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Offline FreeTrade

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Distributions from Exchanges
« on: December 29, 2013, 09:20:49 PM »

Seems to me like the exchanges have a poor understanding of the ProtoShares distribution model.

https://twitter.com/cryptsy/statuses/416991129268019200

That's understandable as we haven't provided much information about this, let alone a detailed guide on how to proceed.

My view is that exchanges should regard the distribution as the property of their users and pass it on. However, we have to recognize this comes at a cost to the exchange. This cost may not even be met by the value of the distribution and the exchange may not wish to add the new distribution unit to their exchange.

That said, I think these distributions will become increasingly used so exchanges will need to formulate a policy in dealing with them. For now,  the best thing to do is to hold coins off-exchange, especially at the time of an announced distribution.
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Offline ruletheworld

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Re: Distributions from Exchanges
« Reply #1 on: December 29, 2013, 09:46:02 PM »
Thanks for putting that exchange to light. I realized Cryptsy doesn't seem to know how this works. However, their last support email that I received, after BigVern's reply above, was
"I promise you that we don't want to steal anyone's coins...

I'm talking to Vern about this now, and will let you know the solution. :)
"
(I realize steal was a strong word, but I don't think there was any other way to get their attention!)
Even though exchanges might have to go through an additional step, I think it is only fair that they make the distributions to their users (yes, I agree holding the coins yourself is the best way). Same goes with other PTS exchanges like Bter. I don't see a terrible cost to the exchange, honestly. The procedure should be fairly straightforward. Worst case, they could take a fee of 5% of MMC and give the rest to the users.
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Offline bytemaster

Re: Distributions from Exchanges
« Reply #2 on: December 30, 2013, 12:26:25 AM »
Thanks for putting that exchange to light. I realized Cryptsy doesn't seem to know how this works. However, their last support email that I received, after BigVern's reply above, was
"I promise you that we don't want to steal anyone's coins...

I'm talking to Vern about this now, and will let you know the solution. :)
"
(I realize steal was a strong word, but I don't think there was any other way to get their attention!)
Even though exchanges might have to go through an additional step, I think it is only fair that they make the distributions to their users (yes, I agree holding the coins yourself is the best way). Same goes with other PTS exchanges like Bter. I don't see a terrible cost to the exchange, honestly. The procedure should be fairly straightforward. Worst case, they could take a fee of 5% of MMC and give the rest to the users.

It would require some significant effort on the part of the exchange to track every possible distribution.  Until the value of these distributions becomes quite large I would suggest that the exchange should keep the distributions as part of their standard fee.  When they see people starting to withdraw all of their funds prior to a snapshot they will get the idea that they should do something.
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 ruletheworld

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Re: Distributions from Exchanges
« Reply #3 on: December 30, 2013, 01:37:41 AM »
Thanks for putting that exchange to light. I realized Cryptsy doesn't seem to know how this works. However, their last support email that I received, after BigVern's reply above, was
"I promise you that we don't want to steal anyone's coins...

I'm talking to Vern about this now, and will let you know the solution. :)
"
(I realize steal was a strong word, but I don't think there was any other way to get their attention!)
Even though exchanges might have to go through an additional step, I think it is only fair that they make the distributions to their users (yes, I agree holding the coins yourself is the best way). Same goes with other PTS exchanges like Bter. I don't see a terrible cost to the exchange, honestly. The procedure should be fairly straightforward. Worst case, they could take a fee of 5% of MMC and give the rest to the users.

It would require some significant effort on the part of the exchange to track every possible distribution.  Until the value of these distributions becomes quite large I would suggest that the exchange should keep the distributions as part of their standard fee.  When they see people starting to withdraw all of their funds prior to a snapshot they will get the idea that they should do something.
Why would they do something when they see people withdrawing funds? They get the withdrawal fees from it.
The only way exchanges would "do something" would be when one of the exchanges honors a distribution and another doesn't, in which case the users will move to the one that does.
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Offline bytemaster

Re: Distributions from Exchanges
« Reply #4 on: December 30, 2013, 01:55:25 AM »
Thanks for putting that exchange to light. I realized Cryptsy doesn't seem to know how this works. However, their last support email that I received, after BigVern's reply above, was
"I promise you that we don't want to steal anyone's coins...

I'm talking to Vern about this now, and will let you know the solution. :)
"
(I realize steal was a strong word, but I don't think there was any other way to get their attention!)
Even though exchanges might have to go through an additional step, I think it is only fair that they make the distributions to their users (yes, I agree holding the coins yourself is the best way). Same goes with other PTS exchanges like Bter. I don't see a terrible cost to the exchange, honestly. The procedure should be fairly straightforward. Worst case, they could take a fee of 5% of MMC and give the rest to the users.

