Author Topic: Percentage based transfer fee [BSIP10] implemented  (Read 29136 times)

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Offline abit

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So just to confirm.  With %-based fees regular users will pay up to the maximum fee for transfers and lifetime members will always pay the minimum fee correct?
Correct. Note that lifetime members still need to pay up to the maximum fee, but the amount above minimum fee will be returned via cash-back.
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Also how will the no-fee/rate-limiting feature effect this proposal?  I assume Smartcoin fee structures remain the same after rate-limiting is implemented.  What is the expectation for fees for bitCNY and bitUSD/bitEUR? 
I think the fee structure would change a bit after that. Anyway it would be decided by the committee (read: stake holders).
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Also does it make sense to have more than one option for % fees that the committee can decide on (ie.  higher fee & lower fee options)?
It's additional feature which requires more development. I'm glad if it make sense to you.
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Offline merivercap

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So just to confirm.  With %-based fees regular users will pay up to the maximum fee for transfers and lifetime members will always pay the minimum fee correct?

Also how will the no-fee/rate-limiting feature effect this proposal?  I assume Smartcoin fee structures remain the same after rate-limiting is implemented.  What is the expectation for fees for bitCNY and bitUSD/bitEUR? 

Also does it make sense to have more than one option for % fees that the committee can decide on (ie.  higher fee & lower fee options)?
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Offline abit

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Added "impacts to 3rd-party applications" section in OP.
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Offline abit

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2016-03-01 Update:
* Code is re-branched to be based on develop branch, operation_ids changed.
* Code is deeply refactored, parameter names of fee schedule changed.
* Links in OP updated.
* Added "API changes" section into OP
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Offline abit

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Update:
2016-02-12 Implemented a new operation, so the committee can change some options of the core asset (BTS), including:
  * percentage market fee / market fee cap
  * transfer fee mode

OP updated accordingly.

If you want this feature, please vote for the worker "1.14.29   [BSIP10] Percentage-based transfer fee solution based on CER". Thanks.
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Offline xeroc

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@abit we really need to talk about the definition of 'robbing' which is the act of taking someone elses goods.
Similar to the settlement 'robbing', the rules for businesses are clear, they can share user base or they require ther own users to be referred by your own faucet (which is just stupid IMHO). People using the service will have to pay the fee no matter what and unless they are ltm, they will pay a higher fee. Period.
This is not whole. People referred by this owner can still use services provided by others, and in this case this owner will get referral income. This is unfair imo.

I don't know whether it's good for the system if every (selfish) business force their users to register a new account. At least we'll hopefully seems to have more registered accounts.

a service provider can actually prevent that and only allow access by users that have the correct registrar in their account details!

Offline merivercap

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I apologize if I've ever been offensive.

By saying "refuse to share", I mean if you apply plan A for your product, which obviously doesn't share anything to referral program.

No problem.   There are a lot of nuances to these fee designs so it probably can lead to misunderstandings of motivations.  The only reason why I advocate Mode A is for the Chinese community.  Who knows it may lead to higher growth there.

We however plan to fully use the referral program in Mode B.  We were planning for a long time to offer 100% of referral income to LTMs & affiliates in the Bitshares network for the first year and probably longer.  It's not for the reasons mentioned above by Coinhoarder, but the number of users is more important to us than the referral income.  As a wallet/registrar we have to pay for operating costs and maintain a good customer experience.  We won't have to offer 100% because we plan to bring a better user experience, but user growth is more important at this stage so we are passing referral income along.  I like the idea of supercharging the referral program.  We'll earn money with our direct referrals, but anyone else can be a referrer in our network and earn 100%.  I think Bitshares should operate the same way and focus on getting a network effect of users. 
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Offline abit

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I apologize if I've ever been offensive.

By saying "refuse to share", I mean if you apply plan A for your product, which obviously doesn't share anything to referral program.
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Offline merivercap

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By selecting mode A means the issuer will get benefit when users referred by other referrers come to use her service, in the meanwhile the referrers will be hurt, unless the issuer white-list her users. This can't satisfy all parties if fee rate not set properly.


