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Offline tonyk

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Liquid AGS shares (LAGS fund)
« on: May 18, 2014, 08:16:19 PM »



I'm not  saying Invictus is doomed to fail, hell I've bought AGS every day this week including today.  I'm saying that I do not have the choice of whether or not to withdraw my investment ...
That's different.



 
« Last Edit: May 19, 2014, 02:45:28 AM by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline tonyk

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Re: Liquid AGS shares (LAGS fund)
« Reply #1 on: May 18, 2014, 08:16:35 PM »
One of the main drawbacks for a lot of AGS supporters is the inability to get out of this investment. And while many people think and (hope) AGS  will be made liquid one day (soon, sometime…) the reality is that in most likelihood it will never happen. I myself will be more than happy to be proven wrong on that, but trust me the chances are slim to none.

I have been working on an idea to give such investors (myself included) the liquidity we desire.
Let be clear from the beginning – the AGS will remain transferable. This will be another product:
- that is on top of the AGS
- will try to as closely as possible match the benefits of investing in AGS
- will be tradable – it will have market determined price and every moment one can enter or exit from its investment as she chooses.

I have worked on some implementation details but they are not the important part right now (I think). So I will put out the general idea here for everyone to contribute. EVERYTHING is open to debate and change:

- The LAGS will be a fund,  or joint investment group if you like, that will have 25,000 shares.  Each share will be targeting to represent 1+ AGS share. (50 days in the open-end period x 500 new shares per day).

- The LAGS fund will issue its shares on NXT AE. Every effort will be made the fund’s shares to be move to  Bithsares ME when the platform is available (if such move is feasible and economically  beneficial) – NXT AE is the best place that I know as of now – (I am open for suggestion to move it to whatever place is best, if better alternatives exist)

-Daily ‘new’ shares sales: The target is every day (of the open-end period i.e. 50 days) at predetermined time (say 2 pm eastern time) all existing buy orders for price >=  0.8 of the highest  bid (highest buy offer), and not exceeding the daily max new shares (initially 500, adjusting depending on the demand every day) are fulfilled by ‘new’ shares of the fund.

-Daily shares buybacks: The target is every day, except the first and the last (of the open-end period i.e. 50 days, excluding day 1 and day 50) at predetermined time (say 4 pm eastern time) all existing sell orders are bought back. The fund will start with adding 30% of the day’s new shares sales to the buy-back fund. The amount will be adjusted based on the volume of sell-backs.

-Initially 75% of the money received from that day’s new shares sells will be invested in AGS. Simple rule will be used for the amounts invested in a form of PTS and BTC respectively. (The current model calculates the average BTC and PTS invested in the last N days, and uses this ratio together with the PTS/BTC price to determine the more favorable  offset from 50% BTC / 50 % PTS)

- The fund will certain percentage of the new shares sales revenue for expenses and fixed management fee (currubtly 2.5% for expenses and 2.5 management fee are considered)

-After ( and during) the open-end period all shares will be tradable at prices determined by the market.

-Whenever shares from new DACs are distributed to AGS holders, the LAGS fund automatically distributes the shares received to LAGS shareholders.





Benefits:
Liquidity one AGS investments!

Risks and Drawbacks:
-The biggest risk of course is ‘whether the fund is going to fulfill its obligation/promises, or you gonna end up losing all invested in it’. That is off course the biggest issue of every one offering something on platform like NXT AE, Bitshares Me or any similar venue.
- It is obviously more efficient to invest in AGS directly (no fund expenses) but then again the projected price seem very reasonable for the benefit to have your investment in AGS liquid.


Fire up: What you like, dislike, any suggestion etc. are welcomed.(also what amount you would – as it will help me greatly in determining the size of such LAGS fund)

Feel free to give me a tip to the address below, to use in staring the LAGS  fund. (Just drop me a PM to know if you did as well as if you want/do not want public acknowledgement)
« Last Edit: May 18, 2014, 10:22:52 PM by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline tonyk

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Re: Liquid AGS shares (LAGS fund)
« Reply #2 on: May 18, 2014, 09:51:57 PM »
Am my own echo chamber (much like AdamBLevine)???
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline gamey

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Re: Liquid AGS shares (LAGS fund)
« Reply #3 on: May 18, 2014, 10:08:37 PM »
I just posted a message where I asked about an AGS coin that didn't directly receive dividends.  I guess that is what you are proposing here ?

So you would be selling shares to be invested into AGS.  While these shares become liquid, the underlying AGS does not ?

So the AGS key would be controlled by a single entity (you?) ?

