If the largest banks can achieve deposits of over $1 trillion dollars with no meaningful interest, how many deposits could BitShares attract and what would that mean for the value of the bank?
Road Map
1. Lower Forced settlement to 95%
2. 2% BTS per annum directed to BitUSD.
(With a yield subsidy many BTS Shareholders will yield harvest creating millions of BitUSD.)
3. Spend $200 a day incentivizing $100 000 of liquidity.
(For 0.2% interest per day many BTS Shareholders send a small portion of their BitUSD to a liquidity pool where it's sold for $1.01 and bought back at $0.99)
Customers can buy this BitUSD from a bridge for fiat/BTC and save/spend it from a basic account & don't need to understand/see the DEX...
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Mr. Man In Street Account
BitUSD Balance: $888 Buy BitUSD $1:01 Sell BitUSD $0.99
Current Yield: 4.6%
Buy/Sell with Bitcoin/Bank/Card via our trusted partners.
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Their new BTS (For BitUSD) demand raises the BTS price incentivizing more people to short, possibly with some of the dilution being directed their too. Shareholders/liquidity pool will buy from them to replenish their position.
The yield subsidy is key imo to achieving a better result faster and it's largely self funding https://bitsharestalk.org/index.php/topic,21641.0.html
(By the time the yield subsidy is removed, banks will be charging negative interest well below -1%. So no NIRP will make private, zero yield BitUSD seem like a treat.)
i like it, but what about making the solution more general and coded into the smartcoins --fees from each smartcoin exchange go to yield on those smartcoins. that way we're not picking a winner (letting the market decide) and the yield funding process is perpetually self-sustaining. picking any fixed dollar amount from the general pool runs the risk of being the wrong amount and potentially cannibalizes other worker projects that could be funded. it makes more sense to me for every smartcoin to have the potential for yield, the amount varying by popularity of that market.
That's a good idea for when Smartcoin adoption plateaus or reaches maturity because at that point it wouldn't make sense to direct a percentage of BTS to BitAsset yield because it wouldn't be offset by equal or greater demand for BTS and so we would be losing value by subsidizing yield.
However if you fail to direct a percentage of BTS to BitUSD/Other Yield now you may lose the SmartCoin race because...
All else being equal would you rather hold a BitUSD with good yield or a BitUSD with no yield? How much would it cost a competitor to offer yield? Nothing.
(For the duration that their SmartCoins in circulation were increasing annually by a greater amount than the cost of the yield.)
Example: Let's say competitor ABC is identical to BTS. They have a $12 million valuation and ABC is diluting by 2% a year or $20 000 a month and directing that to ABCUSD Yield. That would mean they are able to offer circa
on up to $5 million of ABCUSD.
All else being equal, most customers would presumably choose the crypto USD with yield. So the next $5 million of crypto USD demand will go to ABCUSD not BitUSD. This creates up to $5 million of ABC demand which more than offsets the $200 000 worth of annual ABC sell pressure. Until new ABC demand is less than the cost to ABC of subsidizing yield, they will grow in value and grow their ABCUSD. (As ABC grows in value the dollar amount of the % directed to yield will also increase allowing them to attract even more crypto USD demand. Also the % they will need to dilute at a higher valuation to fund development will be much lower than the % BTS needs to dilute to fund the same development.)
ABC as the market leader will then also bootstrap because merchants will see they have millions of ABCUSD with thousands of holders and merchants will want to sell their products and services for ABCUSD much the same way 100 000+ merchants accept BTC but a lot less accept other cryptos like BTS which currently serve a much smaller market. This will create a situation where all else is no longer equal. ABCUSD even without yield at that stage would be superior to BitUSD because it is the most established, known, popular and most importantly has
Utility. Therefore I believe you have to take this approach of giving some of that early demand back to the customer or you will lose to a competitor that does.
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(Edit: It was over 0.00001...)
