Privatizing BitAssets

[jcrubino]

Markets exist because it is possible to arbitrate information asymmetry between players. without information asymmetry there cannot be arbitration. Communities which are able to keep information siloed off from the rest of the market can profit from that (e.g. Singapore elite), but open communities cannot. So far DACs can not keep secrets, hence no information asymmetry - no profit beyond technical utility value.

For any DAC to become a real company you need a board of directors which keeps information asymmetry up. I personally lean heavily towards using prediction markets for appointing a board of directors for DACs.

However, if you want the shareholders to decide on everything, then information asymmetry is practically impossible.

I am concerned that allowing for privatized assets you are lessening information asymetry between the Bitshares community and other blockchains with similar goals, who to date are not doing as well in a relative comparison by trade volume.  Some here feel wary of Bitshares current performance but when compared to other similar platforms it is doing just fine on the markets.  Other blockchains and the current UIA list look like exchanges for spam in comparison.

[Bitcoinfan]

IMO allow a new pegged asset to be created which can earn transaction fees / trade fees for its creator, but still require that 51 delegates agree to list it before it becomes active.

That way all these new feeds are essentially voted in by the community, and the best ones still stand a chance to earn some revenue for their creators via collected fees.

Its an idea worth considering.  I'm more favorable to having a high fixed cost (eg. $1000) and a yearly rent of (eg.$500) to unlock the feed feature in a bitasset.  This "Skin in the Game" by the yearly rent will ensure that only serious players get involved and to flush out those who are unsuccessful and cannot pay rent.  Just like your idea, (albeit its a market guardian vs delegate gatekeeper) I think these costs are necessary for preventing dilution via fragmented index markets.  Instead we will have a better outcome of more focused and purposefully branded UIA's. 

Think of it like registering to be a public offering today.  You have upfront costs filing for an IPO.  And once you have IPO, there are yearly regulatory and maintenance upkeep like 10k, 8k reporting, etc.  These stringent standards will benefit the traders and consumers.   

[Stan]

As for people complaining about Bitshares not behaving like a company, what do you expect? We don't view Bitshares as a DA-Company, but as a DA-Community.

I guess being new to Bitshares I got confused with the DAC metaphor in the publicity material.  "Corporation" is most often used to signify a business that acts as one unit.  Most business's internal market is for talent and operations focused groups that helps the business achieve it goals.  Other than that, privatized assets sounds like a fine plan.

Communities and companies are the same thing.  The best ones understand its just a group of people getting together to solve what they think is a fundamental problem in society.  At the end of the day each one can be viewed with the same lens.  Is Singapore herself a Corporation, Country or a Community?  Now the better question, was Singapore better served by understanding it should be run as a Corporation rather than a sovereign nation?   

I think the Bitshares community should have a better discussion how to enable privatized bitassets without diluting  or even outcompeting what is its core offering-- Bitusd.  You guys need to offer more ideas.  Stop passively accepting what consensus is saying (or Bytemaster).  This proposal even though it offers an answer, the answer itself should lead to many better questions.  Should it require a very very high initial fixed cost?  A yearly rental fee (I actually like this idea)?  Delegate only sponsorship?  What other ways can help reduce spam?

Markets exist because it is possible to arbitrate information asymmetry between players. without information asymmetry there cannot be arbitration. Communities which are able to keep information siloed off from the rest of the market can profit from that (e.g. Singapore elite), but open communities cannot. So far DACs can not keep secrets, hence no information asymmetry - no profit beyond technical utility value.

For any DAC to become a real company you need a board of directors which keeps information asymmetry up. I personally lean heavily towards using prediction markets for appointing a board of directors for DACs.

However, if you want the shareholders to decide on everything, then information asymmetry is practically impossible.

Ah!  So that's why my first company never took off!  My internationally franchised lemonade stands offering profoundly empathetic psychiatric help just didn't have enough information asymmetry!

I always thought it was about location, location, location...

[bitsapphire]

As for people complaining about Bitshares not behaving like a company, what do you expect? We don't view Bitshares as a DA-Company, but as a DA-Community.

