Best MUSIC DAC launch model for 2014?

[donkeypong]

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.

[muse-umum]

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."

[arhag]

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.

Yeah, that seems nice but they still need to justify the 20% IPO in the 35/35 model. What are the challenges and expenses going to be in the growth phase? Is 20% large enough for the IPO to raise enough funds or will it be too small that BitShares Music will be dead on arrival? Or does it end up requiring doubling the share supply through inflation to raise the remaining necessary funds just to survive the initial phase (meaning we would have been better off even doing a 20/20 model to begin with)? Investors need to have some sense of this stuff before putting money into an IPO. Obviously no one can predict the future, but I don't think it is too much to ask the team for a better explanation of the economics behind this DAC and the challenges it faces (the current information publicly available is too vague and limited). These allocation details are meaningless to me when I haven't seen a clear explanation of how the mechanics of the DAC provide value to NOTES, or what kind of additional costs this particular DAC faces due to unique challenges such as copyright, dealing with the incumbent music industry, DRM, etc.

[Stan]

less likely to complain about not getting their 45%.

It amazes me how quickly an entitlement mentality sets in.
The social consensus is for 10%.

Developers can allocate the remaining 80% however they think will allow them to outmaneuver their competition.

http://bitshares.org/10-natural-laws-of-the-crypto-asset-universe/

The music industry has Big Elephants stomping around.
BitShares music must be prepared to take them on head to head.
This will take a Big War Chest.
Let's not make the assumption that accumulating any amount of resources is too much.

In this doge-eat-doge world, the name of the game is to
leave no room for someone to clone your software and field a more competitive DAC.

Cob's job is to generate a massive fast-rolling stone that gathers all the moss in its path.

Period.

I fully agree with you, Stan. However, you did mention that the BitShares Music developer was giving PTS/AGS 50%, so that was the promise that all of us have been hanging onto these last few months as we continued to donate to AGS and acquire more PTS. Then we heard it would be the minimal 20%, so you can see where that angst came from. Now 90% or 80% or 70% are very generous numbers; I am thrilled with any of these suggested allocations and I strongly agree with Cob that an initial fundraiser would generate some buzz + bring in some new money + make it harder for a forker to catch up. That is well worth the cost of a slightly smaller share.

Keep this in perspective, folks. A few days ago, we were looking at a minimal share allocation of 20% to PTS/AGS. Now we are looking at significantly more than the 50% we were once promised. Stop splitting hairs and thank these generous developers for increasing the allocation for the BitShares community...and for all their great work on this DAC.

I, for one, am more than satisfied with Cob's latest proposal.

Well said.

For the record:

1.  The original concept was 50% to be split 25/25 while Eddie's company got the other half.
2.  That was an awesomely fair deal given that it is Eddie's expertise and contacts that make the company.
3.  Developers need to be free to explore different business models and should not be held to their first draft strawman.  Everything should be on the table until the genesis block is poured.
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.

[clayop]

I agree with Stan. If cob will attract musicians and labels with presale funds, he now has a powerful weapon against competitors. This will be win-win game both for community, devs, and presale participators.
I'm satisfied with 35/35/20/10 allocation and looking forward to cob and Eddie's further steps.

[donkeypong]

less likely to complain about not getting their 45%.

It amazes me how quickly an entitlement mentality sets in.
The social consensus is for 10%.

Developers can allocate the remaining 80% however they think will allow them to outmaneuver their competition.

http://bitshares.org/10-natural-laws-of-the-crypto-asset-universe/

The music industry has Big Elephants stomping around.
BitShares music must be prepared to take them on head to head.
This will take a Big War Chest.
Let's not make the assumption that accumulating any amount of resources is too much.

In this doge-eat-doge world, the name of the game is to
leave no room for someone to clone your software and field a more competitive DAC.

Cob's job is to generate a massive fast-rolling stone that gathers all the moss in its path.

Period.

I fully agree with you, Stan. However, you did mention that the BitShares Music developer was giving PTS/AGS 50%, so that was the promise that all of us have been hanging onto these last few months as we continued to donate to AGS and acquire more PTS. Then we heard it would be the minimal 20%, so you can see where that angst came from. Now 90% or 80% or 70% are very generous numbers; I am thrilled with any of these suggested allocations and I strongly agree with Cob that an initial fundraiser would generate some buzz + bring in some new money + make it harder for a forker to catch up. That is well worth the cost of a slightly smaller share.

Keep this in perspective, folks. A few days ago, we were looking at a minimal share allocation of 20% to PTS/AGS. Now we are looking at significantly more than the 50% we were once promised. Stop splitting hairs and thank these generous developers for increasing the allocation for the BitShares community...and for all their great work on this DAC.

I, for one, am more than satisfied with Cob's latest proposal.

[Stan]

Developers can allocate the remaining 80% however they think will allow them to outmaneuver their competition.
...
This will take a Big War Chest.
Let's not make the assumption that accumulating any amount of resources is too much.

