Fee Flow / Yield Info Graphic

[bytemaster]

I believe this image shows where market fees come from:



If fees are paid in USD only (no BTSX) then the wallet will default to 3x the value of the BTSX fee and the delegates running default code will require there be at least 2x the value.     This puts USD only transactions at $0.05 right now.

BitAsset fees are higher because of market risks and to encourage people to pay BTSX and fund delegates. 

[xeroc]

Very nice!


The default fee is now 0.5 BTSX for transactions. Should it be updated in the Infographic?

the tx fees in btsx are denoted with "tx fees" (upper block)
the fees in bitAsset (not yet implemented in the software) are just arbitrary numbers .. ie 0.1 bitUSD

[Riverhead]

Very nice!


The default fee is now 0.5 BTSX for transactions. Should it be updated in the Infographic?

[bytemaster]

Should we start calling the "rainy day fund" the "rewards fund"?

Reserve fund.

I agree. I would also like to bring up an earlier point regarding the supposed lack of a need for an insurance fund. I don't think the yields replace the need for an insurance fund. If a black swan event occurs and the BitUSD issued is partially collateralized by the BTSX held as collateral in the short position, this might hurt the peg. As the BitUSD that was collected for yield is instead destroyed until BitUSD is fully backed, the peg should return to normal. However, that may take some time. On the other hand if there was enough BitUSD held in the reserve fund, the necessary amount of BitUSD could be immediately destroyed to give BitUSD holders immediate confidence that their BitUSD is fully backed. They do not have to assume the network will be able to collect BitUSD in the future to balance things; they will know it immediately.

In fact can't there be a possibility in which the network will not be able to collect enough BitUSD to again fully back the remaining BitUSD with the BTSX held in collateral? If everyone tries to convert their BitUSD into BTSX, couldn't it be possible that some slow movers will have BitUSD without any short position to back it. In such a scenario, the network was too eager in providing BitUSD holders high yields. All the quick movers were able to cash out their BitUSD with high yields into BTSX. The slow movers got stuck with worthless BitUSD.

I think there should be a minimum limit on the BitAsset reserve fund. This minimum limit should be proportional to the amount of the BitAsset issued. If the reserve fund is below the minimum limit, the BitAssets collected as fees should first be used to fill up the fund to above the limit. As the fund grows well above the limit, the network should determine an appropriate yield rate to pay to the issued BitUSD that will not reduce the fund levels below the minimum limit. It should also consider the history of incoming fees in order to pick a yield rate that is fairly consistent (not too volatile) but still high enough to not grow the reserve fund without bound. If a black swan event occurs, the network should immediately destroy as much of the BitAssets in the reserve as necessary and possible to make the BitAssets fully backed.

This merits consideration by the devs.

The reserve fund will average the fees collected by the network over 1 year because it takes 1 year to pay them out.   Thus the reserve fund will continue to grow and be available to handle issues. 

[oldman]

Should we start calling the "rainy day fund" the "rewards fund"?

Reserve fund.

I agree. I would also like to bring up an earlier point regarding the supposed lack of a need for an insurance fund. I don't think the yields replace the need for an insurance fund. If a black swan event occurs and the BitUSD issued is partially collateralized by the BTSX held as collateral in the short position, this might hurt the peg. As the BitUSD that was collected for yield is instead destroyed until BitUSD is fully backed, the peg should return to normal. However, that may take some time. On the other hand if there was enough BitUSD held in the reserve fund, the necessary amount of BitUSD could be immediately destroyed to give BitUSD holders immediate confidence that their BitUSD is fully backed. They do not have to assume the network will be able to collect BitUSD in the future to balance things; they will know it immediately.

In fact can't there be a possibility in which the network will not be able to collect enough BitUSD to again fully back the remaining BitUSD with the BTSX held in collateral? If everyone tries to convert their BitUSD into BTSX, couldn't it be possible that some slow movers will have BitUSD without any short position to back it. In such a scenario, the network was too eager in providing BitUSD holders high yields. All the quick movers were able to cash out their BitUSD with high yields into BTSX. The slow movers got stuck with worthless BitUSD.

