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Offline oldman

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We are going have a run at creating a P2P Lending DAC based on the Bitshares platform - let's call it Bitshares Lending for now.

I am a serial entrepreneur and crypto/fiat investor. We are building a team and have programming/coding gurus on-board.

We wish to solicit Community input on the proposed social contract and receive feedback on the business model:


The Social Contract:

Total of 4,000,000 LND shares distributed as follows:

25% PTS

25% AGS

40% Market

10% Dev


The Business Model:

Revenue will be generated per BTS; LND will be destroyed continuously as transaction fees between borrower/lender.

100% of revenue will be paid to shareholders via monthly distributions.

The distribution mechanism will be a monthly split.

Shareholders will receive dividends in LND on the first of every month; the total number of shares will reset to 4MM on the first of every month.

Loans can be secured with any bitAsset.

No minimum collateral requirements/LTV ratios; completely free market lending.

Credit rating and reputation will be tied to Keyhotee ID.


This is the simplest and most robust model I can contrive - no middlemen/loan officers/arbitrators/ID verification etc.

Input from the Community on any aspect of our proposal is both welcome and wanted. Please, give us your opinion!

Also, any advice from Invictus or other devs on nuts and bolts and how-tos of building a DAC would be greatly appreciated.

Not sure how we make this official, but this is where it starts.







Offline toast

Re: Bitshares LND - P2P Lending - Social Contract & Business Model
« Reply #1 on: April 01, 2014, 04:34:29 PM »
Awesome!

I am a serial entrepreneur and crypto/fiat investor. We are building a team and have programming/coding gurus on-board.

Can you say more?

Quote
40% Market
Does this mean marketing?

Quote
Loans can be secured with any bitAsset.

Does this mean you will have an embedded BTS X exchange, or that you will do something clever with cross-chain?

Quote
Also, any advice from Invictus or other devs on nuts and bolts and how-tos of building a DAC would be greatly appreciated.

We can talk on skype, I can help you through everything except designing your trust/credit/rep system
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 oldman

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Re: Bitshares LND - P2P Lending - Social Contract & Business Model
« Reply #2 on: April 01, 2014, 06:45:29 PM »
Awesome!

I am a serial entrepreneur and crypto/fiat investor. We are building a team and have programming/coding gurus on-board.

Can you say more?


I have built and operated three (non-tech) businesses and been following/investing in the crypto space for two years.

My partner is knowledgeable in several programming languages. We are both working as technical professionals in the engineering field.

Once we get our heads around the platform/scope of work we will grow as required. We have access to hoards undergrad/graduate comp/sci comp/eng if needed.

Quote
40% Market
Does this mean marketing?


This is the open market allocation for the general public, and yes, we are vetting a novel distribution mechanism that does double duty as a marketing campaign.

Rather than tying up this value in a relatively small community of miners we would like to use the allocation to reach a wider audience and accelerate adoption.

Increased adoption = increased shareholder value.

The distribution mechanism is essentially a referral network that is administered by the DAC; creation of a loan earns the referrer XX LND.

We have noted that immature P2P lending communities have a proliferation of small 'reputation building' loans.

Autonomous marketing agents convince new borrowers to engage with the Lending DAC.

The new borrowers create a Keyhotee ID and begin building a reputation/credit score; they do so by taking out small loans.

When the first loan is made, the referrer receives LND.

This should provide both push (referral agents) and pull (new borrowers building a credit rating/reputation) to build momentum/adoption quickly.

Make this lucrative enough and a viral army of autonomous marketers will emerge.

Once all of the public LND allocation has been 'mined' the Lending community should be mature enough to hit critical mass.

There will of course be abuse and we will need to find a way to make gaming the system unattractive/inefficient.

We could certainly earmark some/all for traditional PoW mining, however, we are committed to maximizing shareholder value and mining is perhaps not the best means of doing so.

Quote
Loans can be secured with any bitAsset.

Does this mean you will have an embedded BTS X exchange, or that you will do something clever with cross-chain?


Cross-chain collateralization is absolutely beautiful:

- Borrower puts up assets on any chain as collateral (imagine being able to earn interest on your loan collateral, ie. use BTS as collateral for trading margin)

- If LTV ratio is breached/borrower defaults/payment is missed etc. the loan is called and the Lending DAC transfers assets to the creditor

- A penalty is assessed from the debtor's assets and is split between the creditor and shareholders

We could definitely use input on how this is best accomplished... borrowers would not want to grant the Lending DAC unrestricted access to all of their assets, assuming the collateral requirements < total assets.

Perhaps a separate 'collateral wallet' in Keyhotee would be the simplest solution.

Collateral is put into the wallet, continues to earn interest etc. but is accessible to the DAC if the loan is called.

Quote
Also, any advice from Invictus or other devs on nuts and bolts and how-tos of building a DAC would be greatly appreciated.

We can talk on skype, I can help you through everything except designing your trust/credit/rep system


That would be greatly appreciated! We will take you up on it, but need some time to be well enough informed not to waste your time.

Also looking forward to further feedback from the community to see if there are any major course corrections before we start into the nuts and bolts of it...

« Last Edit: April 03, 2014, 07:13:24 AM by OldMan »

Offline oco101

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Re: Bitshares LND - P2P Lending - Social Contract & Business Model
« Reply #3 on: April 02, 2014, 12:20:10 PM »
+1 I like it !!! I could see that working !!

Offline bytemaster

Re: Bitshares LND - P2P Lending - Social Contract & Business Model
« Reply #4 on: April 03, 2014, 02:31:01 AM »
We are going have a run at creating a P2P Lending DAC based on the Bitshares platform - let's call it Bitshares Lending for now.

I am a serial entrepreneur and crypto/fiat investor. We are building a team and have programming/coding gurus on-board.