Hmm, so this is an interesting question for you. What do you think the balance is between pleasing AGS/PTS holders and raising funds by IPO (basically what is the ideal value of x in my previous post)? On one hand, pleasing AGS/PTS holders gives the DAC a strong initial community support which can pay off in terms of marketing. On the other hand, more capital can be used to fund development, legal costs, and also marketing. Furthermore, an IPO buys you a great community of initial supporters as well, and in fact, I would argue it is better support (stronger hands) than AGS/PTS holders because they are self-selected during the IPO. Should x = 0? I'm not being facetious, I'm genuinely wondering what the ideal distribution is for an economically rational (not altruistic) DAC creator.

That brings up another point: getting the blessing and support of I3 is a huge deal (especially in these early stages) and allocating the minimum 10% to AGS/PTS is a way of getting that, but what exactly is I3's gain in providing support to third-parties who do this, considering the fact that I3 is not holding a huge stake of AGS and PTS? Actually is that even correct? I know you guys converted BTC to BTSX, but are you still holding huge amounts of PTS, and if so, what is the advantage of doing that rather than dumping it for more BTSX and then optionally buying stake in only the interesting DACs through the IPO just like everyone else.

Now these are the kinds of questions I like to see people asking!

Each developer has to ask herself, "when I make this move, what move does that leave my competitor."

In the absence of any other factors, if I do 40/40/20 will my competitor do 48/48/4? 

So let's look at COB's latest breakdown:  35/35/20/10

What will a competitor do to make a clone competitive?   Will doing 45/45/0/10 win over all the support from this community?  Will promising not to do further rounds of dilution help?

Let's suppose a competitor tries that.  Now there are BitShares Music and ACME Music competing.  Everybody here has shares in both.  Some will sell their ACME to buy more BitShares and some will do the opposite.  Depends on who they think has the stronger hand (or, sadly, depends on some non-economic philosophical bias.)

Let the games begin.

Now Cob deploys his weapons:

He has the BitShares brand (shows you who's business model we believe in)  )
He has the funds he was able to raise via pre-sale which keeps him ahead on innovation and marketing.
He has the ability to make teaming deals with potential partners and artists using some of those funds.
He has the ability to attract Big Elephants via dilution-based mergers.
And he has Eddie and his experience, contacts, and vision.

Now, the question for Cob is, is it worth giving one or two of those advantages over to his competitors by not including them himself?

Remember, whatever he doesn't do is left for his competitor to beat him with.  He gets to pick first.

All in all, I think Cob has dealt himself a winning hand.  Should he give up pre-sale bitcoins to increase the loyalty of our members from 35 to 45?  Will his competitor team with Apple while he keeps an unwise promise not to dilute?

Leave that hand for his struggling competitors to play.

 

[amencon]

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.

Isn't it safe to assume that at least a large portion of whatever is used to purchase pre-sale shares will be liquidated into a form that is spendable (at this point USD or maybe BTC to some degree)?  Based on this assumption what is the difference between selling your BTSX or bitUSD for BTC and directly purchasing shares with BTSX or bitUSD and having peertracks sell it for marketing and development use?

Hopefully the developers would endeavor to pay as many expenses  as possible using BitUSD instead of converting to BTC or fiat, and this should become increasingly easy, quite possibly before a significant amount of the development funds have been used.

One hand washes the other.

Hmm I agree that would be ideal, however realistically how many resources that peertracks will need to purchase are available in bitUSD?  It feels to me like we are months or years away from gaining appreciable bitUSD adoption and I think a majority of the costs borne by peertracks will come shortly after IPO.

Maybe I'm just being pessimistic or I'm not aware of current vendor, suppliers or services already accepting bitUSD.  I support them accepting bitUSD regardless, however I just don't think it'll matter much in the long run considering the IPO will be short and coming soon.

[onceuponatime]

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.

Isn't it safe to assume that at least a large portion of whatever is used to purchase pre-sale shares will be liquidated into a form that is spendable (at this point USD or maybe BTC to some degree)?  Based on this assumption what is the difference between selling your BTSX or bitUSD for BTC and directly purchasing shares with BTSX or bitUSD and having peertracks sell it for marketing and development use?

Hopefully the developers would endeavor to pay as many expenses  as possible using BitUSD instead of converting to BTC or fiat, and this should become increasingly easy, quite possibly before a significant amount of the development funds have been used.

One hand washes the other.

[amencon]

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.

Isn't it safe to assume that at least a large portion of whatever is used to purchase pre-sale shares will be liquidated into a form that is spendable (at this point USD or maybe BTC to some degree)?  Based on this assumption what is the difference between selling your BTSX or bitUSD for BTC and directly purchasing shares with BTSX or bitUSD and having peertracks sell it for marketing and development use?