That is a lot of centralization for the ability to be liquid.  I like ideas like this though.  Ideas spawn other ideas. :)
« Last Edit: May 18, 2014, 10:10:27 PM by gamey »
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Offline tonyk

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Re: Liquid AGS shares (LAGS fund)
« Reply #4 on: May 18, 2014, 10:18:03 PM »
Correct.
 (see Risks and Drawbacks)

Additionally we can brainstorm on including other members of the community (which kind of reduces the risk, but does not eliminate it.)
« Last Edit: May 18, 2014, 10:22:29 PM by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline gamey

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Re: Liquid AGS shares (LAGS fund)
« Reply #5 on: May 18, 2014, 11:20:21 PM »
Well.. the following are just my thoughts off the top of my head..

I suppose you could have multiple keys controlled by mulitple people.  You increase odds someone will be scammed, but you make it a lot less likely that someone would lose all their investment.

Having AGS split across multiple private keys really increases the complexity of the task + workload... (Unless you write software to automate it .. then ignore talk of spreadsheets)

So say you come up with 5 people on here who post often and are clearly passionate about Bitshares (trustees).  You, (Tony) are in charge and issue the asset on AE.  You provide a spreadsheet of all the purchasing of AGS.  (including transfering of NXT -> PTS -> AGS).  Actually you would need to transfer the PTS to each of the trustees.  Then each trustee  uses their wallet to purchase AGS.

I would suggest with 5 people, 1 person is given all the PTS to purchase with on one day, then the next person on the next day.  BTC might be preferable, but I think the better deal is with PTS. So that trustee buys the AGS on that one day.  (Also, if you do it this way, I believe there will be no change addresses, so it can be easy for others to track)

So then in 60 days you'll have all the AGS purchased amongst the trustees each in control of a portion close to 1/5th. (if you have 5 trustees)

You need to have a policy how each trustee is supposed to keep track of their PTS key.  Cold storage/offline obviously.  Preferably printed out too.

2.5% is not likely to be enough to really make it worth your time.  I think this would be more something you do because you are passionate about the tech, as I doubt you'll see enough volume for 2.5% to make much difference.  I would approach it as more of an experiment.

I am not sure what you would do with unpurchased shares.  Does NXT have a proof of burn address ?

Actually once the assets are issued, I suppose you could write software to distribute AGS profits directly.  I believe NXT is working on a way to pay out shares.  So maybe the bookkeeping would not be that involved.

I'm skipping out all the buyback rules etc you mentioned.. but it does seem workable if someone is willing to commit to writing the distribution software that goes from Bitshares DAC profits -> NXT asset exchange profits.
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Offline tonyk

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Re: Liquid AGS shares (LAGS fund)
« Reply #6 on: May 18, 2014, 11:45:15 PM »
Thanks! Great start of the discussion!

‘I am not sure what you would do with unpurchased shares.  Does NXT have a proof of burn address ?’
This is one of the things that I do not hove solution to. One workable (I think) solution is sending to all remaining shares to the shareholders proportionally to their stake.

‘I'm skipping out all the buyback rules’
Should not be a major issue as they concern/involve  accounting transaction only( # of LAGS shares and the underlying currency (NXT in this case))
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline jae208

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Re: Liquid AGS shares (LAGS fund)
« Reply #7 on: May 18, 2014, 11:48:38 PM »
Liquidity is what Bitshares-PTS is for...

Those that donated to the fund knew or should have known that AGS wasn't going to be liquid.
AGS funds is the equivalent to funds on kickstarter. The difference here is that we get equity unlike on kickstarter. I'm sure the people that donated money to the Oculus Rift team would have liked some equity especially now that Facebook bought Oculus Rift for $2 billion.
http://bitsharestutorials.com A work in progress
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Offline tonyk

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Re: Liquid AGS shares (LAGS fund)
« Reply #8 on: May 19, 2014, 12:02:16 AM »
Liquidity is what Bitshares-PTS is for...

Those that donated to the fund knew or should have known that AGS wasn't going to be liquid.
AGS funds is the equivalent to funds on kickstarter. The difference here is that we get equity unlike on kickstarter. I'm sure the people that donated money to the Oculus Rift team would have liked some equity especially now that Facebook bought Oculus Rift for $2 billion.

Do not worry too much, AGS will in all likelihood stay non-liquid forever. This thread is for folks  who think decision/s may exist to approximate (as close as possible) liquidity of AGS, as well as for those who voice their opinions why it could not be achieved.

Do you know what I like about constructive criticism… it can have (although not always have) constructive/ positive consequences.
 So, let’s try to do that!
« Last Edit: May 19, 2014, 12:18:19 AM by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline gamey

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Re: Liquid AGS shares (LAGS fund)
« Reply #9 on: May 19, 2014, 12:22:09 AM »
Thanks! Great start of the discussion!

‘I am not sure what you would do with unpurchased shares.  Does NXT have a proof of burn address ?’
This is one of the things that I do not hove solution to. One workable (I think) solution is sending to all remaining shares to the shareholders proportionally to their stake.