I think there should be a minimum limit on the BitAsset reserve fund. This minimum limit should be proportional to the amount of the BitAsset issued. If the reserve fund is below the minimum limit, the BitAssets collected as fees should first be used to fill up the fund to above the limit. As the fund grows well above the limit, the network should determine an appropriate yield rate to pay to the issued BitUSD that will not reduce the fund levels below the minimum limit. It should also consider the history of incoming fees in order to pick a yield rate that is fairly consistent (not too volatile) but still high enough to not grow the reserve fund without bound. If a black swan event occurs, the network should immediately destroy as much of the BitAssets in the reserve as necessary and possible to make the BitAssets fully backed.

This merits consideration by the devs.

[xeroc]

ok .. got it!

[bytemaster]

Ok so I guess there is no RPC call where I can set the minum fee required for a tx to be incldued in a block that my delegate builds?

Ok but aren't you getting the average of all (delegates) anyway?

Yes... the fees are averaged out... so one delegate increasing their fee requirement will only delay the transaction.   

[tonyk]

Ok so I guess there is no RPC call where I can set the minum fee required for a tx to be incldued in a block that my delegate builds?

Ok but aren't you getting the average of all (delegates) anyway?

[xeroc]

Register a new delegate.
Like in:
117.delegate.xeroc

I can go higher with payrate .. sure

There is no "hard coded min fee"... delegates can set higher fees for being included in their block.

Ok so I guess there is no RPC call where I can set the minum fee required for a tx to be incldued in a block that my delegate builds?

[arhag]

Should we start calling the "rainy day fund" the "rewards fund"?

Reserve fund.

I agree. I would also like to bring up an earlier point regarding the supposed lack of a need for an insurance fund. I don't think the yields replace the need for an insurance fund. If a black swan event occurs and the BitUSD issued is partially collateralized by the BTSX held as collateral in the short position, this might hurt the peg. As the BitUSD that was collected for yield is instead destroyed until BitUSD is fully backed, the peg should return to normal. However, that may take some time. On the other hand if there was enough BitUSD held in the reserve fund, the necessary amount of BitUSD could be immediately destroyed to give BitUSD holders immediate confidence that their BitUSD is fully backed. They do not have to assume the network will be able to collect BitUSD in the future to balance things; they will know it immediately.

In fact can't there be a possibility in which the network will not be able to collect enough BitUSD to again fully back the remaining BitUSD with the BTSX held in collateral? If everyone tries to convert their BitUSD into BTSX, couldn't it be possible that some slow movers will have BitUSD without any short position to back it. In such a scenario, the network was too eager in providing BitUSD holders high yields. All the quick movers were able to cash out their BitUSD with high yields into BTSX. The slow movers got stuck with worthless BitUSD.

I think there should be a minimum limit on the BitAsset reserve fund. This minimum limit should be proportional to the amount of the BitAsset issued. If the reserve fund is below the minimum limit, the BitAssets collected as fees should first be used to fill up the fund to above the limit. As the fund grows well above the limit, the network should determine an appropriate yield rate to pay to the issued BitUSD that will not reduce the fund levels below the minimum limit. It should also consider the history of incoming fees in order to pick a yield rate that is fairly consistent (not too volatile) but still high enough to not grow the reserve fund without bound. If a black swan event occurs, the network should immediately destroy as much of the BitAssets in the reserve as necessary and possible to make the BitAssets fully backed.

[bytemaster]

how are delegates supposed to 'increase fees'?

Register a new delegate.
Like in:
117.delegate.xeroc

There is no "hard coded min fee"... delegates can set higher fees for being included in their block.   

[tonyk]

how are delegates supposed to 'increase fees'?

Register a new delegate.
Like in:
117.delegate.xeroc

[xeroc]

how are delegates supposed to 'increase fees'?

[bytemaster]

Perhaps a more accurate statement would be "the end game for delegates will always be delegates breaking even".

All occupations eventually revert to the same average rate of return given the risks and free competition.

It remains to be seen whether delegates earn enough in transaction fees to scale the network with usage.   In the short-term delegates can increase fees and take 100% pay.  If it becomes obvious that delegates will need a cut of market operations then that can be added.

[bytemaster]

Perhaps a more accurate statement would be "the end game for delegates will always be delegates breaking even".

All occupations eventually revert to the same average rate of return given the risks and free competition.