Author [EN] [ZH] [ES] [PT] [IT] [DE] [FR] [NL] [TR] [SR] [AR] [RU] [EN] [ZH] [ES] [PT] [IT] [DE] [FR] [NL] [TR] [SR] [AR] [RU] [EN] [ZH] [ES] [PT] [IT] [DE] [FR] [NL] [TR] [SR] [AR] [RU] Topic: Marketing Fund to Subsidize BitUSD / BitBTC yield?  (Read 1117 times)

0 Members and 1 Guest are viewing this topic.

Offline bytemaster

Marketing Fund to Subsidize BitUSD / BitBTC yield?
« on: October 01, 2014, 01:11:44 PM »

I have been thinking that a good way to bootstrap interest in BitUSD is to have the yield subsidized.   A kind of promotion to encourage people to try it out.   

We also need an honest way to account for "projected yield" but I don't know how to do that because there are too many variables:

1) trade volume could increase generating increased fees and higher yield
2) USD supply could increase decreasing average yield
3) USD supply could decrease increasing average yield
4) an unknown percent of USD never claims yield (turn over, short holding period)

Without knowing all of these things it is impossible to predict exactly the yield in BitUSD..
For the latest updates checkout my blog: http://bytemaster.bitshares.org
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 santaclause102

  • Hero Member
  • *****
  • Posts: 2487
    • View Profile
Re: Marketing Fund to Subsidize BitUSD / BitBTC yield?
« Reply #1 on: October 01, 2014, 01:26:01 PM »
Do you mean that AGS funds would be used to guarantee a min. yield?

Offline arhag

  • Hero Member
  • *****
  • Posts: 1213
    • View Profile
    • My posts on Steem
  • BTS: arhag
  • GitHub: arhag
Re: Marketing Fund to Subsidize BitUSD / BitBTC yield?
« Reply #2 on: October 01, 2014, 01:37:32 PM »
I only support this if we first have ways of prioritizing which BitAsset yields we care about, what the yield caps for each should be, AND an ability to convert the value from fees from one BitAsset that we don't care to subsidize into BitAsset yields for the BitAsset we do care to subsidize (e.g. convert BitBTC market fees in excess of its 1% yield into BitUSD to top off the 5% BitUSD yield). Otherwise, I would hate to see BTSX inflation go towards BitAsset yields haphazardly (e.g. stupidity like 5% yield to all BitAssets). Or did you mean doing all of this manually by having the delegates purchase and burn BitAssets with their inflated BTSX stake rather than having the DAC automatically manage it?

Also, can we just use a simple linear yield (who cares if people want to spend transaction fees for compounding) so that the accounting is simpler (although I think drltc has a more complex solution that could allow for continuous compounding interest)? Meaning BitUSD funds in the reserve fund can be moved into a yield fund every block by an amount equal to a variable percentage of issued BitUSD (all except the ones in the reserve and yield funds) at the time of the block. Then the variable percentage is accumulated over each block and that sum is known for any given block. Then a transaction being moved simply requires adding a percent yield on the balance (and deducting the corresponding amount from the yield fund) where that percentage is calculated as the difference between the sum at the current block at which it is being moved and the sum at the block in which the transaction was created. This way the yield on all BitAsset balances increases monotonically. The per block percentage would of course still be variable because of all the unknowns you mentioned. However, if you really want to subsidize it to some fixed percentage, you could make sure there was enough BitAssets in the reserve fund to be able to pull out the same targeted per block percentage by first keeping considerable padding (which could also act as a black swan fund) and making up for deficiencies in refilling that fund from bid-ask overlap and BitAsset tx fees by simply buying the BitAsset on the open market with the inflated BTSX.
« Last Edit: October 01, 2014, 01:55:34 PM by arhag »

Offline santaclause102

  • Hero Member
  • *****
  • Posts: 2487
    • View Profile
Re: Marketing Fund to Subsidize BitUSD / BitBTC yield?
« Reply #3 on: October 01, 2014, 01:46:30 PM »
I like the intention to have something fixed yield savers can rely on.

