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Offline cob

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Best MUSIC DAC launch model for 2014?
« on: September 29, 2014, 07:01:23 PM »

The announcement made 15 hours ago got very positive feedback from most. The few that had criticisms brought up excellent points which made me think about it from different angles. What was not considered is the time we are living in. I believe there is a way to make the Music DAC better suited to the present which will consequently make it much MUCH more valuable down the line.

The model that was described in in yesterday's post https://bitsharestalk.org/index.php?topic=9459.0 is a great model for avoiding regulatory problems and launching a DAC without significant funds backing up the founders. Just use the toolkit, launch, and then dilute as you go to pay for expenses.

This method comes at a cost though. No up front capital.
This means as soon as the DAC launches and price discovery of it's shares happens, the founders must start diluting the share supply and/or selling shares on the open market. So as soon as a baby DAC is born and needs an influx of people coming in and supporting it (cuz iz goin' to da mooonnn ,etc...) is when the value of it's shares go down and down.
People unaware of the workings of this DAC's model will think it's a crap coin. People that ARE aware of the workings of the DAC would still most likely sell justifying it like so: "a lot of dilution is going to happen without seeing any results for the first few months. I will sell and park my wealth elsewhere until I get news that they are about to launch a working product".
This can mean the entire project can grind to a halt. For the founders to generate enough capital to develop, they will need to sell massive amounts of almost worthless shares, dropping the price even lower, requiring even more dilution, meaning the PTS and AGS holders will be left with tiny slivers of what used to be a nice large slice of pie. This downward share price spiral all stems from the fact that the founders have no initial funds. The never got a first round of funding, they went straight to what should have been a second round of funding technique!

Another small disadvantage is the lack of a crowd-funding hype. Storj and ethereum got massive exposure from their pre-sales. It brought many new users to their communities.


We all know what the dot com bubble was. "You have an idea and a website? Shut up and take my money!"
The crypto space is in a similar boom and we will have another year or two of angel an VC funds coming in no doubt. The BitShares community should take advantage of this. The model proposed yesterday is great for when the capital dries up and VCs/Angel investors move on to a new sphere. That model is perfect for launching a DAC without start up funds.
BitShares Music on the other hand is launching in 2014. Meaning it should take advantage of the hype and publicity a pre-sale can bring. It should use the upfront capital to pay for big corporate attorney fees and regulations and all that fun stuff. We are in the age of the start up war chest. Let's not switch to a model best suited for times of austerity just yet!

We should capitalize on the fact that the crypto world is booming.
We should capitalize on the hype a pre-sale can bring.
We should welcome and introduce a whole new demographics to the world of BitShares and our DACs.
We should also avoid the risk of using new features (unlimited dilution) that can change the entire nature of a very important DAC.


Here is the revised model I would suggest we use.

We allocate 35% to PTS, 35% to AGS, 10% to the Foundation and 20% to a pre-sale.

This means we have a pre-sale, our DAC gets tons in funding in BTC, we get publicity and exposure, we get new members to our community, etc.

Now when we launch the DAC, we don't need to sell off any Notes(Music DAC Shares) until we run out of Bitcoin. This means the Notes on the exchanges don't spiral down in price. People that are ignorant of the DAC's workings will hold on to or buy Notes. People that know of the DACs working WILL keep their wealth parked within the BitShares ecosystem since they know we are not going to dump a ton of freshly minted Notes on the exchanges, collapsing the price and diluting their %. We will merely spend bitcoins during the most crucial time of the DACs existence, it's first few months.

This is a hybrid model, so I am not saying we drop yesterday's concept entirely, no! I'm saying we have a hybrid model. Delegates could dilute, but there would be a cap and it would be no where near as inflationary and potentially problem causing as before. BitShares Music will be billion dollar DAC, it's a bit risky IMO (and Arhag's! and Frodo's!) to test out the infinite dilution model on it. Although dilution is an EXCELLENT tool for a second or third round of funding, especially since it can be decentralized and done by the delegates rather than the foundation.