What if the issuer of Mode A brings in 1,000,000,000 new users because of low fees and brings new users to pay higher fees for another asset that uses Mode B or C?  The network should take just one low fee to sustain itself for maximum network effect.  Issuers should have flexibility on pricing, not the committee.  The committee should simply determine the network fee.  Any UIA, FBA, Privatized Smartcoin issuer should be able to set fees on top of the network fee.  Technically an issuer can try to add fees outside of the Bitshares system, but it's much more natural to just add that as a standard feature to the system to attract far more businesses to use the platform.
Issuers don't bring in users by their own alone. When they bring in users, they act as registrars or referrers. In this case, the issuer is able to reimburse the users the extra fees paid by users and split to referral program (actually to the issuer in this case), no matter what fee mode she selected for her product.

More important, if the issuer selected a fee mode which doesn't split fees to referral program, OTHER REGISTRARS/REFERRERS would be not willing to bring users FOR THE ISSUER, even worse, they may try to isolate/hurt the issuer's product since it does nothing good to them but probably get benefit from THEIR user bases. Which means the issuer has to fight alone, even against other parties. Which will do no good to the whole system.

Sure you can think of issuers of assets as a mini-platform for various businesses to use.  Bitshares BTS is the broader platform.  Wallet/Exchange/Referral businesses can choose any issuer/asset they want.   If  a wallet or exchange want lower basic fees they can choose an asset with Mode A.  If a wallet or exchange wants to have a referral/membership model they can choose an asset with Mode B or C.

It seems that you are trying to save the issuers from themselves rather than give them a choice?  If an issuer chooses a fee Mode A that has no referral/membership program and many registrars/referrers don't promote them they will have to find other methods to gain users with outside capital, but they will have an advantage of offering lower basic fees.   Why is that a problem especially when a predominant contingent in China want Mode A?

What are your thoughts on Privatized Smartcoins?  My thought is that people will naturally want to promote Public Smartcoins instead of a BitCash Privatized Smartcoin or even TCNY so we who issue Privatized Smartcoins are at a disadvantage. Do you want to save us from ourselves?  Privatized Smartcoins need to find users by improving parameters,  providing liquidity, acquiring different customer segments etc.  The positive is that they aren't forced into using particular parameters or price feeds.  In the same way they shouldn't be forced into a particular fee Mode or fee schedule especially because their business and customer demographic may be different than other businesses.

As I see it, if we have three modes it may look something like this for Smartcoins:
CNY Public Smartcoins:  Mode A  - 1 cent transfers
TCNY Privatized Smartcoins: Mode A - 1 cent transfers
USD /Eur Public Smartcoins: Mode B or C - 1% or 20 cent transfers, 1 cent for members
BitCash Privatized Smartcoins: Mode B or C -  1% or 20 cent transfers, 1 cent for members

Wallets/Registrars/Referral:
OpenLedger
Moonstone
Lime
Bunker
Transwiser
BitCash
Referral Businesses/Blogs/Affiliates

Can you explain to me what will go wrong in this example?  What will businesses be doing to each other rather than focusing on building their own user bases for their business models and target consumer demographic?
What I've seen, and said again and again:

You keep insist that you'll provide services to "your own users", and build your user base somehow.
You don't think "your own users" will use services provided by others, which will benefit you via referral income.
You don't think users who are brought in BitShares by other referrers will use your services, and you refuse to share profit with the referrers when you gain benefit from these users.

In short, I think you're trying to rob other referrers.

If you still don't understand, sorry, I think I'm unable to reach you.

1.  You think I'm trying to rob other referrers when I'm trying to utilize the same referral program as everyone else?  First off that's offensive.  Secondly, it's illogical.  What do you mean refuse to share profits?  The referral program is by definition sharing profits.