But I would say this (if my question in the previous post can be answered with yes):
1) The problem is not that the yield is too low. Problem is more that the system is too new and people that ask for FIXED yields normally are conservative and would either
a) Want to understand the system fully (difficult but maybe possible with a lot of good analogies and without exaggerated future outlooks / promises which just create resistance and doubt) or
b) Want some authority they trust to "confirm" that it is safe. Those sources of trust are: "scientists", banks, big companies / merchants accepting bitusd, marketers they trust (not saying that this should be so, it is just my observation; for many ppl trust in an institution correlates with TV time and size).
2) Yield could be stated as "*average yield of the last month extrapolated to one year*.
3) People might say: "They have to subsidize their yield because there really is non"
Subsidized yields might also disguise the actual nature of the real yield.

I personally trust things when I can see trough them and when things are presented to me as they are. The yield could be best described by "trading fee yields". This makes sense to everyone and does not generate the "this must be a scam, they have more interest on USD than established banks and they created the usd from nothing" response.

But there are two sides to every coin... So the question is: How much yield per year would we have at current trading volume?  Is the height or the unpredictability of the yield the problem?

Offline CLains

  • Hero Member
  • *****
  • Posts: 2606
    • View Profile
  • BTS: clains
Re: Marketing Fund to Subsidize BitUSD / BitBTC yield?
« Reply #4 on: October 01, 2014, 03:30:34 PM »
We simply inflate BTSX 5% the first 12-18 months, then we get a stable 10%+ return on bitAssets, as they require 2x BTSX as collateral. If we hover around 100 million market cap, this is the same as spending 5 million dollars to market bitAssets. 5% a year inflation is a trifle in this space that only a complete moron would cry about - 10x increase would be imminent if we include the proposal in a global marketing campaign.

Offline Empirical1.1

  • Hero Member
  • *****
  • Posts: 886
    • View Profile
Re: Marketing Fund to Subsidize BitUSD / BitBTC yield?
« Reply #5 on: October 01, 2014, 03:56:54 PM »
We simply inflate BTSX 5% the first 12-18 months, then we get a stable 10%+ return on bitAssets, as they require 2x BTSX as collateral. If we hover around 100 million market cap, this is the same as spending 5 million dollars to market bitAssets. 5% a year inflation is a trifle in this space that only a complete moron would cry about - 10x increase would be imminent if we include the proposal in a global marketing campaign.

Then I sir, am proud to be a complete moron.

Offline sschechter

  • Sr. Member
  • ****
  • Posts: 379
    • View Profile
Re: Marketing Fund to Subsidize BitUSD / BitBTC yield?
« Reply #6 on: October 01, 2014, 04:06:45 PM »
So we pay people to achieve a certain yield in hopes of driving up the volume until we actually achieve that yield?  A training wheel of sorts?  What happens when the promotion period ends and we don't hit our goal?  What if yield drops to 3%, or back even to 1.5%.  That would make it look worse than now, and the returns artificial.  People did not like the idea of  +5% because it sounded too good to be true and a Ponzi scheme.  What will we be called when we just pay you an arbitrary rate of interest to use our product?  NuBits? I do not like this proposal. There has to be a better way than this.  This proposal is to marketing what prostitution is to dating.
BTSX: sschechter
PTS: PvBUyPrDRkJLVXZfvWjdudRtQgv1Fcy5Qe

Offline CLains

  • Hero Member
  • *****
  • Posts: 2606
    • View Profile
  • BTS: clains
Re: Marketing Fund to Subsidize BitUSD / BitBTC yield?
« Reply #7 on: October 01, 2014, 04:18:35 PM »
We simply inflate BTSX 5% the first 12-18 months, then we get a stable 10%+ return on bitAssets, as they require 2x BTSX as collateral. If we hover around 100 million market cap, this is the same as spending 5 million dollars to market bitAssets. 5% a year inflation is a trifle in this space that only a complete moron would cry about - 10x increase would be imminent if we include the proposal in a global marketing campaign.

Then I sir, am proud to be a complete moron.