To compare both scenarios.

Suggested model:
PTS/AGS holders own 70% of a DAC that has Millions in it's coffers for making the product and value of their shares go higher and higher. They also have the capability to have multiple decentralized rounds of funding by voting for delegates that have a LIMITED capability to dilute. As Stan said: The one-two punch! (Pre-sale + dilution option)

Yesterday's model:
PTS/AGS holders own 90% of a DAC that is broke and must dilute and possibly cause a downward share price spiral while shrinking their percentage of ownership.


Suggested Model:
Create hype, get publicity and new members to the community.

Yesterday's model:
Once the chain launches, people that are already on the exchanges can buy the Notes sold just as anyone else would buy any other altcoin.


Suggested Model:
Capitalize on the time we are living through. We ARE in a crypto boom. Let's use this capital to change the world. We will be able to afford the lawyers + compliances. The capital is there, just waiting for a worthy project to fund.

Yesterday's model: Awesome model for removing the barriers to entry needed to start a business. No regulations or capital needed. Great to bring DACs to the entire world, no matter what the economy is like.



Discuss.

« Last Edit: September 29, 2014, 07:13:18 PM by cob »
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 xeroc

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Re: Best MUSIC DAC launch model for 2014?
« Reply #1 on: September 29, 2014, 07:16:18 PM »
you should allow not only BTC but also PTS donations/investment (much like AGS) .. mabye even allow bitAssets!! The tech is here and works the same way as BTC!

besides that, I see it as a fair compromise between the proposal yesterday and the very first 10%ish proposal .. IF you have a marketing team already working on it by all means!
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Offline donkeypong

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Re: Best MUSIC DAC launch model for 2014?
« Reply #2 on: September 29, 2014, 07:20:29 PM »
Sounds great. I agree that a pre-sale would generate some buzz and give people another chance to get in. This seems like a fair revised allocation.

My only added suggestion is to not have the pre-sale drag on and on. AGS lasted for too long. I'd go with 30-60 days maximum unless you need more time to develop the product.

Offline serejandmyself

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Re: Best MUSIC DAC launch model for 2014?
« Reply #3 on: September 29, 2014, 07:28:02 PM »
 +5% for pre sale! Defenatly will bring more people in! Good to see you guys value your own opinion under the pressure of giving it all to pts/ags! But i will also agree that you should accept bitusd and bitbtc on presale, will make it more interesting.  (Ashame you cant only accept bitsassets, that would do some great liquidity for btsx market on the way) 
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Offline Shentist

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Re: Best MUSIC DAC launch model for 2014?
« Reply #4 on: September 29, 2014, 07:34:47 PM »
new suggestion?

how do you restrict delution?
start with it in 6 month and restrict with a cap? for example

starting with 1 billion notes and after 6 month delegate can delute but the max delution will be 1 billion shares?

so in the future we will reach the max cap of 2 billion, but with burning fees you could alwas delute for funding bigger projects.

Offline tonyk

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Re: Best MUSIC DAC launch model for 2014?
« Reply #5 on: September 29, 2014, 07:44:28 PM »
If you put say 1Mil  Notes and let the people bid for a week/month; X BTC (bitUSD whatever) for Y number of shares and the  best offers (totaling 1Mil Notes) are rewarded those Notes - great!

If you go with some form of convoluted nonsense (Ethereum or otherwise)  - NO!



 Storj and ethereum got massive exposure from their pre-sales. It brought many new users to their communities.

And that is WRONG - Storj and  end especially ethereum, got funds not because but despite their crazy IPO/(non IPOs) not because of them.
« Last Edit: September 29, 2014, 08:03:50 PM by dat peg doe »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline roadscape

Re: Best MUSIC DAC launch model for 2014?
« Reply #6 on: September 29, 2014, 07:45:22 PM »
I was still struggling to grasp all the proposals from yesterday, but your rationale helped clear things up!