We wish to solicit Community input on the proposed social contract and receive feedback on the business model:


The Social Contract:

Total of 4,000,000 LND shares distributed as follows:

25% PTS

25% AGS

40% Market

10% Dev


The Business Model:

Revenue will be generated per BTS; LND will be destroyed continuously as transaction fees between borrower/lender.

100% of revenue will be paid to shareholders via monthly distributions.

The distribution mechanism will be a monthly split.

Shareholders will receive dividends in LND on the first of every month; the total number of shares will reset to 4MM on the first of every month.

Loans can be secured with any bitAsset.

No minimum collateral requirements/LTV ratios; completely free market lending.

Credit rating and reputation will be tied to Keyhotee ID.


This is the simplest and most robust model I can contrive - no middlemen/loan officers/arbitrators/ID verification etc.

Input from the Community on any aspect of our proposal is both welcome and wanted. Please, give us your opinion!

Also, any advice from Invictus or other devs on nuts and bolts and how-tos of building a DAC would be greatly appreciated.

Not sure how we make this official, but this is where it starts.

So is this a way to borrow USD with BitUSD as collateral?   
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 Troglodactyl

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Re: Bitshares LND - P2P Lending - Social Contract & Business Model
« Reply #5 on: April 03, 2014, 03:04:56 AM »
Great! Looking forward to seeing this progress.


Shareholders will receive dividends in LND on the first of every month; the total number of shares will reset to 4MM on the first of every month.


Just my opinion, but this seems a bit messy.  Wouldn't it be easier and eliminate the rounding issues to just do a doubling bitshift on all balances on any new block in which the total supply would otherwise drop below a minimum?

Offline oldman

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Re: Bitshares LND - P2P Lending - Social Contract & Business Model
« Reply #6 on: April 03, 2014, 03:50:44 AM »
So is this a way to borrow USD with BitUSD as collateral?   

The DAC could enable BitAssets to act as collateral for the lending of RealAssets.

Conveyance of the RealAsset would be a problem:

I loan you USD -> you put bitUSD up as collateral -> I wire you the USD -> You say USD not received -> ?

Without a trustless conveyance mechanism for RealAssets this feature would require a third party or escrow service.

Perhaps this would be feasible once an Escrow DAC is available?

« Last Edit: April 03, 2014, 07:02:00 AM by OldMan »

Offline oldman

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Re: Bitshares LND - P2P Lending - Social Contract & Business Model
« Reply #7 on: April 03, 2014, 04:08:52 AM »
Just my opinion, but this seems a bit messy.  Wouldn't it be easier and eliminate the rounding issues to just do a doubling bitshift on all balances on any new block in which the total supply would otherwise drop below a minimum?

The monthly reset is neither elegant nor efficient.

However, regular 'deposits' to shareholder accounts provides a familiar mechanism for value distribution.

An investment that produces dependable monthly income is highly desirable to investors.

In short, messy but intentionally so.

 
« Last Edit: April 03, 2014, 06:58:14 AM by OldMan »

Offline oldman

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Re: Bitshares LND - P2P Lending - Social Contract & Business Model
« Reply #8 on: April 04, 2014, 02:33:52 AM »
On loan notes:

P2P loans will not be made fungible and ownership of the loan will remain with the original lender until discharged.

The Lending DAC will be a lean platform:

1. Credit scoring

2. Loan discovery

3. Collateral transfer

Pure P2P lending, no additives.

 
« Last Edit: April 04, 2014, 02:39:36 AM by OldMan »

Offline bytemaster

Re: Bitshares LND - P2P Lending - Social Contract & Business Model
« Reply #9 on: April 04, 2014, 04:36:08 AM »
How does this compare to Ripple for extending credit?
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 etherbroker

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Re: Bitshares LND - P2P Lending - Social Contract & Business Model
« Reply #10 on: April 04, 2014, 05:21:03 AM »
So you don't really need an escrow, because if you default on your loan it will damage your reputation in the community.

What is to prevent someone from building up a lot of trust over the course of years, and then, just stealing lots of money?  I suppose the amounts could never be high enough to make scheme worthwhile?


Offline oldman

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Re: Bitshares LND - P2P Lending - Social Contract & Business Model
« Reply #12 on: April 07, 2014, 04:31:37 AM »
How does this compare to Ripple for extending credit?

If DAC = Gateway and LND = XRP there are structural similarities.

The Ripple protocol is slick (too slick?) and may be helpful in designing the DAC back-end.

Will be given due consideration.


« Last Edit: April 07, 2014, 04:57:38 AM by OldMan »

Offline oldman

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Re: Bitshares LND - P2P Lending - Social Contract & Business Model
« Reply #13 on: April 07, 2014, 04:55:32 AM »
So you don't really need an escrow, because if you default on your loan it will damage your reputation in the community.

What is to prevent someone from building up a lot of trust over the course of years, and then, just stealing lots of money?  I suppose the amounts could never be high enough to make scheme worthwhile?

Nothing; this type of fraud is endemic among immature P2P lending communities.

There are mature P2P lending communities that manage reputation fraud through identity verification, self-insuring and loan structuring: Lending Club, Lending Tree, Zopa etc.

Crypto P2P is trying to emulate the fiat P2P systems with mixed success: BTCJam, BitBond, BitLendingClub (ha!).

P2P lending requires both escrow and reputation to function efficiently.


« Last Edit: April 07, 2014, 04:57:11 AM by OldMan »

Offline oldman

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Re: Bitshares LND - P2P Lending - Social Contract & Business Model
« Reply #14 on: April 07, 2014, 05:06:01 AM »
Sounds good! I'm sure you can make it work.

Jump into it and build it in the air! :)

More like chasing BitX down the runway...


 

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