I guess being new to Bitshares I got confused with the DAC metaphor in the publicity material.  "Corporation" is most often used to signify a business that acts as one unit.  Most business's internal market is for talent and operations focused groups that helps the business achieve it goals.  Other than that, privatized assets sounds like a fine plan.

Communities and companies are the same thing.  The best ones understand its just a group of people getting together to solve what they think is a fundamental problem in society.  At the end of the day each one can be viewed with the same lens.  Is Singapore herself a Corporation, Country or a Community?  Now the better question, was Singapore better served by understanding it should be run as a Corporation rather than a sovereign nation?   

I think the Bitshares community should have a better discussion how to enable privatized bitassets without diluting  or even outcompeting what is its core offering-- Bitusd.  You guys need to offer more ideas.  Stop passively accepting what consensus is saying (or Bytemaster).  This proposal even though it offers an answer, the answer itself should lead to many better questions.  Should it require a very very high initial fixed cost?  A yearly rental fee (I actually like this idea)?  Delegate only sponsorship?  What other ways can help reduce spam?

Markets exist because it is possible to arbitrate information asymmetry between players. without information asymmetry there cannot be arbitration. Communities which are able to keep information siloed off from the rest of the market can profit from that (e.g. Singapore elite), but open communities cannot. So far DACs can not keep secrets, hence no information asymmetry - no profit beyond technical utility value.

For any DAC to become a real company you need a board of directors which keeps information asymmetry up. I personally lean heavily towards using prediction markets for appointing a board of directors for DACs.

However, if you want the shareholders to decide on everything, then information asymmetry is practically impossible.

[monsterer]

IMO allow a new pegged asset to be created which can earn transaction fees / trade fees for its creator, but still require that 51 delegates agree to list it before it becomes active.

That way all these new feeds are essentially voted in by the community, and the best ones still stand a chance to earn some revenue for their creators via collected fees.

[Bitcoinfan]

As for people complaining about Bitshares not behaving like a company, what do you expect? We don't view Bitshares as a DA-Company, but as a DA-Community.

I guess being new to Bitshares I got confused with the DAC metaphor in the publicity material.  "Corporation" is most often used to signify a business that acts as one unit.  Most business's internal market is for talent and operations focused groups that helps the business achieve it goals.  Other than that, privatized assets sounds like a fine plan.

Communities and companies are the same thing.  The best ones understand its just a group of people getting together to solve what they think is a fundamental problem in society.  At the end of the day each one can be viewed with the same lens.  Is Singapore herself a Corporation, Country or a Community?  Now the better question, was Singapore better served by understanding it should be run as a Corporation rather than a sovereign nation?   

I think the Bitshares community should have a better discussion how to enable privatized bitassets without diluting  or even outcompeting what is its core offering-- Bitusd.  You guys need to offer more ideas.  Stop passively accepting what consensus is saying (or Bytemaster).  This proposal even though it offers an answer, the answer itself should lead to many better questions.  Should it require a very very high initial fixed cost?  A yearly rental fee (I actually like this idea)?  Delegate only sponsorship?  What other ways can help reduce spam? 

[Bitcoinfan]

However, the privatized bitAsset idea could circumvent that issue to some extend. I am looking more at this as bitUSD with private fee profits and legally compliant whitelisting. It's a middleground between gateway IOUs and true bitUSD. The more I think about it the more it seems that privatized bitAssets with whitelisting capability + gatways for stocks and bonds + synthetic order books should be V1.0.

As for people complaining about Bitshares not behaving like a company, what do you expect? We don't view Bitshares as a DA-Company, but as a DA-Community. Companies are islands of strict non-competition in markets. Think about it, if we are so much pro-market, why are companies command-and-controle structures without any internal markets? It's simple: For a social organization to be a company it needs to leverage information asymmetry, which it then bridges in the open market for profit. DACs don;t have information asymmetry, hence they cannot be companies. At most, they can be community/private utilities.

How would this work?  You have a problem when a established player does decide to offering a transparent feed and their own private bitusd.  Anybody can come in and undercut them leech their feed and offering another private bitusd w/o whitelisting.  What can any system like this get off the ground?