Your new model sounds spot-on.
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Offline clayop

Re: Best MUSIC DAC launch model for 2014?
« Reply #7 on: September 29, 2014, 07:57:24 PM »
Presale will definitely bring more people in!  +5%
But we should consider the presale method to maximize its benefits and minimize side-effects, such as a huge dumping at just above the presale price, which harms the value of Bitshares Music.

IMHO, fixed price presale has more negative effects than positive ones. People will seek a little profit and will dump their shares in a short-run, regardless of the real value of the DAC.

I think AGS-like presale is a better way; the market will decide the price of the Note. And IMHO again, accepting only BTC is the better way too, because accessibility to PTS or BitAssets is quite low for common people, while people can get and send Bitcoin easily.
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Offline cob

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Re: Best MUSIC DAC launch model for 2014?
« Reply #8 on: September 29, 2014, 08:00:39 PM »
If we go for a pre-sale. It will be a Bitcoin only AGS style one. Only shorter, 30 to 60 days yes.
« Last Edit: September 29, 2014, 08:02:35 PM by cob »
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Offline oco101

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Re: Best MUSIC DAC launch model for 2014?
« Reply #9 on: September 29, 2014, 08:02:39 PM »
Pre sale is good, you need tons of money for the whole project to work, there's so much to do off the blockchain  that needs a lot of money like uploading/downloading the music, make it easy and fun for users(easier said than done) , mobile apps, marketing, etc. Hopefully the pre sale will bring enough funds for this project to reach full potential. I rather have fewer  more valuable share from a perfectly executed DAC then a lots of worthless shares in a slow moving DAC. Time is of the essence. I like this hybrid model !!!!

Offline clayop

Re: Best MUSIC DAC launch model for 2014?
« Reply #10 on: September 29, 2014, 08:03:09 PM »
If we go for a pre-sale. It will be an AGS style one only shorter. 30 to 60 days yes.

Will it be day-by-day allocation? (exactly the same as AGS) Or the allocation will be calculated based on the whole period? (Like viacoin presale)
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Offline cob

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Re: Best MUSIC DAC launch model for 2014?
« Reply #11 on: September 29, 2014, 08:05:52 PM »
If we go for a pre-sale. It will be an AGS style one only shorter. 30 to 60 days yes.

Will it be day-by-day allocation? (exactly the same as AGS) Or the allocation will be calculated based on the whole period? (Like viacoin presale)
Auction a day. Pure AGS style!
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Offline xeroc

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Re: Best MUSIC DAC launch model for 2014?
« Reply #12 on: September 29, 2014, 08:06:34 PM »
If we go for a pre-sale. It will be a Bitcoin only AGS style one. Only shorter, 30 to 60 days yes.
So I guess the PTS/AGS snapshot will be INDEPENDENT of the presale? you launch the presale AFTER the snapshot?
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Offline tonyk

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Re: Best MUSIC DAC launch model for 2014?
« Reply #13 on: September 29, 2014, 08:08:07 PM »
If we go for a pre-sale. It will be an AGS style one only shorter. 30 to 60 days yes.

Will it be day-by-day allocation? (exactly the same as AGS) Or the allocation will be calculated based on the whole period? (Like viacoin presale)
Auction a day. Pure AGS style!

Good! I was just about posting the following....



If we go for a pre-sale. It will be a Bitcoin only AGS style one. Only shorter, 30 to 60 days yes.

I hope you no longer consider Ethereum's IPO to be AGS style. Do you or do you not?
« Last Edit: September 29, 2014, 08:10:48 PM by dat peg doe »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

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Re: Best MUSIC DAC launch model for 2014?
« Reply #14 on: September 29, 2014, 08:21:18 PM »
I think a lot of people don't know about PTS so a hyped presale of a very unique DAC would be good for the bitshare brand imo.

 

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