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Offline tonyk

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Self-Sustained User Issued Asset – ‘New User Worth’
« on: October 04, 2014, 01:07:03 AM »

If the theory in the OP of this thread https://bitsharestalk.org/index.php?topic=9603.0
 holds true, And I believe it does.

A company called UsersUnlimited II , creates a user issued asset called ‘New user worth’   
-This asset is actually a fund that distributes some of its gains to the ‘‘How much is a new user worth?” described in the link above

-‘New user worth’   actually shorts bitUSD using significant part (starting at close to 2/3) of all proceeds received through the sale (issuance) of its shares. With the rest 1/3 it buys bitUSD and uses those bitUSD to fund the cash-back bonuses (costumer acquisition bonuses) of the ‘How much is a new user worth?”

-If the theory that 1 dollar spent on costumer acquisition bonuses in the ‘How much is a new user worth?” is near the numbers expected, the climb in the price of BTSX and the consequent gains from the short position will allow the fund to make the distribution/donations to the  ‘How much is a new user worth’ and when this marketing campaign is over to actually return more BTSX to the ‘New user worth’ shareholders (to say nothing that those  BTSX will be worth many times more than when initially invested). 

Thoughts ….on my Perpetuum mobile?
« Last Edit: October 04, 2014, 01:12:44 AM by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline gamey

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Re: Self-Sustained User Issued Asset – ‘New User Worth’
« Reply #1 on: October 04, 2014, 01:24:50 AM »

I stay out of these market discussions because it isn't my thing but that sounds pretty genius to me.  There has to be some variant after tweaking it etc.  Need to find a trusted person to run it, etc.

Edit - How would you do price discovery ? 
I speak for myself and only myself.

Offline bitmeat

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Re: Self-Sustained User Issued Asset – ‘New User Worth’
« Reply #2 on: October 04, 2014, 01:24:57 AM »
This is the future agree. Just like most people have a blog. Most people could have a crypto.

Getting a student loan could mean a contract in which someone buys your shares up. But then takes a chunk of your income.

Offline gamey

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Re: Self-Sustained User Issued Asset – ‘New User Worth’
« Reply #3 on: October 04, 2014, 01:33:09 AM »

The problem is you need a lot of money to get something like that off the ground.  It would be hard to imagine enough people believing in it enough to fund the asset at the level required.
I speak for myself and only myself.

Offline tonyk

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Re: Self-Sustained User Issued Asset – ‘New User Worth’
« Reply #4 on: October 04, 2014, 01:38:02 AM »

I stay out of these market discussions because it isn't my thing but that sounds pretty genius to me.  There has to be some variant after tweaking it etc.  Need to find a trusted person to run it, etc.

Edit - How would you do price discovery ?

DacsUsersUnlimited II sounds trustworthy enough to me.  :)



The problem is you need a lot of money to get something like that off the ground.  It would be hard to imagine enough people believing in it enough to fund the asset at the level required.

Let's try and see if we can get 1-5% of total BTSX supply initially. I find this aim doable... if not we can threaten them with the alternative  :) ... 'dilution'
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline onceuponatime

Re: Self-Sustained User Issued Asset – ‘New User Worth’
« Reply #5 on: October 04, 2014, 01:48:15 AM »

I stay out of these market discussions because it isn't my thing but that sounds pretty genius to me.  There has to be some variant after tweaking it etc.  Need to find a trusted person to run it, etc.

Edit - How would you do price discovery ?



DacsUsersUnlimited II sounds trustworthy enough to me.  :)



The problem is you need a lot of money to get something like that off the ground.  It would be hard to imagine enough people believing in it enough to fund the asset at the level required.

Let's try and see if we can get 1-5% of total BTSX supply initially. I find this aim doable... if not we can threaten them with the alternative  :) ... 'dilution'

Any estimate of how much btsx the fund would need to be viable?

Would funds be returned if minimums are not met (within a reasonable time - say 1 month)?
« Last Edit: October 04, 2014, 01:50:31 AM by onceuponatime »

Offline tonyk

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Re: Self-Sustained User Issued Asset – ‘New User Worth’
« Reply #6 on: October 04, 2014, 02:05:55 AM »

Edit - How would you do price discovery ?