I guess it is the other way around, really. The solution of simply giving away money to new customers is too stupid, too retarded to be entertained seriously by the merely intelligent. It takes a special kind of moron to see it.  :D

Offline Empirical1.1

  • Hero Member
  • *****
  • Posts: 886
    • View Profile
Re: Marketing Fund to Subsidize BitUSD / BitBTC yield?
« Reply #8 on: October 01, 2014, 04:34:02 PM »
We simply inflate BTSX 5% the first 12-18 months, then we get a stable 10%+ return on bitAssets, as they require 2x BTSX as collateral. If we hover around 100 million market cap, this is the same as spending 5 million dollars to market bitAssets. 5% a year inflation is a trifle in this space that only a complete moron would cry about - 10x increase would be imminent if we include the proposal in a global marketing campaign.

Then I sir, am proud to be a complete moron.

I guess it is the other way around, really. The solution of simply giving away money to new customers is too stupid, too retarded to be entertained seriously by the merely intelligent. It takes a special kind of moron to see it.  :D

I'm an advocate of maximising the yield & BitAsset demand in every conceivable way possible, even taking burned BTSX fees and giving them to BitYield and also making long term shorts compete on interest. And ELI5 explaining the trade where you short and take the other side of your trade to maximise your interest.  I am ALL ABOUT maximising BitAsset demand.

Inflation though will kill BTSX and will probably kill BitShares imo. Even the inflation in Bitcoin is only acceptable because it is part of a pre-defined system, if Bitcoin changed it's inflation model, even by current shareholder consensus it's value would crater imo. 

Edit: The reason is the amount of certainty investors need about their future equity in DACs & systems that currently have no legal recourse is insanely high. You hear 'forking' being thrown around a lot, but it's not really an option for the independent investor if the developer block supports another option. So their best protection is investing in a pretty iron-clad inflation system and also ones where the initial developers have enough stake to be motivated & influence but not enough to control the DAC. (Unfortunately in practice voter apathy makes that amount in question quite low.) Without that high degree of certainty investment would crater imo.

If I wasn't so heavily invested in BTSX, I'd actually encourage it just to demonstrate the point. Like if NXT cloned BitAssets and said,  'I have a great idea, let's inflate our share supply by 5% to give out yield on NXT-BitAssets', I would literally egg them on and tell them what a genius idea it was just so I could eliminate the competition.

I could be wrong though, we can try start a thread on Bitcointalk - 'BitShares inflating BTSX supply by 5% to pay great yield on BitAssets!' and see if we get a hugely positive response.

Edit: I think the fault is people are comparing DAC's to systems that work in Bricks and Mortar companies. In Bricks & Mortar companies you can give founders or a few shareholders large percentages and probably use inflation a lot more routinely as though flawed there are laws and regulations in place around them. With DAC's shareholding needs to be more decentralised with a pretty iron-clad pre-defined system of inflation or lack thereof. Once DAC's are more established and the systems around them more familiar that may change, but right now this is all kryptonite imo. Though perhaps there's a test case not as critical as BTSX it could be tested on?

Edit: One more part of my thought process, though I might not be articulating it well...

Looking at Bitcoin. I think third party DAC's that sit on top of & interact with Bitcoin may be able to get away with messing with inflation by consensus if they are properly decentralised & established, but I don't think Bitcoin could.  (Decreasing its' inflation might be possible, especially as the current model is so atrocious- but just the notion that it's supply structure could be changed at any time - would risk the faith and certainty that it could be trusted as a long term foundation and base of an ecosystem.)   

If the World Gold Council decided that by turning limestone into gold and increasing the supply this year, they could maximise Jewellery sales, while decided by consensus and perhaps even short term positive (unlikely) it would destroy the notion & value of gold as a base for an entire ecosystem revolving around it. (If any human group could change its supply, even by consensus.)