It would require some significant effort on the part of the exchange to track every possible distribution.  Until the value of these distributions becomes quite large I would suggest that the exchange should keep the distributions as part of their standard fee.  When they see people starting to withdraw all of their funds prior to a snapshot they will get the idea that they should do something.
Why would they do something when they see people withdrawing funds? They get the withdrawal fees from it.
The only way exchanges would "do something" would be when one of the exchanges honors a distribution and another doesn't, in which case the users will move to the one that does.

Well, they would loose transaction fees from trading while the funds are out of the exchange. 
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 ruletheworld

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Re: Distributions from Exchanges
« Reply #5 on: December 30, 2013, 02:10:16 AM »
Thanks for putting that exchange to light. I realized Cryptsy doesn't seem to know how this works. However, their last support email that I received, after BigVern's reply above, was
"I promise you that we don't want to steal anyone's coins...

I'm talking to Vern about this now, and will let you know the solution. :)
"
(I realize steal was a strong word, but I don't think there was any other way to get their attention!)
Even though exchanges might have to go through an additional step, I think it is only fair that they make the distributions to their users (yes, I agree holding the coins yourself is the best way). Same goes with other PTS exchanges like Bter. I don't see a terrible cost to the exchange, honestly. The procedure should be fairly straightforward. Worst case, they could take a fee of 5% of MMC and give the rest to the users.

It would require some significant effort on the part of the exchange to track every possible distribution.  Until the value of these distributions becomes quite large I would suggest that the exchange should keep the distributions as part of their standard fee.  When they see people starting to withdraw all of their funds prior to a snapshot they will get the idea that they should do something.
Why would they do something when they see people withdrawing funds? They get the withdrawal fees from it.
The only way exchanges would "do something" would be when one of the exchanges honors a distribution and another doesn't, in which case the users will move to the one that does.

Well, they would loose transaction fees from trading while the funds are out of the exchange.
Right, but if I want to sell my PTS, it is not like I have too many options other than to list them back on the exchange. Only, now I had to do an additional withdrawal step, which makes it good for the exchanges because of the fees.
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Offline toast

Re: Distributions from Exchanges
« Reply #6 on: December 30, 2013, 02:15:39 AM »
Who cares? Just another lesson about not holding your coins in an exchange except for when you want to buy/sell. By bytemaster's own reasoning from his bitshares video, we should treat PTS inside cryptsy as "cryptsyPTS" and not real PTS.
Do not use this post as information for making any important decisions. The only agreements I ever make are informal and non-binding. Take the same precautions as when dealing with a compromised account, scammer, sockpuppet, etc.

Offline bytemaster

Re: Distributions from Exchanges
« Reply #7 on: December 30, 2013, 02:18:13 AM »
Who cares? Just another lesson about not holding your coins in an exchange except for when you want to buy/sell. By bytemaster's own reasoning from his bitshares video, we should treat PTS inside cryptsy as "cryptsyPTS" and not real PTS.

The is exactly right.  You send them your PTS and they issue you an IOU PTS.   You are now their creditor.  Unless the IOU contract covers dividends in the form of new coins, they honor their IOU when they repay you PTS. 

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 ruletheworld

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Re: Distributions from Exchanges
« Reply #8 on: December 30, 2013, 03:43:24 AM »
Who cares? Just another lesson about not holding your coins in an exchange except for when you want to buy/sell. By bytemaster's own reasoning from his bitshares video, we should treat PTS inside cryptsy as "cryptsyPTS" and not real PTS.

The is exactly right.  You send them your PTS and they issue you an IOU PTS.   You are now their creditor.  Unless the IOU contract covers dividends in the form of new coins, they honor their IOU when they repay you PTS.
Agreed, but I think that's a very simplistic view of things. Exchanges do provide some benefit in terms of buying and trading, and if you want to buy new PTS, there will always be a lag between the time an order is filled and the time you can withdraw to your wallet. And there is fees.
 
In my case, for example, I usually only withdraw my PTS after I hit 100 PTS to keep the withdrawal fees to a minimum. I don't really care about the <10 MMC that I would have gotten otherwise (in hindsight, the withdrawal fees for me probably wouldn't have covered the MMC owed).

The point however is that we are all treading on new territory in terms of handling crypto-currency IOUs and the way they are designed and handled. Exchanges need to honor that, as a matter of principle, not as a matter of the fine-print while signing up with them.
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Offline zhang8862686

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Re: Distributions from Exchanges
« Reply #9 on: January 07, 2014, 08:56:04 AM »
Distributions from Exchanges???
PkrX7zWBe76uu825XAcN8urVbiMiRV4npo

 

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