Author Topic: Liquid AGS shares (LAGS fund)  (Read 4503 times)

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Offline tonyk

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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 gamey

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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.
I speak for myself and only myself.

Offline tonyk

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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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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 »
I speak for myself and only myself.

Offline tonyk

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Am my own echo chamber (much like AdamBLevine)???
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline tonyk

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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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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.