2.  The referral income goes to any registrar/referrer that brings in users for assets that use Mode B or C.   It can be any business that set's up a registrar.  You can do it.  Anyone can do it.  Otherwise you can use Openledger or any other registrar and just be a referrer.  Furthermore someone who brings in a user for an asset that uses Mode A benefits the entire network.  Someone who brings a new user for an asset that uses Mode B or C benefits the system.  Businesses that bring the most users to the system provide arguably the most benefit.  If I had a popular blogging business and wanted to earn referrals I'd write about a particular asset or application that I thought was valuable and partner with any of the registrars.  Would the blog be somehow 'robbing' other asset issuers by bringing new users to a particular application/asset just because these new users might use other applications in the future?  If you are building an application or FBA on Bitshares there will and should be an extra fee to use the service anyways.  The Bitshares platform benefits the most from the network effect.  It sets the network fees and can raise them anytime in the future.   

3.  The Chinese community seems to want lower basic fees so providing a Mode A seems to me a good idea.
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Offline CoinHoarder

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Alright, school work done! I decided that I don't have the time or will to enact this evil plan. Also, someone can kill the "lucrative" part of it, so here goes nothing...

How to Monopolize the Referral Business:
Bob wants to monopolize the referral business because he likes making money. He sets up a business that works like the rakeback business in poker [1]. Anyone that signs up under him, he gives X% of the fees back to them that he earns. It costs him very little to set this up. It mostly just costs him the time it takes to program an automated solution. Bob makes it known that if anyone competes with him, he will burn the referral business to the ground by coming over the top of whatever percentage of rakeback they offer until 100%. There is then no incentive to compete with Bob using the same business model, because if you do he will come over the top of your offer- all the way to a 100% rakeback offering. Assuming everyone acts in their own self-interest, they would register for an account with Bob as their referrer because they will save a lot of BTS on the fees. Monopolizing the referral business would not work if someone was motivated enough to kill the referral business outright (see below.)

How to Kill Referral Businesses:
Charlie wants the referral business to die because he thinks the inflated fees are bad for the future of Bitshares. He sets up a business that works like the rakeback business in poker [1]. Anyone that signs up under him, he gives 100% of the fees back to them that he earns. It costs him very little to set this up. It mostly just costs him the time it takes to program an automated solution. Assuming everyone acts in their own self-interest, they would register for an account with Charlie as their referrer because they will save a lot of BTS on the fees. No one can compete with 100% rakeback, and all referral businesses that rely on the referral program for profit would die off.

[1] https://en.wikipedia.org/wiki/Rake_(poker)#Rakeback
« Last Edit: January 31, 2016, 10:36:41 pm by CoinHoarder »
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Offline Pheonike

Its called competition.  As long as everyone knows the rules at beginning, its up them to make their product more appealing to users. If lower transfer fees are the most important thing to your user, then the will use yours. You want to lock ppl into your product. Make the best product for them. You will never have all the users. Once you understand that then it becomes clear.

Offline Akado

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What's the problem? Every business is free to do as they want. In the end they must follow the protocol. Everyone starts from the same place, everyone has a chance. It's up to each business to decide what they think it's best for them.

If they want to make users register accounts to use their specific services, why not?


Let's not come up with problems where they don't exist please.
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Offline abit

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@abit we really need to talk about the definition of 'robbing' which is the act of taking someone elses goods.
Similar to the settlement 'robbing', the rules for businesses are clear, they can share user base or they require ther own users to be referred by your own faucet (which is just stupid IMHO). People using the service will have to pay the fee no matter what and unless they are ltm, they will pay a higher fee. Period.
This is not whole. People referred by this owner can still use services provided by others, and in this case this owner will get referral income. This is unfair imo.

I don't know whether it's good for the system if every (selfish) business force their users to register a new account. At least we'll hopefully seems to have more registered accounts.
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Offline xeroc

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@abit we really need to talk about the definition of 'robbing' which is the act of taking someone elses goods.
Similar to the settlement 'robbing', the rules for businesses are clear, they can share user base or they require ther own users to be referred by your own faucet (which is just stupid IMHO). People using the service will have to pay the fee no matter what and unless they are ltm, they will pay a higher fee. Period.

