i am confused. on the obits.io website they state, that 0.2% or 100% of their tradingfees are going into buybacks, but with your statement this would put obits only to 50% or do i understand something wrong?

I've never read that info before, but I guess the info there should at least be clarified. Strictly speaking, in the section about trading fees, I guess it says 100% of the profits of OL for trading fees, which is 50% of the total trading fees. I am sure Ronny has publicly disclosed the 50/50 split with us several times in the past. It should also be noted I think that if Ronny didn't have BlockTrades doing this, he would have to pay someone to manage it, and those costs would come out of the profit from the trading fees anyways.

But I agree this page should probably be clarified to indicate there is a split of the trading fee revenue 50/50 between OL and BlockTrades acting as a gateway service provider. Please note that this split only applies to trading fees, BlockTrades does not participate in revenue sharing for other profit areas from OL (e.g. registration fees and other fees collected by OL).

So you generated more than 200K profit with 29K initial fund in half a year from the direct exchange service only? It's amazing. Although due to the mark-to-market account method, some reasons could be pumping of the coins which you're holding, I still think you did a good job. 

Maybe better to use a daily average of values of your assets in a period to value the shares? If as you mentioned "Majority of assets held in BTC", I think there would be no big difference to the result.

We could use a daily average of our assets, which would stabilize the numbers on a day-to-day basis, but the reality is that our assets are worth whatever they are worth on a given day, so averaging just masks the painful or happy reality of the current value :-) In general, as you guessed, the swings aren't too big, since our primary holdings are in BTC, but they do "matter". For example, in large part due to the rise of BTC in the past 2 days, we're up about 7K from the posted spreadsheet. Generally I believe that over time these swings just average out, and our long term profit is therefore from the convenience and safety offered by our site.

I should point out, that while we're very happy with the profits we've made from the cryptocurrency website so far, this isn't really where we've planned to make our long term profits. We've always felt that the largest profits will come with technology that acts as a better bridge between cryptocurrencies and fiat currencies. That said, we do plan to begin actively promoting the site before too long to the larger cryptocurrrency community, as it has been a good profit center.

By the way, would you like to pay for translating your offer and/or related documents into Chinese? I think @ebit would glad to help. China is a big market for your offer imo.

Yes, this sounds like a great idea, especially if he's willing to accept payment in some form of cryptocurrency, since that's what BlockTrades primarily deals in. Have him PM me if he's interested.

I've created this thread to disclose information about BlockTrades and the public offering we're planning. Because of security laws, please note that this offering is NOT available to US and Cayman Islands citizens and residents.

Overview of BlockTrades
BlockTrades was formed to take advantage of opportunities created by the recent rise of cryptocurrency  technologies. BlockTrades takes a three-pronged approach to revenue generation:

1) Direct sales to consumers of cryptocurrency and cryptocurrency services
2) Licensing of commercial off-the-shelf and customizable software products
3) Contract-based development of custom software

Most of BlockTrades' current revenue is derived from the operation of the BlockTrades website that provides fast and convenient purchasing of various cryptocurrencies. BlockTrades also licenses use of the backend engine used by our website on an OEM basis. Currently this backend is licensed to OpenLedger to handle deposits and withdrawals in return for a 50% share of the market-trading fees collected for the assets it supports. BlockTrades has also undertaken several custom software development contracts and has pending negotiations for future software contracts as a means of providing development capital to support its long term business strategy.

BlockTrades' long term strategy is to create a worldwide network for the seamless exchange of fiat and cryptocurrencies and to profit from service fees associated with support of that network. We also envision a number of other businesses that we can build around that network: management of public offerings, loan origination services,  reputation management services, escrow arrangements, etc.

Corporate Structure
BlockTrades was founded on June 1, 2015 and operates as an exempt corporation under Cayman Islands law. One important side-effect of this structure is that the company is exempt from corporate income tax. It also simplifies many regulatory aspects of the company's operation in the cryptocurrency space as Cayman Islands currently has few if any restrictions associated with cryptocurrency. It's possible that this may change in the future, but it should be noted that Cayman Islands is a hub for financial institutions due to its liberal policies regarding new innovations in fintech and this is one of the primary reasons that BlockTrades was founded in this jurisdiction.

Management
Dan Notestein, President/CEO
Dan's primary responsibilities as president include exploration of new business opportunities, planning and development of new software platforms, and exploratory contract negotiations. Dan is also a founder and president of SynaptiCAD, the primary software development contractor used by BlockTrades. Dan has a Master's Degree in Electrical Engineering and Computer Technology from University of Texas.

Donna Mitichell, VP of Operations and Legal Compliance
Donna's primary responsibilities include management of legal compliance issues associated with cryptocurrencies, management of partner relationships, accounting, and general counsel to BlockTrades. Donna is also Vice President of Marketing for SynaptiCAD. Donna's educational background includes a Master's in Electrical Engineering from Virgina Tech and a  Juris Doctorate degree from Concord Law School. She is an inactive member of the California Bar association.

