Best MUSIC DAC launch model for 2014?

[CLains]

Sounds like a good plan, if you can handle the hassle. There is likely diminishing returns on percent stake put up in the pre-sale, so more than 20% would likely be a waste.

[sschechter]

You can raise the funds in any coin you want, but you would need to pick a point where all your coins are converted to a common metric (USD).

IE: You've got an AGS style fundraiser that runs every day for a month.  After the first day, you've recieved 500 bitUSD and 2 BTC.  At midnight GMT (the donation cutoff for the day), you use a predetermined price feed to do your conversion.  500 bitUSD is $500, and 2 BTC @ $400 = $800.  Total donations = $1300.  Give the bitUSD donators  5/13ths of the shares, and give BTC donators 8/13ths of the shares. This will avoid selling pressure on one coin in order to exchange for the other coin that gets the better deal.  Now you can accept BTC, BTSX and BitUSD for donations, and we get to keep our fees.  Am I missing something?

[Shentist]

dilution is not a problem, but the dilution via delegates!

just assume i run a delegate and earn everyblock i produce x Notes.

how will anybody prevent my to use it for my self?

especially if i am a major shareholder and can easy hold me in power?

if we see the BTSX votes as normal, not many will vote. so the Music Foundation will hold a big stake and I3.
i would like to have here some promises upfront how they will vote or only after approval will change.

What has to cleared. how will the fees structured? peertracks is not part of the bitshares music DAC and will be a seperated entity? So do you use the raised funds from the presales to pay for the peertrack side development? would like to read more about the plans.

[mf-tzo]

But I would like to use my bitusd to further invest in the IPO. I do not have any bitcoins.

Why should I bother convert my bitusd, to btsx, to btc to send btc to the IPO?

The devs accepting bitusd in their IPO, and then convert them to usd, btc, doge or whatever will only enhance the liquidity of bitusd and the confidence...

People not familiar with bitusd, people outside of this community, can always participate with btc

Anyway...The devs are more appropriate to judge how to handle that..just my 2bitcents..

[Pheonike]

If the BTSX client was more stable i would be in favor of bitUSD. But since it's still in Beta I think it would cause more confusion and harm to the IPO than benefit. When the client is more mature the bitUSD would be great for this type of thing.

[Empirical1.1]

After reading all your posts and cob's reply my new thoughts are as follows:

1. A total balance between IPO-Foundation of no more than 20% is very acceptable

1. An IPO including bitusd and bitcoins would be good. Although there is no much liquidity in bitusd it will help the ecosystem. People will actually have to buy bitusd and give them to the IPO so even the devs exchange all the bitusd for usd I don't think that this will have any negative result in dumping bitusd on the market. It will just create more liquidity for bitusd.

2. I am more than happy with anything more than 35/35 for AGS/PTS.

3. In the end of the day it is up to the devs how to allocate the shares. As Stan said, if they did not choose wisely another competitor will overtake them.

4. Well done cob. You have already created a lot of interest in your DAC within the community within a couple of days.

  I'm also in favour of offering BitAssets as a donation option.

I think a 20% pre-sale AGS style over 30 days sounds good

Does the 10% earmarked for the foundation go to Eddie & Cob or is it designed to fund the DAC?

I'm fine with either, but if it that 10% isn't designed to fund the DAC then I'd suggest a 10% pre-sale and 10% shares set aside.

Because imo, people will undervalue BitShares Music right now, so rather than say raising circa $4 million of BTC for 20% of the shares to fund BitShares Music. I bet 12 months from now we'd rather have raised $2 million for 10% and have 10% of the shares to fund the DAC remaining as they will be worth much more than > $2 million.

I'm still against the other strategy of constant, undefined, additional dilution. (Only in the case of a merger/other business deal/pre-planned funding round/emergency would dilution be needed not as a method of financing the DAC day to day. At least not till DAC's & delegate systems are more established.)

[mf-tzo]

After reading all your posts and cob's reply my new thoughts are as follows:

1. A total balance between IPO-Foundation of no more than 20% is very acceptable

1. An IPO including bitusd and bitcoins would be good. Although there is no much liquidity in bitusd it will help the ecosystem. People will actually have to buy bitusd and give them to the IPO so even the devs exchange all the bitusd for usd I don't think that this will have any negative result in dumping bitusd on the market. It will just create more liquidity for bitusd.

