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Offline toast


I think this would really help people understand how to make long-term valuations for BTS. We pursue things that help us burn BTS so that we can eventually start getting paid for owning stake in a profitable autonomous system.

The mechanics of the dividend are not important except that it should be in bitUSD or bitGOLD.
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Offline Ander

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So let me try to understand how this would work:

The system would save up burned BTS instead of burning it.

Then it would use that BTS as collateral to short bitUSD into existence. 

Then it would distribute the bitUSD to everyone in a share drop.



But how would it cover the short later?  Would this end up leaving extra bitUSD floating around that had no corresponding short?
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Offline arhag

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I don't understand how this complication helps people value BTS. Like any other company stock, the value in the growth phase should be coming from capital gains not dividends. I think the current system of burning the BTS is great.

But if you are planning on putting in all the code effort to convert BTS into BitUSD to pay out dividends, then I would love to see that used not for dividends but for delegate pay. The tricky part is that the software would have to somehow slowly buy up the BitUSD in the BTS/BitUSD market without affecting the price too much in a potentially illiquid market. So perhaps the DAC tries to buy BitUSD using its pool of collected BTS at a targeted average steady rate using a limit order where the price limit is some percentage above the one-hour price feed.

Offline GaltReport

Great concept.  Great to market that.  I have no clue about the economics of it.

Offline Riverhead

So perhaps the DAC tries to buy BitUSD using its pool of collected BTS at a targeted average steady rate using a limit order where the price limit is some percentage above the one-hour price feed.

I think this is the way to go for this proposal. The idea of the DAC shorting seems needlessly complicated. However, the system can always use more purchasers of bitUSD.

Actually I thought fees were already being paid this way as interest but I guess that's only for asset transactions not BTS transactions (voting, asset creation, sending shares, etc).

Offline toast

So let me try to understand how this would work:

The system would save up burned BTS instead of burning it.

Then it would use that BTS as collateral to short bitUSD into existence. 

Then it would distribute the bitUSD to everyone in a share drop.



But how would it cover the short later?  Would this end up leaving extra bitUSD floating around that had no corresponding short?

No, you buy USD, or just give the BTS directly.

I don't understand how this complication helps people value BTS. Like any other company stock, the value in the growth phase should be coming from capital gains not dividends. I think the current system of burning the BTS is great.

But if you are planning on putting in all the code effort to convert BTS into BitUSD to pay out dividends, then I would love to see that used not for dividends but for delegate pay. The tricky part is that the software would have to somehow slowly buy up the BitUSD in the BTS/BitUSD market without affecting the price too much in a potentially illiquid market. So perhaps the DAC tries to buy BitUSD using its pool of collected BTS at a targeted average steady rate using a limit order where the price limit is some percentage above the one-hour price feed.

We wouldn't be adding the code to actually do it yet because it won't happen yet.
It helps people understand it has value because you can say "it pays dividends" instead of "it's economically equivalent to an asset that pays dividends"
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julian1

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No-one is going to have confidence in the mechanics of the bitshares system if it can be constantly tinkered with.

Crypto markets and non-crypto investors know exactly what 'deflationary' means when applied to the base currency. There's simply no need to extract that value as a dividend in an alternate bit currency.

Dividend payments in bitUSD would be appropriate for holders of user assets, where there was 'real-world' activity that created profit. In this case, payment could be performed by scanning the chain, determining period of asset holding and dropping value against the address.

zerosum

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Why not kill several birds with one stone?

1.First do not wait for 2 Bil, start now when we are at  3.7Bill.

2.Every new block has 50 additional BTS found on the blockchain. Some of them will be destroyed if less than 101 delegates with 100% pay. I do not know if all of those should be used for dividend or just say 50% (the one that are burned are effectively (and can be thought as) a stock buy back, which is also beneficial for the DAC), so lets go with 50% for now.

3.So up to 25 BTS + plus some transaction fees are available for dividends. Use those to buy bitUSD (the exact formula when and how to buy those can have a lot of variables) but for simplicity lets say general buy at the peg (or below it if some bitUSD are available below it), and  not more than 15% of all available for sell.

4.Each dividend day (monthly or quarterly) send those bitUSD to all BTS accounts proportional to the amount held.

Should be mentioned that those dividends seem to not to bee to excessive - about 3.24% at 2.5Bill supply (2.20% on 3.7 Bill).


So we have achieved:
- deflationary system ( to the likings of a lot of people)/ company that is buying back its shares contently; and we have got rid of the inflation complains/concerns;
-That pays actual dividends (and not achieving dividend like returns);
-In the process we have added (arguably) additional demand for bitAssets.

julian1

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The more complex and opaque the market mechanisms embedded in the public blockchain are, the less value it has for creating certainty and transparency about the risks and rewards that parties take on when they enter transactions.

After the inflation fork, and the marketing fork, what Bitshares desperately needs to gain adoption is a sense of stability. The world needs to absorb the implications of the market peg, before even more complexity is introduced into the system.



Offline abit

It's inflates more this way.. Or say, deflates slower.
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Offline starspirit

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When it comes to supporting valuation of BTS, the more important discussion is what the sources of income are and will be, rather than the form in which that value is distributed.

Offline Empirical1.1

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I suppose the problem is you still have the issue that if BitShares gains mainstream adoption from consumers who don't care much about the blockchain on the backend, that we become largely expendable & obsolete. So we risk being diluted down by larger stakes unless BitShares commits to and markets itself to mainstream as having a fixed/defined supply long term. It's far more marketable & that way minority shareholders and early adopters gain greater protection long term.

Offline cygnify

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Where can I read about why the supply is changing?

Offline Troglodactyl

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This seems like unnecessary complexity to me, honestly.  Anyone who wants to hold BTS should be able to figure out what burning fees means for them.  If you just want to use it for payments and savings without that minimal level of understanding, you should be using bitAssets and just getting interest instead anyway.

Supply issues I don't think will really be relevant for the foreseeable future, but I'd support doing a split and doubling all BTS balances on the chain any time the total supply drops under a billion.  :P

Offline joele

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+5%

If market capital below 2B
    Exchange all fees to bitUSD or bitGOLD
    Distribute as dividend to BTS holders
else
    Burn all fees

 

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