‘I'm skipping out all the buyback rules’
Should not be a major issue as they concern/involve  accounting transaction only( # of LAGS shares and the underlying currency (NXT in this case))

 I responded because I hate it when I post something and no one responds.  I've noticed you respond to my posts so I decided to return the favor.  Thinking these things through is always good for increasing our understanding.

I think that at the end of AGS, transferring remaining shares to everyone in a proportional way would work.  It woud also keep the bookkeeping nice and clean.  No special case for unpurhased assets etc.

The interesting thing is you could do this immediately if you found enough people to own a pts key.

There is so much stuff that is illegal that you might want to look into how you word this stuff.  Trustees might be scared because of the way the US government works and mandatory sentencing.  Some attorney general in New York could ruin anyone for the rest of their life on a whim. Not likely, but very much possible.

The upside is you could start this tommorow adn then when NXT releases their the remaining aspects of their toolkit, you could make the dividend payment system quite simple without a lot of code.

Unfortuntaely i think it will be some time before the moneytruck backs up our homes to unload.
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Offline tonyk

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Re: Liquid AGS shares (LAGS fund)
« Reply #10 on: May 19, 2014, 12:49:16 AM »

‘There is so much stuff that is illegal that you might want to look into how you word this stuff.  Trustees might be scared because of the way the US government works and mandatory sentencing.  Some attorney general in New York could ruin anyone for the rest of their life on a whim. Not likely, but very much possible.’
Yes, a lot of what seems normal business is heavily regulated. A lot of ‘no harm to no one’ activities are even considered crime. But considering that I know of I guy working from US, who will not only write the code for decentralized but still “Bank” and “Exchange, he will also be the biggest stockholder in it, and will control the significant part of the ‘nodes/delegates’ that insures its operation; my small ‘investor/donator’ club should not be the top priority of the guardians of the existing order…

‘I've noticed you respond to my posts so I decided to return the favor. ‘
My primary job is a tedious one that requires a lot of long hours, with not much to do, but monitor ‘activities’… 99.9% of the time there is nothing to actually monitor, so I just hang on 5, 6 places and if something interests me, I post in response my ‘largely inconsequential’ thoughts…

'The interesting thing is you could do this immediately if you found enough people to own a pts key.'
Your suggestion with the representatives/trustees definitely improves the chances to this idea succeeding! That is why I like your proposal a lot!
 Without those improvements I can start this (expecting everyone to just trust me) literally tomorrow.
« Last Edit: May 19, 2014, 01:27:57 AM by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline gamey

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Re: Liquid AGS shares (LAGS fund)
« Reply #11 on: May 19, 2014, 01:48:45 AM »

One thing I realized is that ...  if the Bitshares DACs pay their dividends in shares, then it will be hard to utilize NXT's virtual corporation code to send those shares.  When I proposed my ideas I was thinking the DACs would pay in something that NXT could utilize..  But you're talking Bitshares DAC shares being paid according to NXT AE.  This will not work unless you translate the Bitshares DAC shares into NXT before paying them out..  Or you add another layer of complexity where people who own the NXT asset give you their public keys to their Bitshares wallet.
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Offline tonyk

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Re: Liquid AGS shares (LAGS fund)
« Reply #12 on: May 19, 2014, 01:57:12 AM »
‘...give you their public keys to their Bitshares wallet’
As long as those are their public keys I think this would not be a problem.
 Or I am missing something here?
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline gamey

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Re: Liquid AGS shares (LAGS fund)
« Reply #13 on: May 19, 2014, 02:06:43 AM »
‘...give you their public keys to their Bitshares wallet’
As long as those are their public keys I think this would not be a problem.
 Or I am missing something here?

It just requires human interaction etc.  You could use the NXT messaging system to receive the public keys.  Initially I was just thinking it could be written in one glorious script so that management overhead would be minimal.

 I don't think you're missing anything ... but it just adds to work.

What happens when someone buys the asset/shares on AE but fails to give you a key ?  you'll have to keep track of all that etc.  When you can do it in one monolithic process, then it is better for everyone.  However, if you are committed to dealing with all the little issues then go for it.  You might want to specify a minimum investment to keep a sanity level.  Otherwise you'll end up where you are expecting .05 USD in revenue from someone, but still have to keep track of their key etc.
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Offline tonyk

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Re: Liquid AGS shares (LAGS fund)
« Reply #14 on: May 19, 2014, 02:23:41 AM »
Point taken…
 I was having some ideas, similar to that earlier today; just in case I end up doing the distribution  manually/semi-manually – though about 1 LAGS ~~=5 AGS+ ( i.e. target of 5+ AGS/LAGS instead of 1+/1 AGS/LAGS); plus (maybe) no decimal shares ( I think NXT lets you choose that)
« Last Edit: May 19, 2014, 02:28:47 AM by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

 

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