 5% of FooShares, and 5% of BTS.
- The Developer receives 50,000 FooShares, and 50,000 BTS.
- Since 50,000 BTS were not burned, 50,000 FooShares are also not created
- 900,000 FooShares are distributed to the BTS investors

As you can see, the Developer basically sold 50,000 of his FooShares for BTS at the market price to the rest of the FooShareholders, determined by the number of BTS invested (1 FooShare = 1 BTS).

[GaltReport]

Essentially you would replace the capital infusion with captial diffusion? WHoever wants to invest in ideas can do so to try to gain more than by just holding? Similar to how our economy works today? Brilliant. I like it. With Turing completeness I hope something like this can be done without any manual intervention of funds.

Wouldn't this type of strategy replace what that current proposal is because of the burning BTS part?

As I said, it's not exactly a replacement. I think they're complimentary. Inflation can be used for high-cost lower-risk initiatives that have a high degree of concensus among shareholders, while DacShares can be used for higher-risk, lower-cost, and low consensus Dac add-ons. Some examples:

Viral marketing campaign: Inflation
Associated Press Dac: DacShares
Purchasing a Credit Union: Inflation
Atomic Cross-chain trading: DacShares

The key advantage inflation has, is that you can sell new shares immediately on the market. With DacShares, you will have a much more shallow market for your DacAsset until there is increased demand (if that ever happens).

Another thing to note that successful DacAssets ultimately can lead to inflation as part of the Dac Merger process. However, I am guessing that many DacAssets will not rise above their issuance price, and either will not be merged back into BTS, or will be merged back at a discount.

Very nice.  Genius really!  Great alternative/compliment.  I like this part especially:

"If the DacAsset loses most of its value due to failure, only the DacAsset investors take the hit. This will effectively deflate BTS, and reward those who did not invest."

This is good risk mitigation.

[jsidhu]

Makes sense.. and I think this way there probably would be (hopefully)  more burning than inflating per year.

[fluxer555]

Essentially you would replace the capital infusion with captial diffusion? WHoever wants to invest in ideas can do so to try to gain more than by just holding? Similar to how our economy works today? Brilliant. I like it. With Turing completeness I hope something like this can be done without any manual intervention of funds.

Wouldn't this type of strategy replace what that current proposal is because of the burning BTS part?

As I said, it's not exactly a replacement. I think they're complimentary. Inflation can be used for high-cost lower-risk initiatives that have a high degree of concensus among shareholders, while DacShares can be used for higher-risk, lower-cost, and low consensus Dac add-ons. Some examples:

Viral marketing campaign: Inflation
Associated Press Dac: DacShares
Purchasing a Credit Union: Inflation
Atomic Cross-chain trading: DacShares

The key advantage inflation has, is that you can sell new shares immediately on the market. With DacShares, you will have a much more shallow market for your DacAsset until there is increased demand (if that ever happens).

Another thing to note that successful DacAssets ultimately can lead to inflation as part of the Dac Merger process. However, I am guessing that many DacAssets will not rise above their issuance price, and either will not be merged back into BTS, or will be merged back at a discount.

[jsidhu]

Essentially you would replace the capital infusion with captial diffusion? WHoever wants to invest in ideas can do so to try to gain more than by just holding? Similar to how our economy works today? Brilliant. I like it. With Turing completeness I hope something like this can be done without any manual intervention of funds.

Wouldn't this type of strategy replace what that current proposal is because of the burning BTS part?

[lil_jay890]

Yes... Brilliant Idea!

[fluxer555]

YES

 

[emski]

Looks good. Who will implement it ?

[fluxer555]

The DevShares chain that bytemaster mentioned is related to an idea that has been cooking in my head for some time now. The way I have been thinking about it is a bit different, though. I think it could function as a full DAC, within Bitshares. Basically, its purpose could be for funding and investing in new Dacs within the BTS SuperDac (e.g. BitAssets, VOTE, Play, etc) as well as investing in Dac Developers. This would have more leverage for the investor than simply investing in BTS, and in a way that has DEFLATIONARY effects to BTS if the venture or Developer fails. While this approach may not have as much 'firepower' as inflation, it can be useful for low to medium cost developments without all shareholders bearing the risk of failure. Also, the more BTS is worth, the more viable this strategy becomes for higher-cost developments. I propse this not as a replacement to the inflation model, but as an alternative development route for proposals with lower shareholder approval, which would not even get a chance. The deflationary aspect of this could help compensate for, if not totally reverse, inflationary development.