I don't think you can make the share supply more than 2 billion BTSX even by consensus without destroying BTSX's long term potential to be a base of a decentralised banking & BitAsset ecosystem, which I believe is our goal. 
« Last Edit: October 01, 2014, 07:04:23 PM by Empirical1.1 »

Offline theoretical

Re: Marketing Fund to Subsidize BitUSD / BitBTC yield?
« Reply #9 on: October 01, 2014, 05:25:08 PM »

I agree that supercharging BitAsset yield is a great way to boost demand for our product and help us market it.

I'd suggest simply making the shorts pay interest -- that was the original plan!

If I read this correctly, you're talking about some form of dilution, or massive infusion of I3 funds, merely to boost BitUSD yield.

We haven't even tried making shorts pay interest.

And lots of the BitUSD in the yield fund's current implementation is actually untouchable -- it'll never be paid out, due to the way the yield fund implemented!
BTS- theoretical / PTS- PZxpdC8RqWsdU3pVJeobZY7JFKVPfNpy5z / BTC- 1NfGejohzoVGffAD1CnCRgo9vApjCU2viY / the delegate formerly known as drltc / Nothing said on these forums is intended to be legally binding / All opinions are my own unless otherwise noted / Take action due to my posts at your own risk

Offline sschechter

  • Sr. Member
  • ****
  • Posts: 379
    • View Profile
Re: Marketing Fund to Subsidize BitUSD / BitBTC yield?
« Reply #10 on: October 01, 2014, 05:30:35 PM »
We simply inflate BTSX 5% the first 12-18 months, then we get a stable 10%+ return on bitAssets, as they require 2x BTSX as collateral. If we hover around 100 million market cap, this is the same as spending 5 million dollars to market bitAssets. 5% a year inflation is a trifle in this space that only a complete moron would cry about - 10x increase would be imminent if we include the proposal in a global marketing campaign.

This is your opinion and pure speculation. You cannot guarantee a 10x increase.  You cannot even guarantee a 5% increase.  You also cannot guarantee that arbitrarily inflating the share supply to appease rent seekers will not chase serious investors away, invite bad press, etc.  Marketing funds should be for marketing, not bribing.
BTSX: sschechter
PTS: PvBUyPrDRkJLVXZfvWjdudRtQgv1Fcy5Qe

Offline Ander

  • Hero Member
  • *****
  • Posts: 3507
    • View Profile
  • BTS: Ander
Re: Marketing Fund to Subsidize BitUSD / BitBTC yield?
« Reply #11 on: October 01, 2014, 05:44:39 PM »
I don't think we should do this, because it looks kindof like a ponzi scheme.  (Its actually kindof a reverse ponzi, using funds from original investors to pay new investors?)  I think people will just see "they are using investment funds to pay higher interest" and think "ponzi", and then not investigate further.


We should work on increasing demand for bitAssets by fixing the bugs that are preventing people from using them, improving the user experience, making it less complicated/educating people, and finding partners who want to accept bitUSD, thus increasing the demand. 

Paying extra interest out of funds that were invested into BTSX is not sustainable, it is not a free market solution.  The yield on bitUSD should represent real profits, being paid to holders.  It should not be artificially inflated through the dilution of BTSX, which would simply make bitUSD buyers wonder when the bonus interest is going to be cut off, at which point they will dump.
https://metaexchange.info | Bitcoin<->Altcoin exchange | Instant | Safe | Low spreads

Offline theoretical

Re: Marketing Fund to Subsidize BitUSD / BitBTC yield?
« Reply #12 on: October 01, 2014, 05:47:46 PM »
We also need an honest way to account for "projected yield" but I don't know how to do that because there are too many variables:

BitUSD that comes in from yield -- fees, short interest, whatever -- should go into a buffer fund.

Every block, some tiny percentage of the buffer fund goes into the "accrued yield fund."  Thus, with no future network income, the buffer fund would decay exponentially with some predictable half-life we can set.  Let's set it to one month.

A distribution event from the accrued yield fund will occur when the accrued yield fund has accumulated to 0.01% of the eligible BitUSD.  Eligible BitUSD are those that haven't moved since the last distribution event.  Iterating through every immobile BitUSD balance is a technical issue with this approach, but we can avoid it with a clever implementation [1].