Offline abit

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By selecting mode A means the issuer will get benefit when users referred by other referrers come to use her service, in the meanwhile the referrers will be hurt, unless the issuer white-list her users. This can't satisfy all parties if fee rate not set properly.


What if the issuer of Mode A brings in 1,000,000,000 new users because of low fees and brings new users to pay higher fees for another asset that uses Mode B or C?  The network should take just one low fee to sustain itself for maximum network effect.  Issuers should have flexibility on pricing, not the committee.  The committee should simply determine the network fee.  Any UIA, FBA, Privatized Smartcoin issuer should be able to set fees on top of the network fee.  Technically an issuer can try to add fees outside of the Bitshares system, but it's much more natural to just add that as a standard feature to the system to attract far more businesses to use the platform.
Issuers don't bring in users by their own alone. When they bring in users, they act as registrars or referrers. In this case, the issuer is able to reimburse the users the extra fees paid by users and split to referral program (actually to the issuer in this case), no matter what fee mode she selected for her product.

More important, if the issuer selected a fee mode which doesn't split fees to referral program, OTHER REGISTRARS/REFERRERS would be not willing to bring users FOR THE ISSUER, even worse, they may try to isolate/hurt the issuer's product since it does nothing good to them but probably get benefit from THEIR user bases. Which means the issuer has to fight alone, even against other parties. Which will do no good to the whole system.

Sure you can think of issuers of assets as a mini-platform for various businesses to use.  Bitshares BTS is the broader platform.  Wallet/Exchange/Referral businesses can choose any issuer/asset they want.   If  a wallet or exchange want lower basic fees they can choose an asset with Mode A.  If a wallet or exchange wants to have a referral/membership model they can choose an asset with Mode B or C.

It seems that you are trying to save the issuers from themselves rather than give them a choice?  If an issuer chooses a fee Mode A that has no referral/membership program and many registrars/referrers don't promote them they will have to find other methods to gain users with outside capital, but they will have an advantage of offering lower basic fees.   Why is that a problem especially when a predominant contingent in China want Mode A?

What are your thoughts on Privatized Smartcoins?  My thought is that people will naturally want to promote Public Smartcoins instead of a BitCash Privatized Smartcoin or even TCNY so we who issue Privatized Smartcoins are at a disadvantage. Do you want to save us from ourselves?  Privatized Smartcoins need to find users by improving parameters,  providing liquidity, acquiring different customer segments etc.  The positive is that they aren't forced into using particular parameters or price feeds.  In the same way they shouldn't be forced into a particular fee Mode or fee schedule especially because their business and customer demographic may be different than other businesses.

As I see it, if we have three modes it may look something like this for Smartcoins:
CNY Public Smartcoins:  Mode A  - 1 cent transfers
TCNY Privatized Smartcoins: Mode A - 1 cent transfers
USD /Eur Public Smartcoins: Mode B or C - 1% or 20 cent transfers, 1 cent for members
BitCash Privatized Smartcoins: Mode B or C -  1% or 20 cent transfers, 1 cent for members

Wallets/Registrars/Referral:
OpenLedger
Moonstone
Lime
Bunker
Transwiser
BitCash
Referral Businesses/Blogs/Affiliates

Can you explain to me what will go wrong in this example?  What will businesses be doing to each other rather than focusing on building their own user bases for their business models and target consumer demographic?
What I've seen, and said again and again:

You keep insist that you'll provide services to "your own users", and build your user base somehow.
You don't think "your own users" will use services provided by others, which will benefit you via referral income.
You don't think users who are brought in BitShares by other referrers will use your services, and you refuse to share profit with the referrers when you gain benefit from these users.

In short, I think you're trying to rob other referrers.

If you still don't understand, sorry, I think I'm unable to reach you.
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