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Offline sparkles

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NeuCoin Inspired Ideas
« on: April 16, 2015, 04:59:49 AM »

The recent posts about NeuCoin and its staking schedule gave me an idea that could help BTS or a BTS competitor. 

NeuCoin is promoting the fact that the company behind it owns 2.5 billion coins that are locked away for 5 years.
NeuCoin is promoting the fact that "staked coins" which are locked up and do not move will dramatically inflate the supply diluting the unstaked coins.

It occurred to me that these are both desirable properties because it encourages people to keep funds in the system and rewards those who hold long term relative to those who hold short term.   The 2.5 billion coins that are locked away for 5 years provide a big incentive for the backing company to make it successful and enables them to raise capital.  These coins are not a threat because most coins are either successful in 5 years or worthless. 

What if a new chain were to share drop 100% on BTS, but only 10% of the share drop was liquid and the other 90% was locked up for 5 years.   Anyone could unlock their remaining 90% for a fee based upon how long they held it.   Suppose you held it for 1 year, you could unlock 20% and pay an 80% fee.   If you held it for 4 years then you could get 80% and pay a 20% fee.   

Under this system no stakeholder would be diluted and the chain would be a 100% share drop.  If everyone held for 5 years then there would be no change in ownership.  Someone looking to cash out early would face less sell pressure (because more people have incentive to hold) and the result would be they would get a better price, but they would be selling a smaller percent of the DAC than if they had waited.   

The question is, should Sparkle (to be launched once BTS hits 1.0) use this approach and would it be considered a 100% share drop?   

The bigger question is what if BTS did the same thing.  At an appointed block issue EVERYONE 9x their current balance in a balance that they can only claim in full if they hold for 5 years.     Those looking to sell BTS after the appointed block would have to ask themselves whether the value of  1% of the new shares today is worth more than 100% of the new shares in 5 years.   2 years from now they would be asking if 40% today is worth more than 100% in 3 years.   Would this be considered an unfair "dilution" or would this be to the benefit of all shareholders who are "long term oriented"?   

In some ways this would be like sucking 90% of the liquidity from existing stakeholders and selling it off at a profit to those who willingly gave up their liquidity. 

I don't think BTS could handle such a change, but I think it is something that new chains may want to consider.

Offline bytemaster

Re: NeuCoin Inspired Ideas
« Reply #1 on: April 16, 2015, 05:14:19 AM »
Sounds like some good ideas for a *new* chain, but I think it may harm BTS holders in the short term because they would face relative SHORT TERM dilution hurting the value of their liquid stake even though the long-term result would be massive burning of stake and massive profits.    In crypto 5 years is forever and anyone wanting to exit would face increased competition in the event of a sell-off.   

As long as the price from sell pressure fell less than than the new stake people were earning by holding then the system would be "flat" in terms of the present value of individual accounts.    Who knows how it would impact the market though.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline fuzzy

Re: NeuCoin Inspired Ideas
« Reply #2 on: April 16, 2015, 05:58:01 AM »
The recent posts about NeuCoin and its staking schedule gave me an idea that could help BTS or a BTS competitor. 

NeuCoin is promoting the fact that the company behind it owns 2.5 billion coins that are locked away for 5 years.
NeuCoin is promoting the fact that "staked coins" which are locked up and do not move will dramatically inflate the supply diluting the unstaked coins.

It occurred to me that these are both desirable properties because it encourages people to keep funds in the system and rewards those who hold long term relative to those who hold short term.   The 2.5 billion coins that are locked away for 5 years provide a big incentive for the backing company to make it successful and enables them to raise capital.  These coins are not a threat because most coins are either successful in 5 years or worthless. 

What if a new chain were to share drop 100% on BTS, but only 10% of the share drop was liquid and the other 90% was locked up for 5 years.   Anyone could unlock their remaining 90% for a fee based upon how long they held it.   Suppose you held it for 1 year, you could unlock 20% and pay an 80% fee.   If you held it for 4 years then you could get 80% and pay a 20% fee.   

Under this system no stakeholder would be diluted and the chain would be a 100% share drop.  If everyone held for 5 years then there would be no change in ownership.  Someone looking to cash out early would face less sell pressure (because more people have incentive to hold) and the result would be they would get a better price, but they would be selling a smaller percent of the DAC than if they had waited.   

The question is, should Sparkle (to be launched once BTS hits 1.0) use this approach and would it be considered a 100% share drop?   