2. I am more than happy with anything more than 35/35 for AGS/PTS.

3. In the end of the day it is up to the devs how to allocate the shares. As Stan said, if they did not choose wisely another competitor will overtake them.

4. Well done cob. You have already created a lot of interest in your DAC within the community within a couple of days.
 

[Empirical1.1]

I dont see anything wrong with the pre-sale. It's a good way to create a buzz a get new more people involve. If you are worried about Notes being cheaper during pre-sale, then sell your PTS right before the snapshot(when they should be worth the most)  and buy more more in the pre-sale.

I'm personally not against the pre-sale though I haven't looked into it.
I also think the AGS & PTS allocation is very good and I'll certainly give the music DAC more attention and input now.

I currently think I'm against the ability for constant dilution. I prefer raising funds and also setting aside a specific amount of shares to fund development. Then only when there is a significant business deal on the table, may dilution occur when the majority of shareholders are giving it their full attention, not as a routine everyday occurrence. https://bitsharestalk.org/index.php?topic=9452.msg123051#msg123051

[Pheonike]

I dont see anything wrong with the pre-sale. It's a good way to create a buzz a get new more people involve. If you are worried about Notes being cheaper during pre-sale, then sell your PTS right before the snapshot(when they should be worth the most)  and buy more more in the pre-sale.

[Empirical1.1]

I wouldn't allocate 30% to presale. It's too much imo. Investors who participate in presale basically seek to short-term profit; they are dumpers. In addition, if we allocate too many Notes to presale, the average price will be lowered, especially given the situation that crypto-market is experiencing recession, and then this will generate negative effects on AGS/PTS holders.

And it is not 'only 5%' because initial suggestion was 45%. 15 out of 45 is a quite big difference.

I fully agree with that quote

I'd disagree because sufficient starting capital and new supporters (also for the whole bitshares ecosystem!) are so crucial. Thinking in terms of exponential growth and giving away first helps a lot in my experience! A balance has to be found...

Where are your numbers to back this? How do we know they aren't just trying to line their pockets?

Show an adoption graph which proves that adoption is going at a certain rate and then make a roadmap of features that are being paid for.

Asking for money without any math, charts, strategy or business plan is not fair to investors. What are we going to learn in the IPO that we don't already know to make the IPO worth doing?

4.  By giving Eddie and Cob the freedom to explore all business models we are now at 35/35 up from 25/25 and way up from the 10/10 minimums.

And we should also make it clear that how many more Notes at most will be brought to this DAC by delegates. Otherwise investors may have doubts “is it possible for me to buy 5% of the shares which may become just 0.005% in two years due to the inflation?"

Bitcoin POW is bad but at least the investors clearly know that a certain amount of coins are mined each ten minutes. You make your choise.

We should tell the investors “no, we have restrictions, your 5% would at least worth 1%, no less."

I think that's a fair request to make of them. And of the BitShares X folks as well.

They need to think very carefully about their incentives. The DAC needs participants and the wrong incentives will make us move our attention elsewhere. If PTS/AGS owners feel like they'll lose in the long term then they aren't going to have a reason to hold or stay in right now.

Why wouldn't it be rational to immediately sell before the presale buyers who got even cheaper notes can sell theirs and then buy back in a year or two later after other DACs with better incentives and no inflation have made profit?

Inflation is not a very competitive incentive unless you have an audience or group of participants who truly believe in the success of your DAC. Not many people at this time believe in Bitshares Music being a success enough to deal with inflation early on.

Also Bitcoiners aren't going to hold either when the price of Bitcoin is crashing due to inflation. Bitcoiners will pump and dump and since AGS/PTS holders know this is coming why wouldn't the AGS/PTS holders immediately sell too? AGS/PTS holders aren't going to want to be bag holders.

Tell me why the scenario would play out different?

None of this takes place in a vacuum.  The people making the decisions about whether to add value to the DAC in exchange for new notes are the existing noteholders who are not likely to approve anything that is not expected to increase their net worth.

The 10% allocated to the BitShares Music Foundation is also your assurance that the Foundation will be properly motivated to act in a way to protect the net worth of all noteholders.

To summarize:

There is downward pressure on price for issuing new notes.
There is upward pressure on price from the benefit of what those notes are buying.

You don't approve the deal unless the latter pressure is greater than the former.

Net result - all such deals should increase the value of your shares over time.