Transparently showing projected yield can be based on the buffer fund's income.  You can also show a single APY number for the income in a year based on the assumption that the buffer fund's income on future days will be equal to its average per-day income over the last 30 days.  Then also show the range of what will happen if the income goes up or down by one standard deviation.

You could even show a graph of what the APY over time will be if the current funding level continues, if the income goes up or down one standard deviation, if the income doubles, halves, or goes to zero.

[1] We don't want to iterate through every immobile BitUSD balance on every distribution event.  So instead we merely record the block number at which the distribution event occurred, and move the 0.01% to a third fund, the distribution fund.  Then whenever a BitUSD balance requests its yield, you check how many distribution events occurred since it last moved (minus one, since it wasn't eligible for the first distribution event).  Then pay from the distribution fund 0.01% times the amount of BitUSD times the number of distribution events.

Besides solving the technical problem, this implementation also provides honest accounting of untouchable BitUSD, which are currently very hard to figure out.  The distribution fund can be immediately claimed by longs at any time.  The accrued yield fund and buffer fund are untouchable right now -- but the longs are assured that BitUSD will move from them into the distribution fund, in a timely manner, according to a simple, predictable, transparent algorithm.

« Last Edit: October 01, 2014, 06:11:33 PM by drltc »
BTS- theoretical / PTS- PZxpdC8RqWsdU3pVJeobZY7JFKVPfNpy5z / BTC- 1NfGejohzoVGffAD1CnCRgo9vApjCU2viY / the delegate formerly known as drltc / Nothing said on these forums is intended to be legally binding / All opinions are my own unless otherwise noted / Take action due to my posts at your own risk

Offline Shentist

  • Board Moderator
  • Hero Member
  • *****
  • Posts: 1605
    • View Profile
    • metaexchange
  • BTS: shentist
Re: Marketing Fund to Subsidize BitUSD / BitBTC yield?
« Reply #13 on: October 01, 2014, 06:41:44 PM »
I have been thinking that a good way to bootstrap interest in BitUSD is to have the yield subsidized.   A kind of promotion to encourage people to try it out.   

We also need an honest way to account for "projected yield" but I don't know how to do that because there are too many variables:

1) trade volume could increase generating increased fees and higher yield
2) USD supply could increase decreasing average yield
3) USD supply could decrease increasing average yield
4) an unknown percent of USD never claims yield (turn over, short holding period)

Without knowing all of these things it is impossible to predict exactly the yield in BitUSD..

as much as i respect you bytemaster, but i think you are fighting the wrong battles at the moment.

sure it is to complicated, but the reason are your own rules.

i would do it as simple as possible

1. just pay yield daily to every bitUSD in existence
2. you could publishes average yield in past 3/6/12 month and expected yield 3 month

i am not a fan to pay different yields, makes it so much complicated

AND

you should seek a purpose of bitUSD, then everything will fall in place. At the moment the need of a stable crypto is not needed for traders or investors, so you need a group of people who want to solve a problem.

1. merchants - need stable currency

so, to talk to merchants to accept bitUSD is a tough way, but maybe we have a better solution. we should make bitUSD the needed currency in the bitshares ecosystem for paying everyone included.

1. pay your employees in bitUSD
2. pay your contractors in bitUSD
3. let the bitshares DNS, Votes, Music etc. integrate bitUSD payment from the start - as easy as possible
4. establish an easy way to convert USD in bitUSD - this will bring new money in the system

we need more purpose for bitUSD and everything else will follow

Offline mf-tzo

  • Hero Member
  • *****
  • Posts: 1665
    • View Profile
Re: Marketing Fund to Subsidize BitUSD / BitBTC yield?
« Reply #14 on: October 01, 2014, 06:55:39 PM »
Quote
1. pay your employees in bitUSD
2. pay your contractors in bitUSD
3. let the bitshares DNS, Votes, Music etc. integrate bitUSD payment from the start - as easy as possible
4. establish an easy way to convert USD in bitUSD - this will bring new money in the system

we need more purpose for bitUSD and everything else will follow

 Exactly! +5%

 

Google+