The bigger question is what if BTS did the same thing.  At an appointed block issue EVERYONE 9x their current balance in a balance that they can only claim in full if they hold for 5 years.     Those looking to sell BTS after the appointed block would have to ask themselves whether the value of  1% of the new shares today is worth more than 100% of the new shares in 5 years.   2 years from now they would be asking if 40% today is worth more than 100% in 3 years.   Would this be considered an unfair "dilution" or would this be to the benefit of all shareholders who are "long term oriented"?   

In some ways this would be like sucking 90% of the liquidity from existing stakeholders and selling it off at a profit to those who willingly gave up their liquidity. 

I don't think BTS could handle such a change, but I think it is something that new chains may want to consider.

isn't it a mechanic like this that makes Ripple and Stellar end up having marketcaps FAR exceeding what they should be? 

It makes sense if so--though it gives me the creepy crawlies to think how shady it is to get such a high valuation based on having only a small portion of your shares tradable.

As for the incentive...it is nice, and I think it would probably make most of our community very happy (considering a 100% sharedrop--or some very high %).
« Last Edit: April 16, 2015, 06:04:07 AM by fuzzy »
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Offline joereform

Re: NeuCoin Inspired Ideas
« Reply #3 on: April 16, 2015, 08:13:29 PM »
The merge-related dilution and the  current inflationary aspect of BTS are two things I never signed up for, and it would be best if we returned to making BTS a purely deflationary crypto from this point forward.

Offline bytemaster

Re: NeuCoin Inspired Ideas
« Reply #4 on: April 16, 2015, 08:17:13 PM »
The merge-related dilution and the  current inflationary aspect of BTS are two things I never signed up for, and it would be best if we returned to making BTS a purely deflationary crypto from this point forward.

I generally agree with the desire to make BTS a success without inflation and believe I have found a way.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline nomoreheroes7

Re: NeuCoin Inspired Ideas
« Reply #5 on: April 16, 2015, 08:31:39 PM »
The merge-related dilution and the  current inflationary aspect of BTS are two things I never signed up for, and it would be best if we returned to making BTS a purely deflationary crypto from this point forward.

I generally agree with the desire to make BTS a success without inflation and believe I have found a way.


.......?!?

(Isn't it nice having BM back on the forums everyone?  :D)

Offline lil_jay890

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Re: NeuCoin Inspired Ideas
« Reply #6 on: April 16, 2015, 09:29:10 PM »
The merge-related dilution and the  current inflationary aspect of BTS are two things I never signed up for, and it would be best if we returned to making BTS a purely deflationary crypto from this point forward.

I generally agree with the desire to make BTS a success without inflation and believe I have found a way.



.......?!?

(Isn't it nice having BM back on the forums everyone?  :D)

I'm so happy BM is back on the forums.  It rekindles all the confidence I had late last year in this project.
« Last Edit: April 16, 2015, 10:01:58 PM by lil_jay890 »

Offline jsidhu

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Re: NeuCoin Inspired Ideas
« Reply #7 on: April 16, 2015, 09:46:52 PM »
The merge-related dilution and the  current inflationary aspect of BTS are two things I never signed up for, and it would be best if we returned to making BTS a purely deflationary crypto from this point forward.

I generally agree with the desire to make BTS a success without inflation and believe I have found a way.
+5% but we wont be "hired by the blockchain" anymore?
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Offline bytemaster

Re: NeuCoin Inspired Ideas
« Reply #8 on: April 16, 2015, 10:23:47 PM »
The merge-related dilution and the  current inflationary aspect of BTS are two things I never signed up for, and it would be best if we returned to making BTS a purely deflationary crypto from this point forward.

I generally agree with the desire to make BTS a success without inflation and believe I have found a way.



.......?!?

(Isn't it nice having BM back on the forums everyone?  :D)

I'm so happy BM is back on the forums.  It rekindles all the confidence I had late last year in this project.

I am trying to be more engaging now and moving forward, hopefully without spooking the market. 
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline monsterer

Re: NeuCoin Inspired Ideas
« Reply #9 on: April 17, 2015, 10:25:21 AM »
+5% but we wont be "hired by the blockchain" anymore?

Unless they raise transaction fees high enough to meet 50 BTS per block, on average...

edit: bytemaster, if you're considering making the fees variable, remember there must be a way to know in advance of sending a transaction what the fees will be, otherwise you'll end up with a situation like in bitcoin, where merchants charge a fixed fee at least as large as the largest possible cost.
« Last Edit: April 17, 2015, 11:01:49 AM by monsterer »
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