I do not know what exactly do you mean but let me add to the OP idea.

Shares of the fund are prices in bitUSD. New ones are issued @ 'Current value'

'Current value' is = bitUSD holdings + #BTSX in position of the fund / current feed price - D
*D is expected donation in the next n days (n=30 days for example).
This formula is grossly underestimating the true future value of the fund, most of the time.
.....

How about this slight improvement. The new customer is give a choice - $100/$200 right now or $125/$250 in the growth fund  ‘New user worth’


Quote

Any estimate of how much btsx the fund would need to be viable?

Would funds be returned if minimums are not met (within a reasonable time - say 1 month)?

I believe 5% initially (5%of the total BTSX supply will be great). Even with 1% worth trying, IMHO.
We should give the idea a chance for about 9mo before declaring it not working, imo.
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline tonyk

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Re: Self-Sustained User Issued Asset – ‘New User Worth’
« Reply #7 on: October 04, 2014, 04:24:15 AM »

Here is the plan for action:



- BM, Agent86, arhag, drltc,  plus anybody else qualified/willing work out/smooth the inner working of the fund.

- UsersUnlimited II  announces that they will be the one staying behind it (are being the issuer).

- However is in charge of the AGS fund (Dan, Stan... whoever) announces that they will contribute 5% of the AGS to the fund/buy the first shares.

- We announce how the fund works and that in order to be successful the fund will need to start with at least 5% of the total BTSX supply, so everybody is 'encouraged' to donate at least 3% of his/her BTS holdings.

- svk includes a new field to the blockexplorer - "Biggest/All non participating Accounts"

- If it does not go smoothly (i.e. the 5% is not reached) - tonyk comes and explains in not so kind words how unwise the non participation is.

- If the point above does not work for,let say 7 days... BM comes and says that due to low participation we will have to go to plan B, and dilute everybody's share 20%.

-If the force threats above do not work... we really go to plan B and do what we have promised.... 'dilution' far exceeding the recommended donation %....
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline gamey

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Re: Self-Sustained User Issued Asset – ‘New User Worth’
« Reply #8 on: October 04, 2014, 04:30:40 AM »


The problem is the free-riders etc. "Group trap" is I believe what I've seen it called.  You're relying on a few active people to make a sub-optimal bet to help everyone else.  They could just make the bet otherwise.  Sigh.  I'd be willing to give to such a thing, but I really don't have that much BTSX and I know of all the people who won't invest either. 

This is what it all goes back to.. and why inflation is actually more fair.  I remember these arguments now :(
I speak for myself and only myself.

Offline tonyk

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Re: Self-Sustained User Issued Asset – ‘New User Worth’
« Reply #9 on: October 04, 2014, 04:39:59 AM »


The problem is the free-riders etc. "Group trap" is I believe what I've seen it called.  You're relying on a few active people to make a sub-optimal bet to help everyone else.  They could just make the bet otherwise.  Sigh.  I'd be willing to give to such a thing, but I really don't have that much BTSX and I know of all the people who won't invest either. 

This is what it all goes back to.. and why inflation is actually more fair.  I remember these arguments now :(

Actually the beauty of my decision is that the participants in the fund actually benefit more than the free riders!!!
Free riders just get their free BTSX appreciation. Participants in the fund get 80% more*

*1.assuming free riders just hold BTSX during that period and do not go short bitUSD
2. Assuming 10x return on this marketing effort (i.e. 1$ spent during this campaign results in 10x BTSX market cap increase....which believe it or not is on the conservative side)


PS
Yee, I do believe I am either an idiot or a genius or maybe both... But definitely nothing in between  :)
« Last Edit: October 04, 2014, 04:43:36 AM by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline arhag

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Re: Self-Sustained User Issued Asset – ‘New User Worth’
« Reply #10 on: October 04, 2014, 06:05:35 AM »
Edit: Gamey already pointed this out above. But I'll explain in more detail.