[muse-umum]

cob,

Thank you for your efforts. You know our concerns.

Here are my suggestions:

1. To have two kinds of delegates.  The normal delegates like the ones we have in BTSX, and the delegates who are going to launch projects (dilute, the so called business delegates).

2. The pay fee per block for the normal ones can’t be more than 2*average.

3. Only after getting at least X% ( X= 50 or 30...) of all the votes should a business delegate be able to produce blocks.  He should burn Y * pay fee per block (Y = 100 or 300…..) to register.

4. The total number of all the active delegates is 101. The number of active business delegates can’t be more than Z (Z= 10 or 5…).

5. Set upper bound for the inflation. Suppose initial supply of Notes is 2 billion, 35% are allocated to PTS holders, 35% are allocated to AGS holders, which means 700 million for each.  Then the upper bound of Notes that all the delegates can get paid together is 5 billion, which means P/A holders eventually are allocated by at least 10% of all the supply (2 + 5 = 7 billion). Each year at most A% (A = 5, or 10) of 5 billion Notes can be produced by delegates.

[Overthetop]

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.

Delegates could dilute, but there would be a cap and it would be no where near as inflationary and potentially problem causing as before. ... 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.

I think the new proposal is a good balance.
 

[onceuponatime]

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

[arhag]

Developers can allocate the remaining 80% however they think will allow them to outmaneuver their competition.
...
This will take a Big War Chest.
Let's not make the assumption that accumulating any amount of resources is too much.

Hmm, so this is an interesting question for you. What do you think the balance is between pleasing AGS/PTS holders and raising funds by IPO (basically what is the ideal value of x in my previous post)? On one hand, pleasing AGS/PTS holders gives the DAC a strong initial community support which can pay off in terms of marketing. On the other hand, more capital can be used to fund development, legal costs, and also marketing. Furthermore, an IPO buys you a great community of initial supporters as well, and in fact, I would argue it is better support (stronger hands) than AGS/PTS holders because they are self-selected during the IPO. Should x = 0? I'm not being facetious, I'm genuinely wondering what the ideal distribution is for an economically rational (not altruistic) DAC creator.

That brings up another point: getting the blessing and support of I3 is a huge deal (especially in these early stages) and allocating the minimum 10% to AGS/PTS is a way of getting that, but what exactly is I3's gain in providing support to third-parties who do this, considering the fact that I3 is not holding a huge stake of AGS and PTS? Actually is that even correct? I know you guys converted BTC to BTSX, but are you still holding huge amounts of PTS, and if so, what is the advantage of doing that rather than dumping it for more BTSX and then optionally buying stake in only the interesting DACs through the IPO just like everyone else.

[amencon]

Ah! I see where the confusion may lie.
You seem to think there is a link between third party developers and PTS/AGS.
PTS and AGS were a way to donate to invictus innovations, now called BitShares. Whatever money was sent to them was to make a bitshares toolkit.
BitShares is not launching ANY products. They are merely developers writing software for corporations to launch.
Corporations can use their software under 1 condition and 1 condition only. You allocate 10% of whatever you launch to PTS holders and 10% to AGS. No other strings attached.
Somehow you seem to think Cédric Cobban and Eddie Corral received funds from AGS or PTS.

Well said. Personally, I was even fine with the 10% to AGS, 10% to PTS model. What I wasn't fine with was a small group of founders owning such a large share of the equity in the beginning of the DAC. I think 10% to the BitShares Music Foundation, x% to AGS, x% to PTS, and the rest (90 - 2*x)% for a pre-sale/IPO is great. Obviously, x >= 10, but I am not sure what the best number should be. It depends on what are people's initial valuation of the DAC, and what the expected expenses will be for development/marketing/legal for the DAC and supporting infrastructure (PeerTracks) during the early initial growth phase. For later phases, and for unexpected expenses that can turbocharge growth, a dilution mechanism, if necessary, will work well.

Whatever specific allocation you guys decide on, you need to provide justification for it. And kicking the can down the road by saying inflation will solve all of the funding needs doesn't help. People need to have some estimation of the inflation they can expect when deciding how to initially values NOTES at launch. We need to see a more detailed business plan (the posted whitepaper is not enough) explaining what exactly provides value to NOTES and how you intend to do it. We need some estimation of the expected costs (development, business relations, marketing, legal, etc.) needed to create an ecosystem that is large enough that it can sustain itself off profit or even some light dilution if necessary for strategic expenses. I think if people had a much better idea of what the grand vision is, the economics of the system that make the DAC profitable, the unique risks involved, and how expensive it really is to achieve all of this, they would be less likely to complain about not getting their 45%. Uncertainty is only going to hurt the public image of this project and also likely result in a lower initial market cap / IPO funding.

Agreed as well.  As a PTS and AGS holder I'm prefectly happy with 35%/35% but would even accept appreciably less if there was good justification to go along with it.