[ANN] Cryptohedge Financial Services soft launch

[Rune]

+5%

very good idea!
It will certainly help the bitshares project to succeed !

I have already bought some CFSGOLD , but I have to make one question...
Why is the supply 20 CFSGOLD right now and not 10 CFSGOLD? Have you already found a big investor that bought 10 CFSGOLD? Am I missing something?

I had a buyer contact me who was interested in buying 10 bitgold. Since the supply of bitgold already on the books wasn't exhausted I just put up an extra 10 bitgold.

Question: Why do you  need outside money for  this? I assume you've already designed the trading bots. Why not just run them yourselves and take 100% of the earnings instead of giving 70% to CFSGOLD holders? You're not going to need a million dollars to provide liquidity on BTC:bitGOLD.

You're launching with 10-20 CFSGOLD. That's not exactly big money.

Launching with the small amount of BitGold is just to test the funding system. We hope that once BitGold and other assets get started and our hedgebots begin providing a return we can scale CFSGOLD and other CFS assets as reliable, low risk financial products that will appeal to investors outside the bitshares community as well and drive attention and users to bitshares.

Regarding the expected return. I'm actually having a hard time figuring out the best way to model it, because it's impossible for us to predict how much demand there will be for actually trading bitgold on the exchange platforms themselves (rather than buy into bitgold to hold or maybe use it as an on ramp for BTS). Depending on the kind of trading people do we can accomodate it with smaller or larger pools of capital. I'm considering that a better way to offer CFS assets is with a fixed return rather than the current model, because with the current model all CFS asset holders will have their return reduced every time new CFSGOLD is issued.

[Volker]

Question: Why do you  need outside money for  this? I assume you've already designed the trading bots. Why not just run them yourselves and take 100% of the earnings instead of giving 70% to CFSGOLD holders? You're not going to need a million dollars to provide liquidity on BTC:bitGOLD.

You're launching with 10-20 CFSGOLD. That's not exactly big money.

[liondani]

 +5%

very good idea!
It will certainly help the bitshares project to succeed !

I have already bought some CFSGOLD , but I have to make one question...
Why is the supply 20 CFSGOLD right now and not 10 CFSGOLD? Have you already found a big investor that bought 10 CFSGOLD? Am I missing something?

[inarizushi]

Congrats Rune, Riverhead and the other people involved, that's huge, thank you ! And it's a great way to divest inside the BTS ecosystem. It's very exciting again !

[Volker]

Oh, right. You buy your own shorts. And the trading bots are trading bitcoin and bitgold. I definitely read that too fast. So you're exposed to BTS and CFS the company. And your profits are exposed to gold.

[arhag]

Cliffnotes on operations:

The CFS company will make money as it earns up to 1% on the bid:ask spread between bitcoin and CFSGOLD using trading bots on exchanges. 70% of those earnings go back into CFSGOLD, increasing the NAV. So now CFSGOLD might be worth 1.x : 1 with bitGOLD.

At the end of the quarter, the CFS company will offer a full buyback of the CFSGOLD at the 1.x value if you want to cash out.

Note: As you've likely shorted the bitGOLD into existence (due to the lack of available bitGOLD) you have no choice but to expose yourself to BTS.  Your exposure to BTS is double that of CFSGOLD at the beginning. So ultimately you should be bullish on both BTS and gold (and the honesty and competence of CFS).

Do I have that right?

The trading bots trade between bitcoin and BitGold not bitcoin and CFSGOLD.

If you buy your own short you are still only exposed to BTS and not gold. If you exchange your BitGold for CFSGOLD, you are still not exposed to gold at all (assuming you trust CFSGOLD to track the value of BitGold). Actually, that's not completely accurate. Since CFSGOLD's NAV should grow larger than 1, you will be exposed to a little bit of gold as the NAV increases.

[Volker]

So to participate in this you should:

1. Acquire BTS.
2. Use 2/3rds of your BTS to short bitGOLD
3. Use 1/3rd of your BTS to buy your bitGOLD
4. Trade your bitGOLD for CFSGOLD 1:1

Cliffnotes on operations:

The CFS company will make money as it earns up to 1% on the bid:ask spread between bitcoin and CFSGOLD using trading bots on exchanges. 70% of those earnings go back into CFSGOLD, increasing the NAV. So now CFSGOLD might be worth 1.x : 1 with bitGOLD.

At the end of the quarter, the CFS company will offer a full buyback of the CFSGOLD at the 1.x value if you want to cash out.

Note: As you've likely shorted the bitGOLD into existence (due to the lack of available bitGOLD) you have no choice but to expose yourself to BTS.  Your exposure to BTS is double that of CFSGOLD at the beginning. So ultimately you should be bullish on both BTS and gold (and the honesty and competence of CFS).

Do I have that right?

With all that said, do you have any wild estimates of how profitable this might be for CFSGOLD holders? Realistically, how much could CFSGOLD be worth if it attained a trade volume similar to say, nubits?

[Ander]

I got bter.com to start working on bitGOLD market

Awesome!

[toast]

I got bter.com to start working on bitGOLD market

[pseudoscops]

How come the CFSGOLD/bitGOLD market in windows wallet has no graph and no purchase history?

edit: using win 7 client_version": "v0.5.3

I'm wondering this too. Anyone got any ideas?

[toast]

Yunbi is the best bet for bitgold

Sent from my SCH-I535 using Tapatalk

[roadscape]

We're really excited to see so much community support. Almost half of the 10 CFSGOLD has already been sold! Now we just need to get at least one of the BTS supporting exchanges to list bitgold so we can actually start using it.

Have you already contacted BTER regarding bitgold?

[Rune]

Be careful to watch if there are already buy orders at the feed price if you try to short to yourself! If you're unlucky you can have your shorts snatched up immediately buy orders already on the books.

I just put up a short order for 1 bitgold, so if anyone had this happen to them they can buy from my short order and either cover their short, or invest the amount with us (if you want to stay 100% exposed to BTS but still want the CFS sharedrop and small return from CFSGOLD).

[Rune]

Thanks everyone for the support!

We're really excited to see so much community support. Almost half of the 10 CFSGOLD has already been sold! Now we just need to get at least one of the BTS supporting exchanges to list bitgold so we can actually start using it.

Btw some might have noticed I put up another 10 CFSGOLD. This is to accomodate a potential large buyer, and since the CFSGOLD for free sale hasn't run out I decided to just put it directly up there.

There is still a lot of stuff we need to figure out regarding the CFS investor shares (maybe we should call them high risk shares vs CFSGOLD's low risk model). But the fact that at least 10% of them will be sharedropped on CFSGOLD holders won't change.

[cass]

Great idea - good work !  +5%