[jcrubino]

As for people complaining about Bitshares not behaving like a company, what do you expect? We don't view Bitshares as a DA-Company, but as a DA-Community.

I guess being new to Bitshares I got confused with the DAC metaphor in the publicity material.  "Corporation" is most often used to signify a business that acts as one unit.  Most business's internal market is for talent and operations focused groups that helps the business achieve it goals.  Other than that, privatized assets sounds like a fine plan.

[sittingduck]

Great post about dac being a community and not a company. 


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[bitsapphire]

Wouldnt we just be passing the potato.
It would be extremely expensive for a private party to market the bitAsset product.
And the profits they make from the trading fees would not justify the expenses (exactly what you said before).

The only way I see this working is if an established player in the financial services space offers the bitAsset as another service and leverages their user base.

But how many large established players are leveraging crypto?

Now you are catching on... the way we bootstrap is to give established players a profit incentive to bring us customers

After talking to several companies which could offer Bitshares gateway services for fiat I've come to the conclusion that the regulatory requirement and the counterparty risk of becoming a fiat gateway are still too big for most startups.

However, the privatized bitAsset idea could circumvent that issue to some extend. I am looking more at this as bitUSD with private fee profits and legally compliant whitelisting. It's a middleground between gateway IOUs and true bitUSD. The more I think about it the more it seems that privatized bitAssets with whitelisting capability + gatways for stocks and bonds + synthetic order books should be V1.0.

As for people complaining about Bitshares not behaving like a company, what do you expect? We don't view Bitshares as a DA-Company, but as a DA-Community. Companies are islands of strict non-competition in markets. Think about it, if we are so much pro-market, why are companies command-and-controle structures without any internal markets? It's simple: For a social organization to be a company it needs to leverage information asymmetry, which it then bridges in the open market for profit. DACs don;t have information asymmetry, hence they cannot be companies. At most, they can be community/private utilities.

[MrJeans]

Wouldnt we just be passing the potato.
It would be extremely expensive for a private party to market the bitAsset product.
And the profits they make from the trading fees would not justify the expenses (exactly what you said before).

The only way I see this working is if an established player in the financial services space offers the bitAsset as another service and leverages their user base.

But how many large established players are leveraging crypto?

Now you are catching on... the way we bootstrap is to give established players a profit incentive to bring us customers

Bytemaster agreed with a thought process I had 

*me feeling chuffed


I still think the price feeds should be decentralized among delegates (many would offer price feeds voluntarily or for a small fee to maintain a certain level of 'our magic word').

[bytemaster]

Wouldnt we just be passing the potato.
It would be extremely expensive for a private party to market the bitAsset product.
And the profits they make from the trading fees would not justify the expenses (exactly what you said before).

The only way I see this working is if an established player in the financial services space offers the bitAsset as another service and leverages their user base.

But how many large established players are leveraging crypto?

Now you are catching on... the way we bootstrap is to give established players a profit incentive to bring us customers

[MrJeans]

Wouldnt we just be passing the potato.
It would be extremely expensive for a private party to market the bitAsset product.
And the profits they make from the trading fees would not justify the expenses (exactly what you said before).

The only way I see this working is if an established player in the financial services space offers the bitAsset as another service and leverages their user base.

But how many large established players are leveraging crypto?

[starspirit]

I agree that voting for feed producers that get paid each time they publish a feed with a minimal interval between feed publishings would incentivize things nicely and keep them separate from delegate responsibilities.

Where would the additional budget come from to pay these feed producers?
Why are stakeholders as a group in the best position to be able to vote effectively on a large group of feed producers?
Might it be better for stakeholders to vote a small trusted group of price feed arbiters into the existing delegate system, and let them use their delegate budgets to manage the reward to a pool of price feed submitters based on their results? ie. Outsource.

[oldman]

I agree that voting for feed producers that get paid each time they publish a feed with a minimal interval between feed publishings would incentivize things nicely and keep them separate from delegate responsibilities.

This is a great idea.