This could be the more DAC-like, less coin-like, intelligent successor to PTS.

There are probably many possible ways this can be accomplished, but here's a summary of the implementation I have in mind (holes and flaws most likely included; please critique!). Note that bytemaster's idea for 'DevShares' more closely resembles what I call 'DacShares', and what I call 'DevShares' is something completely different.

After reading, I invite you to join me on an experiment.

----------

DacShares and DevShares

I. DacShares

0. New user type: Developer
In addition to Delegates, users can register as Developers, with some sort of identity/credibility verification in place to make sure they are who they say they are. One registered developer may also represent a team of developers. Developer accounts will have special abilities which I will describe.

1. Issue Dac Proposal
Anyone (developer or non-developer) can issue a proposal for a new Dac. The proposal is stored on the blockchain (for Proof of Existence), and should be as detailed and complete as possible. Anyone can modify/fork their proposal and re-issue.

2. Developers apply for assignment
After a developer reads the proposal and decides he would like to work on this Dac, he applies to be assigned through a Developer Proposal. This application includes a bid of how much share of the Dac he needs to develop it (Developer Stake), including all share-claiming terms (lockout, milestones, vesting, etc). Developers can apply for their own proposal, and Developers can apply for another Developer's proposal.

(A 'Developer' can be a software developer or software development team, but doesn't necessarily have to be. Similarly, a 'Dac' doesn't necessarily have to be software. The proposal defines the requirements, and software may or may not be a part of it.)

3. Dac Proposal Voting
BTS holders vote on the proposal. If they like it, they simply vote 'YES', as well as vote for a Developer that submitted an application. Shareholders can optionally omit the Developer vote if they like the proposal but don't think any of the applied Developers are qualified. This may give incentive for more qualified Developers to submit an application. (Maybe voters can also have an optional 'requested developer' cast with their vote, which could show demand for a developer not currently applied. This would not be an actual vote, as they should have to read that developer's proposal prior to voting for him.)

4. Investment Phase
Once Dac Proposal votes achieve 'critical mass' (definition to be determined), it will be enabled as 'Active' status for a set time period. While a Dac Proposal is active, you can:

(Idea A) • Assign a number of your BTS to be investing for stake in this Dac. You can change this number at any time during the set time period (changing too often is discouraged by transaction fees). You can check your current allocation status at any time, however final initial allocation is set at the end of the Investment Phase.

(Idea B) • Send BTS to an investment address, entitling you to shares AGS-style

(Idea C) • Rules of investment distribution are not set in stone by the DacShares DAC, and can be determined by the voters in step 3. (Turing-completeness would help here)

5. Distribute asset
At the end of the Investment Phase, a new DacAsset is created and proportioned per account, also including the Developer's stake. All BTS included in this investment on all accounts are burned. All value transfers from the BTS to the DacAsset, unchanging BTS price and market cap as a direct result of burn/distribution.

6. Trading, development begins
Markets between the DacAsset and BTS open immediately. Developer is given the green light to start work, and his agreed distribution terms for the DacAsset are put into effect.

To retain value within the DacAsset, it is in the favor of the Dac to have all Dac operations be done in terms of the DacAsset. If a new BitAsset implementation were to be proposed, there would be trading pairs between BitUSD and the DacAsset, not BTS.

7. Dac Merger
After the Dac has matured, it will be clear if/when the Dac will add valuation to BTS if operations of the Dac can be done with BTS rather than solely the DacAsset token. Any BTS or DacAsset holder at any time can issue a Dac Merger Proposal, which outlines an distribution model honoring DacAsset holders new BTS in exchange for integrating the Dac functionality with BTS.