That's why flesh and blood and brick and mortar companies do this routinely.

It is the time-proven way to grow a company for the benefit of all its stakeholders.    

Sometimes not all the stakeholders...  http://www.youtube.com/watch?v=mOMUe26X3mo

[amencon]

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

I think only 10% should go to pre-sale. 20% to pre-sale is too high.

Also at what price should the presale be? It has to be higher than what PTS and AGS paid for it otherwise it's at the expense of PTS and AGS. PTS and AGS was like the initial pre-sale. People donated and got shares.

Why should the cost of Notes obtained by PTS cost less than those bought directly through a pre-sale? 

In fact I think it makes sense to have some Notes for sale cheaper at the pre-sale, that way investors have a choice.  If they believe in I3 and the DAC toolkit being developed they can pay a bit more and get shares in all future DACs following the social consensus or if they are really only interested in the Music DAC specifically they can get shares for just that at a small discount rate.

I do agree that it will be a bit disappointing if direct sale Notes end up being orders of magnitude cheaper than what I paid for the PTS/AGS that grant me Notes, but considering that 70% are going to PTS/AGS investors I doubt that will be the case.

Because PTS owners will probably dump and go into another DAC. It's a gamble not worth taking but honestly why would you hold shares in a DAC which is going to dilute from the top and bottom?

As much as I like the Music DAC I'm not so confident in it that I would stay in it if they give a better deal to late comers than to the original pre-sale owners (PTS/AGS). If they want PTS/AGS holders to hold then they have to provide an incentive and the best way of preventing a dramatic sell off is to make sure the tokens sold in the pre-sale are more expensive than the deal people got purchasing PTS/AGS.

Otherwise what exactly is the point of continuing with the PTS/AGS ritual for this DAC or future DACs? Why not just scrap PTS/AGS and do presales from this point on?

I'm not following.  If I'm a PTS holder and I'm interested in the Music DAC why would I dump the shares I get?  I've already made my cost plus some for PTS and AGS back on the BTSX I was awarded for my stake in PTS/AGS.  From that perspective the Notes I receive from Oct 10th snapshot are essentially free for me.  I think the Music DAC sounds very intriguing and so I will be keeping my "free" Notes and if excellent new information comes out about it I might even purchase a few more in the pre-sale.  I don't see where the incentive is for me to dump my Notes or why other PTS/AGS holders would do the same unless this was a DAC they just didn't see much potential in.

Regardless of a small amount of dilution, if you believe the DAC has potential then you will be selling your Notes for less than you should be able to in the future.  If you don't believe it has potential then you can cash out and use that money elsewhere, maybe even for a future DAC with a pre-sale that you have more confidence in.  Either way you are getting value from your PTS/AGS as was originally intended.

I was a very early investor in everything bitshares (Keyhotee, PTS AGS, tips for articles, etc.).

Since I will be getting a stake in the Music DAC because of AGS holdings, I will be invested in this project.

For me to be a significant further investor, I suggest you do everything possible to include bitUSD as a funding method. I don't hold Bitcoin beyond what I need for spending (I can't spend btsx or bitUSD as of yet). I don't intend to adversely efffect my existing position by selling btsx or bitusd to buy bitcoin (thus creating downward pressure on my investments) in order to invest in Music DAC.


BitUSD also has volatility lessening advantages over BTC for Music DAC developers without the added hassle and expense of hedging, and demonstrates to the crypto world faith in DPOS over POW

As you understand already, I think, this would be win/win/win

 

I agree with what you say. The IPO/Presale if there is one should be in BitUSD.

Why not make it in BitUSD exclusively? I don't see why it has to be in Bitcoin when the price of Bitcoin is falling anyway.

Why make the pre-sale exclusively in a currency peertracks can't use?  There aren't even that many people that hold bitUSD with which to purchase Notes with.  Nobody has it and nobody can use it.  If you did convince them to accept bitUSD only you might get some people to purchase bitUSD to use for the pre-sale, artificially inflating the share supply temporarily, only for it to all be dumped at once when peertracks needed to actually pay for it's initial startup expenses.  I don't see how short term supply pump and dump is all that desirable, especially at the expense of a much less successful pre-sale.

[Stan]

I wouldn't allocate 30% to presale. It's too much imo. Investors who participate in presale basically seek to short-term profit; they are dumpers. In addition, if we allocate too many Notes to presale, the average price will be lowered, especially given the situation that crypto-market is experiencing recession, and then this will generate negative effects on AGS/PTS holders.

