The community has a schizophrenic view on BTS as a result of its history. A currency demands very little or no dilution. That's why we had many leave the community when dilution to fund development was introduced. On the other hand, developing a financial platform is a business endeavour that requires a lot of funding in return for profit. That's why CNX has had to establish externally to bitShares, to give the development team other avenues of funding the business. That separation has also upset some of the community. The basic problem is that BTS cannot be both a currency and a development business. In answer to my question on whether bitShares might consider market loans to help fund development (a business need), bytemaster in the Hangout suggested the big problem is aversion to dilution (the currency need). I understand that answer completely.
What I'm suggesting here is a way to potentially meet both needs within the bitShares system. What if we split BTS into separate decentralised currency and business vehicles? It's not fully thought out, and I'm not certain this would be a good idea yet or not - this is just conceptual and posted for feedback.
***Long version***The currency vehicle(s)
The primary purpose of a currency is as a reliable unit of account and store of value. We could feasibly have one or more stand-alone currencies within the system, that could compete directly against Bitcoin or other cryptos. Unlike market pegged currencies, these would stand alone as independent units of account, rather than being pegged to fiat. The core properties would be:
- Negligible dilution to cover only network cost, which is very low under DPoS, a competitive advantage against PoW.
- No participation in platform profits.
- Competitive advantage of using all the speed and capacity benefits of the bitShares platform.
Apart from these core properties, competitive variations could offer a range of different features around interest, stability, and the like, just like the alts market today, but on our platform.The business vehicle
The primary purpose of the business is to earn profit through the development of the financial platform. Such a vehicle would be able to take advantage of various funding methods, and have full flexibility over its capital structure subject to the determination of its stakeholders. Some of these methods will result in dilution, much as company capital raising does in traditional markets, but on the prospect that future growth will more than compensate for these new investments.
So as an example, the business could raise equity or debt funds in currency, and use those for development. The business keeps all the common platform fees (except for privatised structures). There is a wide range of possible fund raising structures (via tokens offering different forms of participation) ranging between full equity and pure debt, such as preferred tokens (first cut of profits), convertibles (only dilute if the equity token price rises above certain levels) etc. Its only limited by imagination.Transition
We'd have to decide whether the currency or business vehicle would be best to retain the BTS label. Then the token for the other vehicle would be 100% sharedropped on existing BTS holders. Other considerations
This is not comprehensive, but some other considerations would be:
- How clear is the business model? To successfully raise funds requires a robust model and profit expectations.
- How clear is the currency model? Does a currency require a profit stream to underpin it or can it exist purely as a unit of account?
- How do we incorporate the possibility of multiple development teams in the future that could each be contributing to the platform in different ways? How are profits divided from common sources?