Voting for Merger Proposals on both sides (BTS and DacAsset holders) occur, and both need to achieve a 'critical mass' (again, definition to be defined). When this happens, all DacAsset holders are issued their share of BTS, all their DacAsset is burned, and the Dac's functions can now be operated in BTS.

If the DacAsset loses most of its value due to failure, only the DacAsset investors take the hit. This will effectively deflate BTS, and reward those who did not invest.

It is in the best interest for BTS shareholders to respect the DacShares social consensus, without backstabbing each other. If non-DacAsset-holding BTS holders see value in the Dac, collusion to merge the Dac into BTS without honoring the DacAsset holders will undermine the value of BTS itself, as it will discourage further development.

DacAssets also open the possibility for Dacs becoming successful, but remaining within BTS purchasable as a separate asset with no merger. This is perfectly acceptable, as long as it still adds value to the platform as a whole. They could even secede from BTS onto their own chain, however this is unlikely as the investor's voting and capital infusion is with the intention of adding value to BTS. (In other words, nobody is going to vote for or fund a Dac Proposal that imposes an apparent risk to BTS.) A mutually beneficial, segregated Dac within BTS could in fact be the most valuable inclusion model for that Dac's purpose.


II. DevShares

1. Issuance of DevAssets
Registered Developers are automatically issued their own DevAsset, which they by default own 100% of. When a developer is assigned and green-lighted to develop a Dac, the Developer Stake is distributed to owners of this DevAsset, in accordance with the share issuance terms agreed upon. A Developer owning all of his own DevAsset will always receive 100% of the Developer Stake.

2. Sale of Contracts for DevAssets
Developers can sell their DevAssets to any user in exchange for a Contract. The details of the contract can be defined by either party, and can vary in complexity. The simplest Contract would be: Developer sends X amount of DevAsset, buyer sends Y amount of BTS. A more complex contract would involve giving the developer leverage with matching BTS to DacAsset, up to a X number of BTS, in exchange for Y amount of his DevAsset (BTS would be locked up in collateral).

The developer needs to be very careful about the contracts that he agrees to, as a bad contract could destroy his ability to fund the development of any of his Dacs.

----------

Thoughts, Ideas:
• With the inflation development model, the negative effect of a failed Delegate is compounded because there are more shares in circulation for Dac that is worse-off. DacShares makes every situation a win/win for the health of the SuperDAC.

• Incubating new Dacs within BTS makes the Dac very comfy within BTS, while a Dac on a separate chain could be merged into a competing SuperDac with much less friction.

• A 'lazy' investor's best move is still to simply buy and hold BTS, as it is feasible that the majority of DacAssets will fall from their initial valuation. However, a more keen investor (and likely someone who just wants to gamble) has the ability to speculatively enter high-risk/high-reward positions with both DacShares and DevShares. All the while, BTS SuperDAC grows and becomes stronger.

• Maybe DacShares' voting phase and investment phase (I-3, I-4) could be combined into one Kickstarter-like crowdsale. The developer proposes a minimum investment amount and time period, and as long as it is above that amount, DacAssets are issued. If it is lower, everyone involved is sent back their BTS.

• DevShares make the value of Dac developers liquid on-chain. It also means Developers can now be 'Sponsored', which aids in Dac creation, and make their Developer Proposals more attractive.

• For DevShare contracts, locking up BTS in collateral until the Developer Stake is distributed is probably the healthiest for the SuperDAC, as it gives the developer incentive to apply for Dacs, and it enables another high-risk investment option for shareholders to potentially deflate BTS.

----------

I understand this is very complex, and the devs already have their hands tied. I think that the most appropriate thing to do is to pilot the system by using this system to build itself. It would mean that we'd have to do it off chain, of course.

Take this post as a Dac Proposal that I have just issued. If you think it could be improved, fork it and issue your own. If you think this Dac is worth building within BTS, simply post 'YES' anywhere in a reply. If you are a developer and would like to participate in building this Dac, post your Developer Proposal.

Let the experiment commence! Or let it fall flat on its face. Darwinian environments are great, aren't they?