I wonder whether the business model of BTS absolutely
depends on more than just BitAssets. Again, its just a view I'm currently forming that I am open to changing if others show it is inaccurate.
In essence, BitAssets seem very capital intensive for BTS holders to support, and therefore on their own will generate very low return to BTS holders.
Imagine BitAssets were orders of magnitude larger in market cap, maybe billions of dollars. Now how much could BTS earn in transaction fees from this? I think that comes down to how much transaction fee leakage users are willing to bear for using bitAssets. What could that be? I am currently thinking no more than a few percent per annum loss in transaction fees, but that's simply a guess. And remember that in an ideal world, we should be seeking to lower the transaction fees for users to reduce unnecessary frictions and improve their experience as much as possible.
Now you need to take that (say 3%x BitAsset market cap) and spread it over a BTS capital base that is at least 3x as large, due to the minimum requirements of the collateral pool. That leaves BTS holders with 1% or less annual income on the value of their BTS holdings. If that's the only revenue source, nobody would want to hold BTS for that maximum income level in my view, and that would lower the value of BTS, force it out of the collateral pool, and in turn collapse the market caps of the bitAssets. Therefore it is essential to develop these other BTS services that people are willing to pay BTS holders a higher return for.
If this is right (?), we should be treating bitAssets as the oil in the economic engine to drive users into a range of value-add services that are less capital intensive. So this model depends on a network effect, but critically must expand to the development of higher value services.
It is lazy thinking to believe that bitAsset growth alone will drive up the valuation of BTS. I believe that there is no market dynamic that supports this ...see thread I started here
https://bitsharestalk.org/index.php?topic=10690.0, and transaction fee income is not supportive to drive it either. Its possible greater fools in any market could keep bidding up for a long time, but unless a higher valuation is then justified by new and valuable services, it won't last.
Therefore we need to be thinking about what
really will drive the long term capital value of BTS.
Edit: Something that may help BTS holders to earn more from bitAssets offering is to charge a percentage of the bitAsset yield. Users may be more likely to accept this because they see it as a reduction in profit rather than a cost.