Riverhead is working hard at finishing up the hedgebot system that will allow us to offer the super tight spreads for bitUSD and bitGOLD on bter that traders crave. We're also going to have talks with elmato of Bitwallet and Monsterer and Shentist of Metaexchange about how to create a large amount of liquidity for the bitwallet once it releases (we want to have really high limits so you can send or receive up to 25 BTC as bitUSD or bitGOLD at a 0.5-1% fee)
Up until now we have been hedging all our bitcoin exposure using bitfinex leveraged trades. However if we want to really be able to offer the lowest spreads we will need to borrow our BTC directly from the community. We will do this in the form of a new CFS asset, CFSBTC. The idea is that CFSBTC will eventually function as an interest paying gateway asset, however at first it will just reside on the bitshares blockchain as a normal CFS asset like CFSGOLD, and will have a limited sale directly to early funders, manually by private message.
Here's the benefits of holding CFSBTC:Steady returns from the market making of our HedgeBots:
Since we fully hedge all exposure to other assets every time someone buys or sells into our market making walls on bter we are a guaranteed a small return on the difference in the spreads from where we sell (bter) and where we hedge (huobi). This results in a slow but steady income stream that is almost risk free (except in the event of an exchange default). 70% of the gross income from this goes directly to CFSBTC and results in an increased NAV. At issuance, each CFSBTC will be sold for 1 BTC each, but over time they will be bought back at higher and higher amounts as the BTC increase from our market making operations. At first while we are still at low volume this will income and NAV increase will be close to zero, but over time as we get more volume and more markets the return will increase.continuos buy back/withdraw at any time:
For every CFS asset there will always be systems in place to do instant withdrawal of all the funds they have deposited with us at the NAV. If there is large demand within a short period of time there can sometimes be up to 24 hours of waiting as we transfer money from the bots in order to pay back funders.Early funder perk 150000 CFSCOIN sharedrop to CFSBTC holders:
The biggest reason to buy into CFSBTC at this point (in addition to helping bitshares with bitasset liquidity) is the CFSCOIN sharedrop that all early funders get. This sharedrop is compensation for the fact that CFS assets are temporarily more risky than they will be in their final state (when they are insured by the value of CFSCOIN against exchange default risk). We will be releasing a lot more news regarding CFSCOIN and why it will soon become a really desirable investment as it takes on a life on its own as a DAC-coin that lives on the bitshares blockchain and gains 30% of all income earned by all CFS assets.
If you would like to become a funder of CFSBTC in our limited release sale then please send me a PM and you will get a bitcoin address where you can send you investment to, and will receive your CFSBTC at a price of 1:1. There is a minimum limit of 1 BTC to buy in. You will be able to withdraw your BTC again by exchanging your CFSBTC at any time at at least a price of 1:1, and possibly higher if NAV has increased (at first this this will also have to be done manually). At first there will be no fee on deposit and withdrawal, however once CFSBTC becomes a gateway asset that gets issued by a gateway there will be a deposit fee of 0.1%, and the income of this deposit fee will also go towards the NAV of the asset.
Also a short update on CFSGOLD. We're using all the bitgold we collected so far to either make sell and (hedged) buy walls on bter https://bter.com/trade/BITGLD_BTC
or do continous buybacks at the CFSGOLD:bitGOLD market on the bitshares exchange (you can go there and withdraw your bitGOLD at any time). Volume has been quite low so far, but we have still made some income since we're still trading at a large spread, and might be able to do our first NAV increase soon. We're considering declaring a NAV increase and moving the buy and sell orders every time NAV increases by 0.1% rather than at specified points in time.
on CFSCOIN sharedrop. There will be a lot more news about CFSCOIN soon, along with a bitcointalk announcement thread and the new cryptohedge.io website. We are still considering when the best time to do the CFSCOIN sharedrop will be. The most important thing is that once the sharedrop is done we need to be sure that the CFS assets are "insured", (i.e. they can ensure all CFS assets stay at their current NAV if one of the centralized exchanges we operate on defaults). This means we will likely do the sharedrop some time after we've seen bitasset volume pick up, and have launched our buy&burn bot, which is the mechanism we will use to increase the price of CFSCOIN from 30% of the income of the HedgeBots so that CFSCOIN has a healthy, liquid market.
Have any questions about Cryptohedge, CFSBTC, CFSGOLD, CFSCOIN? please let me know and I'll answer.