And it is not 'only 5%' because initial suggestion was 45%. 15 out of 45 is a quite big difference.

I fully agree with that quote

I'd disagree because sufficient starting capital and new supporters (also for the whole bitshares ecosystem!) are so crucial. Thinking in terms of exponential growth and giving away first helps a lot in my experience! A balance has to be found...

Where are your numbers to back this? How do we know they aren't just trying to line their pockets?

Show an adoption graph which proves that adoption is going at a certain rate and then make a roadmap of features that are being paid for.

Asking for money without any math, charts, strategy or business plan is not fair to investors. What are we going to learn in the IPO that we don't already know to make the IPO worth doing?

4.  By giving Eddie and Cob the freedom to explore all business models we are now at 35/35 up from 25/25 and way up from the 10/10 minimums.

And we should also make it clear that how many more Notes at most will be brought to this DAC by delegates. Otherwise investors may have doubts “is it possible for me to buy 5% of the shares which may become just 0.005% in two years due to the inflation?"

Bitcoin POW is bad but at least the investors clearly know that a certain amount of coins are mined each ten minutes. You make your choise.

We should tell the investors “no, we have restrictions, your 5% would at least worth 1%, no less."

I think that's a fair request to make of them. And of the BitShares X folks as well.

They need to think very carefully about their incentives. The DAC needs participants and the wrong incentives will make us move our attention elsewhere. If PTS/AGS owners feel like they'll lose in the long term then they aren't going to have a reason to hold or stay in right now.

Why wouldn't it be rational to immediately sell before the presale buyers who got even cheaper notes can sell theirs and then buy back in a year or two later after other DACs with better incentives and no inflation have made profit?

Inflation is not a very competitive incentive unless you have an audience or group of participants who truly believe in the success of your DAC. Not many people at this time believe in Bitshares Music being a success enough to deal with inflation early on.

Also Bitcoiners aren't going to hold either when the price of Bitcoin is crashing due to inflation. Bitcoiners will pump and dump and since AGS/PTS holders know this is coming why wouldn't the AGS/PTS holders immediately sell too? AGS/PTS holders aren't going to want to be bag holders.

Tell me why the scenario would play out different?

None of this takes place in a vacuum.  The people making the decisions about whether to add value to the DAC in exchange for new notes are the existing noteholders who are not likely to approve anything that is not expected to increase their net worth.

The 10% allocated to the BitShares Music Foundation is also your assurance that the Foundation will be properly motivated to act in a way to protect the net worth of all noteholders.

To summarize:

There is downward pressure on price for issuing new notes.
There is upward pressure on price from the benefit of what those notes are buying.

You don't approve the deal unless the latter pressure is greater than the former.

Net result - all such deals should increase the value of your shares over time.

That's why flesh and blood and brick and mortar companies do this routinely.

It is the time-proven way to grow a company for the benefit of all its stakeholders.   

[luckybit]

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

I think only 10% should go to pre-sale. 20% to pre-sale is too high.

Also at what price should the presale be? It has to be higher than what PTS and AGS paid for it otherwise it's at the expense of PTS and AGS. PTS and AGS was like the initial pre-sale. People donated and got shares.

Because PTS owners will probably dump and go into another DAC. It's a gamble not worth taking but honestly why would you hold shares in a DAC which is going to dilute from the top and bottom?

As much as I like the Music DAC I'm not so confident in it that I would stay in it if they give a better deal to late comers than to the original pre-sale owners (PTS/AGS). If they want PTS/AGS holders to hold then they have to provide an incentive and the best way of preventing a dramatic sell off is to make sure the tokens sold in the pre-sale are more expensive than the deal people got purchasing PTS/AGS.

Otherwise what exactly is the point of continuing with the PTS/AGS ritual for this DAC or future DACs? Why not just scrap PTS/AGS and do presales from this point on?
Why should the cost of Notes obtained by PTS cost less than those bought directly through a pre-sale? 

In fact I think it makes sense to have some Notes for sale cheaper at the pre-sale, that way investors have a choice.  If they believe in I3 and the DAC toolkit being developed they can pay a bit more and get shares in all future DACs following the social consensus or if they are really only interested in the Music DAC specifically they can get shares for just that at a small discount rate.