The fund in your proposal gets no advantage in the BitUSD short compared to anyone else who wants to short BitUSD. It is not economically rational for people donating to the "new user fund" to let the middleman short on their behalf (and take a 33% cut to pay for a marketing program) when they can just cut out the middleman and short BitUSD themselves. Of course there are other reasons why someone would put money into the "new user fund" rather than shorting themselves: to provide the revenue for the marketing program that will grow the value of BTSX. But then they can just avoid the unnecessary complication and donate the 33% portion directly to the fund paying for the marketing program, and keep the rest of the money and short BitUSD themselves. But then that is where the free rider problem comes in, they are donating to the marketing fund but the benefits of the increasing USD price of BTSX is spread to everyone (BTSX holders and more so BitUSD shorts) even if they didn't donate to the fund. The only way to solve this group trap is to force all BTSX holders to pay for the fund (through inflation or at the very least lower potential deflation) because they are the ones who are necessarily going to benefit from the marketing program (the marketing program is designed to increase the value of BTSX).

« Last Edit: October 04, 2014, 06:09:30 AM by arhag »

Offline tonyk

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Re: Self-Sustained User Issued Asset – ‘New User Worth’
« Reply #11 on: October 04, 2014, 06:23:35 AM »
Edit: Gamey already pointed this out above. But I'll explain in more detail.

The fund in your proposal gets no advantage in the BitUSD short compared to anyone else who wants to short BitUSD. It is not economically rational for people donating to the "new user fund" to let the middleman short on their behalf (and take a 33% cut to pay for a marketing program) when they can just cut out the middleman and short BitUSD themselves. Of course there are other reasons why someone would put money into the "new user fund" rather than shorting themselves: to provide the revenue for the marketing program that will grow the value of BTSX. But then they can just avoid the unnecessary complication and donate the 33% portion directly to the fund paying for the marketing program, and keep the rest of the money and short BitUSD themselves. But then that is where the free rider problem comes in, they are donating to the marketing fund but the benefits of the increasing USD price of BTSX is spread to everyone (BTSX holders and more so BitUSD shorts) even if they didn't donate to the fund. The only way to solve this group trap is to force all BTSX holders to pay for the fund (through inflation or at the very least lower potential deflation) because they are the ones who are necessarily going to benefit from the marketing program (the marketing program is designed to increase the value of BTSX).

You are, incorrectly in my mind, assuming that everybody will do the rational thing and short bitUSD themselves. I do believe 70% of the people will sleep better if they have invested 10% of their money in the 'marketing fund' and left the 'experts' do the truly 'counter intuitive thing' of profiting from something when the price of said thing falls...
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline Shentist

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Re: Self-Sustained User Issued Asset – ‘New User Worth’
« Reply #12 on: October 04, 2014, 06:48:35 AM »
i like the idea

i proposed something similar without the marketing fund https://bitsharestalk.org/index.php?topic=9603.msg125010#msg125010

maybe Bytemaster could sweeten the marketing fund with integrated referral program.

1. every account the fund or any user "aquires" you get a cut of the fees for the life time
2. the fund will be executed on the short wall first

maybe in the fund the multisig possibility with BTSX should be activated.

-so the fund could expect 2 sources of income - 1. win from the short position 2. a cut of the fees
- would be great to see it as the first asset on the BTSX exchange with a business model

p.s.
maybe the inactivity fees can flow in this fund
« Last Edit: October 04, 2014, 06:50:08 AM by Shentist »

drekrob

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Re: Self-Sustained User Issued Asset – ‘New User Worth’
« Reply #13 on: October 04, 2014, 09:35:56 AM »
Quote
the fund will need to start with at least 5% of the total BTSX supply, so everybody is 'encouraged' to donate at least 3% of his/her BTS holdings
So some portion of BTSX holders donates 3% and it averages out to 5% of the complete stack? Using this kind of math I am sure it should be no problem to acquire some funds.

Offline tonyk

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Re: Self-Sustained User Issued Asset – ‘New User Worth’
« Reply #14 on: October 05, 2014, 01:23:03 AM »
Next day bump.

Why this will not work posts, encouraged!
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

 

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