Author Topic: Why inflation?  (Read 8195 times)

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Offline bytemaster

So shareholders will vote for delegates who will decide on how to spend the money?

Lol, I see where it's heading.

Like most crypto projects, this is an experiment.   If the shareholders of PTS/AGS are smart it will work out well and they will be awarded this privilege in future DACs, if they shareholders are stupid they will vote for PORK and Kickbacks and  future systems will know they cannot trust the shareholders to vote on anything important. 


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Offline BldSwtTrs

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So shareholders will vote for delegates who will decide on how to spend the money?

Lol, I see where it's heading.

Offline Troglodactyl

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It seems like a lot of people missed the fact that there's a hard cap on this, possibly because some of those arguing for the gradual release of stake through delegates were also arguing against a cap.  The cap is why I stopped arguing against this, because with the cap it is nothing more than the developers delegating the distribution of their stake to the protocol, rather than true inflation.

The strength is that it allows voting on diverse delegates to receive funds for growth without relying on any bottlenecks, and could allow replacing developers.  The weakness is that delegates offering payment for votes or other "pork" spending for some stakeholders could loot the development fund if they get enough support.  I think a significant amount will still go to the intended purposes, so with the amount at risk capped I can accept that.

Offline xeroc

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Think of the initial delicates as a development team. 
nice one ;)

Offline bytemaster

Think of it as an upfront allocation that is slowly paid out over time to the developers so that the developers cannot dump

think of it as an upfront application for the community retains the right to change developers rather than mean committed to oneself developers

There is a hardcoded limit just like bitcoin. 

Think of it as allocated to the developer and the developer decides to give it to a delegate. 

Think of the initial delicates as a development team. 

If investors invest according to the total share supply at the end of the day then there is no dilution for them. 

There is nothing unpredictable other than the fact that there might be less dilution then they expect

Think of it as investors have an opportunity to direct the development team by buying in And making a change this in turn gives the investors an opportunity to increase their ROI. 




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Offline luckybit

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I think this post explains in simple terms why it is a good idea.

https://bitsharestalk.org/index.php?topic=6512.msg87206#msg87206

There is also one good post from BM that I can't find right now, that makes the point that the DNS DAC needs a lot of infrastructure build. More than X. Hence the inflationary model. At least that's what I understood.

Of course developers will all say it's a good idea. Maybe right now it seems like a good idea because we still need a lot of development but what happens when this becomes the norm and we are stuck with share dilution?

I just don't like the psychology of this. I want developers to get paid but the budget or slice of the pie set aside for developers should be set at genesis. Just as Satoshi Nakamoto set the cap on Bitcoin at 21 million.

Inflation is a tax. It pays developers at the expense of investors. When it's done pre-allocated and investors buy in then it's safe to say the market already accounted for all this inflation. When inflation happens continuously the price fluctuates creating unnecessary volatility.

Investors who buy in early thinking their buying power will be going up might be shocked to find out that their buying power is going down. If we are going to have inflation without mining then what exactly did we gain as investors? Developers will say we gain security and other benefits which is fine and that is stuff developers can appreciate but the investors want ROI.
 
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Offline luckybit

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The inflation model of the DotP2P DAC has aroused antipathy in the Chinese community. And I found that many old BTS participants also can't answer to "why inflation".

If you have pressed other where through out other posts in this forum, do you mind answer directly to the question?

The main accusation of this inflation model is, Big Mans can always stay to be delegates and win all the new minted coins / shares. And it's a positive feedback loop which can destroy whole economic balance.

I've always been a Bitshares missionary in the Chinese community. But when I was asked this question, I could't give an answer.

What is your answer to this?

Not just the Chinese community is against this idea. A lot in the American community are against it too and have voiced their opinions.

The only reasoning I have for why inflation is that the developers didn't have the foresight to budget in the cost of development into the DAC by giving the developers a percentage up front like what Mastercoin did.

The problem with inflation is instead of a fixed amount of tokens set aside for development, there is now an unpredictable indefinite element to the process. Clarity and precision are preferred in matters such as these and inflation doesn't give a good impression in that regard.

Ask them if they'd prefer a 30% preallocation for devs with no control over how it is spent. This DAC isn't getting bootstrapped from domain sales, that's for sure.

I can't speak for the Chinese community or anyone else really but I would prefer that. I'd rather developers get their fair share up front.

The problem with going with inflation is it validates the concept and psychology of it.  Why validate a concept which is inherently bad? Companies use dilution because they went over budget and it's not usually something investors see as a good thing. Investors don't invest to have their shares diluted after the fact. If it happens as a pre-allocation then there is not the same psychology of being taxed, or diluted, or being messed with by an invisible hand reaching into the pockets of investors after the fact.

I prefer to do my calculations prior to investing and inflation, dilutions and other things such as this make it a lot more complicated.
« Last Edit: August 04, 2014, 08:57:18 am by luckybit »
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Offline toast

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Ask them if they'd prefer a 30% preallocation for devs with no control over how it is spent. This DAC isn't getting bootstrapped from domain sales, that's for sure.
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Offline tonyk

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The above linked post from toast +
this one from BM, was what worked for me getting it.

https://bitsharestalk.org/index.php?topic=6512.msg87351#msg87351

Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline Frodo

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I think this post explains in simple terms why it is a good idea.

https://bitsharestalk.org/index.php?topic=6512.msg87206#msg87206

There is also one good post from BM that I can't find right now, that makes the point that the DNS DAC needs a lot of infrastructure build. More than X. Hence the inflationary model. At least that's what I understood.

Offline coolspeed

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The inflation model of the DotP2P DAC has aroused antipathy in the Chinese community. And I found that many old BTS participants also can't answer to "why inflation".

If you have pressed other where through out other posts in this forum, do you mind answer directly to the question?

The main accusation of this inflation model is, Big Mans can always stay to be delegates and win all the new minted coins / shares. And it's a positive feedback loop which can destroy whole economic balance.

I've always been a Bitshares missionary in the Chinese community. But when I was asked this question, I could't give an answer.

What is your answer to this?
« Last Edit: August 03, 2014, 07:11:40 am by coolspeed »
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