Author Topic: Bitshares LND - P2P Lending - Social Contract & Business Model  (Read 5685 times)

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Offline oco101

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+1 I like it !!! I could see that working !!

Offline oldman

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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.

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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.

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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.

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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 toast

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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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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.