I do agree that it will be a bit disappointing if direct sale Notes end up being orders of magnitude cheaper than what I paid for the PTS/AGS that grant me Notes, but considering that 70% are going to PTS/AGS investors I doubt that will be the case.

I was a very early investor in everything bitshares (Keyhotee, PTS AGS, tips for articles, etc.).

Since I will be getting a stake in the Music DAC because of AGS holdings, I will be invested in this project.

For me to be a significant further investor, I suggest you do everything possible to include bitUSD as a funding method. I don't hold Bitcoin beyond what I need for spending (I can't spend btsx or bitUSD as of yet). I don't intend to adversely efffect my existing position by selling btsx or bitusd to buy bitcoin (thus creating downward pressure on my investments) in order to invest in Music DAC.


BitUSD also has volatility lessening advantages over BTC for Music DAC developers without the added hassle and expense of hedging, and demonstrates to the crypto world faith in DPOS over POW

As you understand already, I think, this would be win/win/win

 

I agree with what you say. The IPO/Presale if there is one should be in BitUSD.

Why not make it in BitUSD exclusively? I don't see why it has to be in Bitcoin when the price of Bitcoin is falling anyway.

[luckybit]

I wouldn't allocate 30% to presale. It's too much imo. Investors who participate in presale basically seek to short-term profit; they are dumpers. In addition, if we allocate too many Notes to presale, the average price will be lowered, especially given the situation that crypto-market is experiencing recession, and then this will generate negative effects on AGS/PTS holders.

And it is not 'only 5%' because initial suggestion was 45%. 15 out of 45 is a quite big difference.

I fully agree with that quote

I'd disagree because sufficient starting capital and new supporters (also for the whole bitshares ecosystem!) are so crucial. Thinking in terms of exponential growth and giving away first helps a lot in my experience! A balance has to be found...

Where are your numbers to back this? How do we know they aren't just trying to line their pockets?

Show an adoption graph which proves that adoption is going at a certain rate and then make a roadmap of features that are being paid for.

Asking for money without any math, charts, strategy or business plan is not fair to investors. What are we going to learn in the IPO that we don't already know to make the IPO worth doing?

4.  By giving Eddie and Cob the freedom to explore all business models we are now at 35/35 up from 25/25 and way up from the 10/10 minimums.

And we should also make it clear that how many more Notes at most will be brought to this DAC by delegates. Otherwise investors may have doubts “is it possible for me to buy 5% of the shares which may become just 0.005% in two years due to the inflation?"

Bitcoin POW is bad but at least the investors clearly know that a certain amount of coins are mined each ten minutes. You make your choise.

We should tell the investors “no, we have restrictions, your 5% would at least worth 1%, no less."

I think that's a fair request to make of them. And of the BitShares X folks as well.

They need to think very carefully about their incentives. The DAC needs participants and the wrong incentives will make us move our attention elsewhere. If PTS/AGS owners feel like they'll lose in the long term then they aren't going to have a reason to hold or stay in right now.

Why wouldn't it be rational to immediately sell before the presale buyers who got even cheaper notes can sell theirs and then buy back in a year or two later after other DACs with better incentives and no inflation have made profit?

Inflation is not a very competitive incentive unless you have an audience or group of participants who truly believe in the success of your DAC. Not many people at this time believe in Bitshares Music being a success enough to deal with inflation early on.

Also Bitcoiners aren't going to hold either when the price of Bitcoin is crashing due to inflation. Bitcoiners will pump and dump and since AGS/PTS holders know this is coming why wouldn't the AGS/PTS holders immediately sell too? AGS/PTS holders aren't going to want to be bag holders.

Tell me why the scenario would play out different?

[Shentist]

1. presale is fine - but communicate clear what will the max. shares available via dellution.  Initial 1 Billion max 2 Billion or so. Maybe in the future you can increase the 2 Billion via voting with support of 51% of avitve shares.

2. consider to accept BTC, LTC and Doge - with with 3 coins you will get buzz in 3 big communities and the trading volume in 24h is big enough to cash out

3. the direction ist good now, but it would better to state not anything new all the time (45/45/10) and one day later (35/35/20/10)

4. keep in mind Stan and Cob you both spoke of 50% 25/25 and this is the reason i expect this as the allocation for PTS/AGS, so if you want to delution it is fine with me, but you could not fall under this allocation after delution. You will loose support here and you should have many reasons to stick to this community.