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Offline bytemaster

Earn 5% on your BitUSD Now with BitShares X
« on: August 15, 2014, 05:21:41 AM »

About 8 months ago we started the +5 meme on this forum when we planned to offer BitAssets that paid interest.  We decided to post-pone the 5% interest plan to simplify implementation and make things easier for the market to price.

Today I am happy to announce the good news that we can provide 5% on BitUSD with BitShares X today (or once the hard fork takes over) without having to implement any code changes what so ever.

Vatalik and I were discussing BitAssets today over dinner and he proposed a hypothetical BitAsset that had its price defined as a mathematical function of time and suggested that it would be unstable.    We debated the issue for a while and then I realized exactly what that would be... that would be a BitAsset where the shorts paid the longs X% interest. 

So we can define a new asset BitUSD5 that has a market valued defined by the continuously compounded 5% ROI on a dollar starting the day it launched.  Holding this asset would appreciate at 5% based upon consensus alone and shorts would only short if they expected the price of USD to fall faster than 5%. 

In other words, we can do through market consensus what we had originally planned to implement in code.  If the theory of BitAssets holds true, then this process should work.

The question remains is how much market demand is there for such an asset.   The crazy thing is we could peg to any interest rate or even the inflation rate + X%. 
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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 Overthetop

Re: Earn 5% on your BitUSD Now with BitShares X
« Reply #1 on: August 15, 2014, 05:40:06 AM »

 +5% +5% +5%
« Last Edit: August 15, 2014, 05:41:46 AM by Overthetop »
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Offline tonyk

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Re: Earn 5% on your BitUSD Now with BitShares X
« Reply #2 on: August 15, 2014, 05:50:55 AM »
The question remains is how much market demand is there for such an asset.

Obviously enormous in your opinion...
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline Riverhead

Re: Earn 5% on your BitUSD Now with BitShares X
« Reply #3 on: August 15, 2014, 07:26:05 AM »
What incentive would there be to short at 5% interest vs the 0% of bitUSD?

Offline Markus

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Re: Earn 5% on your BitUSD Now with BitShares X
« Reply #4 on: August 15, 2014, 07:33:27 AM »
The question remains is how much market demand is there for such an asset.

Obviously enormous in your opinion...

Yes, the demand should be enormous. The problem will be that there won't be much supply. :)

… did I understand that correctly, that there will be two BitUSDs? One with interest and one without?

Offline liondani

Re: Earn 5% on your BitUSD Now with BitShares X
« Reply #5 on: August 15, 2014, 07:48:22 AM »
do you mean Vitalik Buterin?
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Offline liondani

Re: Earn 5% on your BitUSD Now with BitShares X
« Reply #6 on: August 15, 2014, 08:01:14 AM »


... that would be a BitAsset where the shorts paid the longs X% interest. 

what about a combination of shorts  + delegates to pay x% interest to the longs?

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Offline xeroc

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Re: Earn 5% on your BitUSD Now with BitShares X
« Reply #7 on: August 15, 2014, 08:03:23 AM »
do you mean Vitalik Buterin?
good catch .. i read Vikram ..

so?
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Offline santaclause102

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Re: Earn 5% on your BitUSD Now with BitShares X
« Reply #8 on: August 15, 2014, 08:20:51 AM »
(1) Wouldn't this increase the complexity for traders? With no interest (no 5%) traders only have to speculate on whether BitUSD/USD falls/increases against BTSX at any time or within the next xy if they want to finish the trade fast again but timing is necessary to make money on a trade. With an interest through market peg traders have to calculate also at which point in time their guess about the ratio of BTSX and BitUSD will be in place.

(2) If BitUSD wins 5 % per year BTSX would have to loose 5% per year (if no other factors play a role like fees/dividends or share appreciation due to growth/speculation). Would the fees be high enough to compensate for the loss? If not I think that would not a be a huge problem. Traders of BTSX can take that into account.

Offline Riverhead

Re: Earn 5% on your BitUSD Now with BitShares X
« Reply #9 on: August 15, 2014, 08:34:17 AM »
(2) If BitUSD wins 5 % per year BTSX would have to loose 5% per year (if no other factors play a role like feesidends or share appreciation due to growth/speculation). Would the fees be high enough to compensate for the loss? If not I think that would not a be a huge problem. Traders of BTSX can take that into account.


The 5% is payed by the shorts to the longs. There's no change in supply is there?

Offline luckybit

Re: Earn 5% on your BitUSD Now with BitShares X
« Reply #10 on: August 15, 2014, 10:04:32 AM »
(2) If BitUSD wins 5 % per year BTSX would have to loose 5% per year (if no other factors play a role like feesidends or share appreciation due to growth/speculation). Would the fees be high enough to compensate for the loss? If not I think that would not a be a huge problem. Traders of BTSX can take that into account.


The 5% is payed by the shorts to the longs. There's no change in supply is there?

Someone would have to go long BitUSD? Please explain?
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Offline bytemaster

Re: Earn 5% on your BitUSD Now with BitShares X
« Reply #11 on: August 15, 2014, 10:12:58 AM »

do you mean Vitalik Buterin?
good catch .. i read Vikram ..

so?

You heard me.  The v man himself.


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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 bitcoinerS

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Re: Earn 5% on your BitUSD Now with BitShares X
« Reply #12 on: August 15, 2014, 11:15:01 AM »

do you mean Vitalik Buterin?
good catch .. i read Vikram ..

so?

You heard me.  The v man himself.


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Vitalik's name was misspelled in the original post causing confusion.
>>> approve bitcoiners

Offline ebit

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Re: Earn 5% on your BitUSD Now with BitShares X
« Reply #13 on: August 15, 2014, 11:25:01 AM »
I don't think it is a good idea.
BitUsd5 BitUsd6 BitUsd7 BitUsd8 BitUsd9......
Like
Goldcoin10%gold  Goldcoin20%gold  Goldcoin30%gold Goldcoin40%gold......
May be it will cause competition,and out-of-balance.
But have a try is ok.

Another  question:
The Bitusd's  largest number of supply100,000,000,000 USD , is fixed or  Adjustable?

Offline Riverhead

Re: Earn 5% on your BitUSD Now with BitShares X
« Reply #14 on: August 15, 2014, 11:28:40 AM »

do you mean Vitalik Buterin?
good catch .. i read Vikram ..

so?

You heard me.  The v man himself.


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Interesting.

 

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