Smartcoins yield: Yay / Nay ?

[mf-tzo]

I think you guys may want to review this from 1 month ago..

https://steemit.com/bitshares/@mf-tzo/proposal-to-reward-bitassets-holders-with-interest

I really don't get it why no one is making a proposal for voting something like what I have described.. I have supported an interest in the form of open.xxx asset but this could be as well in the form of bts..

With $40k from the reserve pool you can reward an annual 10% interest to current bitasset holders..The benefits from that are huge the negatives very insignificant.And yet no one is making a worker proposal for this..unbelievable..

[R]

The 5% interest on anything was a major selling point for BTSX (Hell, it has an emoji here! +5%). I would love to be able to set interest on UIA/MPA.

I would as well, as I wrote in the steemit post.

What do you think of the argument I outlined as to why perhaps that is not a good idea?

I think providing yield for smartcoins would increase interest in holding them for the long term, in the BTSX system the trading fees were used to cover yield and now this is given to the witnesses, right? What about reverting to that old system but 50:50 witnesses/holders - so that witnesses don't entirely lose out on fees.

I think yield on UIA, or potentially new functionality to set 'x%' interest on an UIA (issuing new UIA tokens & sending to UIA holders) without involving the UIA issuer for each interest payment would be really cool.

[Chris4210]

Reading most of the comments, I also agree with Karnal conclusion.

Most BitAsset currencies are for value protection and interest free.

BitAssets holder can decide to invest their funds into Marketmaker Funds, or other investment vehicles to earn an interest.

Sure it would be nice to earn 10% out of nothing but the 10%+(profit) need to be earned from someone, somewhere. We could think more about a Steem model of super inflation which still has to prove itself. Or we think about proven investment instruments who generate profits.

[EstefanTT]

The problem right now is the lack of shorters.
If we would offer unlimited amount of fiat MPA, we would get some antention.

I think the fiat MPA market core value is to propose stable cryptocurrencies.

Even if we can give 5%, Steem back dollar will still look much better. Hence, it wouldn't make a big difference.

Sent from my SM-G900F using Tapatalk

[yvv]

What do you think of the argument laid out, that holding bitUSD is comparable to holding physical cash, and should therefore offer no yield, much like holding physical gold?

It is true that holding crypto assets is more comparable to holding physical cash than it is comparable to holding "virtual cash" (e. g. in a bank account).
But IMO that's largely irrelevant to the discussion.

Interest payments are an incentive to holders. The questions are - who wants to incentivize holders, and why, and how much are they willing to pay for it?

You can incentivize either holders or borrowers (shortes) by positive/negative interest. In case of positive interest, borrowers would pay to holders. In case of negative interest, holders would pay to borrowers. Both approaches may have their use cases.

[pc]

What do you think of the argument laid out, that holding bitUSD is comparable to holding physical cash, and should therefore offer no yield, much like holding physical gold?

It is true that holding crypto assets is more comparable to holding physical cash than it is comparable to holding "virtual cash" (e. g. in a bank account).
But IMO that's largely irrelevant to the discussion.

Interest payments are an incentive to holders. The questions are - who wants to incentivize holders, and why, and how much are they willing to pay for it?

[karnal]

Rather, the main question was .. does it even make sense to have yield (for smartcoins), in terms of sound economics.

You cannot ascertain if the economics is sound if you only look at one side of the equation.

That's like politicians promising to reduce taxes without explaining how they plan to pay for the state's expenses.

What do you think of the argument laid out, that holding bitUSD is comparable to holding physical cash, and should therefore offer no yield, much like holding physical gold?

[pc]

Rather, the main question was .. does it even make sense to have yield (for smartcoins), in terms of sound economics.

You cannot ascertain if the economics is sound if you only look at one side of the equation.

That's like politicians promising to reduce taxes without explaining how they plan to pay for the state's expenses.

[yvv]

Being able to set positive/negative yield (aka interest/demurrage) to bitshares assets is not a bad idea. In case of smartcoins, tweaking the yield could affect the amount of coins in circulation. Positive yield would increase the balance of holders and debt of shorters by same amount, increasing the amount of coins in circulation and demand for new coins. Negative yield would decrease shorter's debt and holder's balance, destroying coins, and motivate to short them.

How many people do you know who would park thousands of bitUSD in Bitshares, fully well knowing that due to influences outside of their control, they could use 1, 3, +5%, even more of their value?

At least to me, that would be more than enough deterrent to not even touch it.

Well, people use to pay fees for keeping money in bank accounts. It all depends on what do they get in return.

[karnal]

tl;dr?

I seem to have missed the part where you explain where the yield comes from.

Naturally, because I never explained it :P

Presumably from trading fees, worker proposals, and so on, but it wasn't something that I really wanted to get in on the post.

Rather, the main question was .. does it even make sense to have yield (for smartcoins), in terms of sound economics.

And while I wouldn't mind if my bitUSD magically grew for essentially doing nothing, it does seem unsound: other than using Bitshares, I'm taking pretty close to zero risk (black swan) holding the funds there - the same way holding a dollar bill doesn't give you any interest.

And we are hailing this sort of technologies as digital cash, right?

[karnal]

Being able to set positive/negative yield (aka interest/demurrage) to bitshares assets is not a bad idea. In case of smartcoins, tweaking the yield could affect the amount of coins in circulation. Positive yield would increase the balance of holders and debt of shorters by same amount, increasing the amount of coins in circulation and demand for new coins. Negative yield would decrease shorter's debt and holder's balance, destroying coins, and motivate to short them.

How many people do you know who would park thousands of bitUSD in Bitshares, fully well knowing that due to influences outside of their control, they could use 1, 3, +5%, even more of their value?

At least to me, that would be more than enough deterrent to not even touch it.

[yvv]

Being able to set positive/negative yield (aka interest/demurrage) to bitshares assets is not a bad idea. In case of smartcoins, tweaking the yield could affect the amount of coins in circulation. Positive yield would increase the balance of holders and debt of shorters by same amount, increasing the amount of coins in circulation and demand for new coins. Negative yield would decrease shorter's debt and holder's balance, destroying coins, and motivate to short them.

[pc]

tl;dr?

I seem to have missed the part where you explain where the yield comes from.

[karnal]

The 5% interest on anything was a major selling point for BTSX (Hell, it has an emoji here! +5%). I would love to be able to set interest on UIA/MPA.

I would as well, as I wrote in the steemit post.

What do you think of the argument I outlined as to why perhaps that is not a good idea?

[R]

The 5% interest on anything was a major selling point for BTSX (Hell, it has an emoji here! +5%). I would love to be able to set interest on UIA/MPA.

[karnal]

Lately I have been thinking about whether Smartcoins should return to .. returning yield for hodling or not.

Wrote a little something over at steemit, http://steem.link/OlG2g

I still think the forum is a better place to discuss any such topics longterm, hence this post.

Hoping it will generate discussion both here and on steemit. Very interested in your opinion!