Futher information on Dan and Donna's industry experience can be found at: http://www.syncad.com/manateam.htm


Discussion of Pro Forma Financial Statements
The initial financial statements for BlockTrades can found at: https://docs.google.com/spreadsheets/d/1r_fJc2K_0a51N80ZwQOvbjFOi9MjYA_SUFZgT78nKbw/edit?usp=sharing

For liability reasons, I'm presenting the financial statements as Pro-Forma documents, but to the best of my knowledge they are computed using generally accepted accounting principles (GAAP). In particular, I am not excluding any “one-time” expenses, although I have highlighted such expenses to show “Operating Income Before Expenses Paid” from our web site separate from expenses associated with its initial development and payments made for that development. This allows a clearer picture of the profits generated from normal purchases by customers excluding fixed costs associated with development of the system and annual legal fees for maintenance of the corporation. Total Equity is also computed using GAAP and represents the expected equity that would be returned to shareholders if all the company's cryptocurrency assets were liquidated and all outstanding loans were paid off (ignoring any additional value attainable from the sale of intangible assets such as the backend software, web site, brand name, etc).

Company Valuation, Offer Price and Mechanism, Restrictions on Offer
BlockTrades has a “book value” of approximately $311K USD (current “liquid” equity of 241K + 70K in intangible assets for development of backend engine). We used a 7x multiple on the company's current book value to get a pre-money valuation of 7 x 311K = 2177K. We'll be offering 1 million shares at an initial price of $2.17 USD equivalent per share.  The shares will be initially purchasable via the BlockTrades website using multiple cryptocurrencies and priced in each cryptocurrency based on the cryptocurrency's current market value. Share ownership will be distributed and accounted for using the digital token “TRADE” (a user-issued asset on BitShares network) and will be solely transferable on the BitShares Distributed Exchange.

Subscribers to this offer will be required to supply their real name, address of residence, a valid email address for notices of shareholder meetings, and an affirmation that they are not citizens or residents of the United States or the Cayman Islands as this offer is not available to US or Cayman Islands citizens/residents. The BitShares accounts to which the TRADE shares are transferred will automatically be entered onto a white list on the BitShares blockchain that will enable those accounts to trade these shares with other members of the white list. The blockchain share holdings data in concert with the company's private database of shareholder contact information will be used to compute the Registry of Members as required by Cayman Islands law.

Timing of the Offer
We have not yet finalized the date at which we will begin offering the shares as we first need to make changes to our website to support the requirements for the offering, but we hope to do so within the next month. In the meantime, I'm happy to respond to any questions about our business or this offering.

For more details about why we're making this previously unplanned public offering, the restriction against purchase by US and Cayman Island citizens and residents, and the corresponding methodology we've chosen for share accounting, see this thread:
https://bitsharestalk.org/index.php/topic,21499.0.html

Can you issue 2 UIA's, one for US citizens, one for others, starting at 50%/50% split? It will be easier to operate imo. You can of course adjust the split percentage when needed.

How will you distribute your future profit, via buyback or dividend distribution?

By the way, if you post this in General Discussion board, it will attract more eye balls.

Splitting it  into two UIAs isn't a great solution, because US citizens should be allowed to sell to non US citizens at any time, since that only further lowers the percentage held by US citizens. Of course, we could allow the US UIA to be sold to anyone, but it still becomes a separate class of stock with more value than the other class (because it's not limited to who it can be sold too).

Maybe we could allow the US UIA to be "converted" to non-US UIA. This would gradually cause a continued decrease in US ownership.

But ideally, we want one class of stock where there's an attribute associated with the UIA that prevents non-whitelisted parties (e.g. US citizens) from purchasing the UIA when its total ownership would increase over 50% as a result of that purchase.

As for profit distribution, I suspect our primary method will be dividend distribution, although we might do buybacks if circumstances seem appropriate (e.g. if shareholders favor such a method). Cayman Islands law is pretty flexible in this regards, so it's mostly a case of what makes the most sense from the point of shareholders rather than legal regulations. The biggest issue from the buybacks point of view would be to avoid buying back enough that the ownership went above 50% US holders :-) So I think we will stick with dividend distribution initially.

What was the issue you guys solved?

https://github.com/cryptonomex/graphene/issues/251
We took on this one to get started in the code base as it was an easily repeatable one and it was a good match for our skill set.

You're voted in now, but still no future plan or what have you done from the beginning date.
If you provide weekly or bi-weekly updates, you will get more support from the community.

Our future plan is pretty much what I posted at the head of this thread, just to look thru open issues related to blockchain/server code and take then on based on signficance, repeatability, etc. I've been planning to do bi-weekly updates on what we've done, at least at the beginning.  I'll file our first report this week, but I need to accumulate the work done from all involved, which isn't easy to do yet since we're snowed in here and it's better/faster to do it face-to-face.

Eric and I were only able to solve one issue so far (it took about 8 man hours), as we've been tied up with other tasks, and I've spent another hour or so looking at github issues, discussing potential solutions, and assigning them based on priority. Theo's done the most work so far, but I still need to get his status report. Once I've accumulated total hours spent by each party, I'll allocate funds accordingly. If it turns out that we don't devote enough hours on any given month, I'll just send the extra funds back to the reserve account for that month. This will give us flexibility to spend time on serious issues when we need to, and work on our own stuff when there's no pressing problems (or when we've got pressing work of our own).

With the current load on poloniex, it's a great time to make some fast trades on the DEX or using BlockTrades/MetaExchange/Transwiser bridges. Maybe we should have scheduled our liquidity event for today.