Author Topic: ICOs and the most liquid way into and out of the Bitshares Ecosystem  (Read 503 times)

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Offline santaclause102

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I agree most of the ICOs are way overpriced but nobody is forcing anyone to buy in and everyone should do their own due dilligence.

I think it would be better for the ICO to be done in OPEN.BTC for 2 reasons.
1.) ronny makes more money on OPEN.BTC trades (0.2%)
2.) BTC is a well understood liquid market

But at the end of the day its up to ronny to do whatever he likes.

We can't blame free market traders for BTS price not going up.
The argument wasn't that it is a moral problem. Rather I hoped to stimulate a discussion that may help to align incentives. Surely no one is to blame, but the Bitshares product should be constructed in a way that doesn't allow a situation where it's users harm the product.   

You can ask a simple question: Will more people carry BTS to external exchanges where the bts:btc price is made in order to sell them in case of an overpriced ICO? The following conditions have to be met for the answer to be Yes:
- Those who sell their ICO.token for BTS have to be overall more wiling to sell for BTS or fiat than those who bought the ICO.token with their BTS. 
- The most liquid/cheapest option to get out of the BTS ecosystem is to sell BTS for BTC on an external exchange no matter whether the ICO is initially sold for Open.BTC on the DEX.

On the other side if the ICO token is underpriced after the ICO and the most liquid/cheapest way to buy the ICO token is to acquire BTS on an external exchange in order to then buy the ICO token on the DEX, it creates BTS buy pressure.   

I haven't seen any flaw pointed out in this argument. I 'm looking forward to be proven wrong.

Encouraging Ronny to do ICOs with price discovery (no set market cap) would only be an intermediate cure since anyone could offer ICO / IUA tokens with a set high market cap - so also he isn't to blame, he should do whatever is best for his business.
The solution is relatively simple in general - assuming the issue of overpriced ICOs: The most liquid way out of the BTS ecosystem should not involve BTS, instead it should be Open.USD:USD or Open.BTC:BTC or BitUSD:USD and so on. In the long run when BTS is a mature exchange with liquidity that can compete with centralized exchanges, this may be more likely.
A side chain would be a solution too so that it would be possible to trade directly ICO.token:BTC. Another, more likely, solution would be if the Open.BTC:BTC or the Open.USD:BTC markets on external exchanges would be more liquid than BTS:BTC. The latter case would profit from an incentive to keep BTS of external exchanges - I'm not up to date on the options here.