This is nothing more than a proposal for elaborate ponzi scheme - or it will
be perceived so by many. The yield can be only financed from the latecomer investors,
when the marketcap will start to deflate, it's over.
There is not a problem with demand , there is a problem with supply
NO one will be incentivized by this to short and sell USD especialy after
they can get 5% yield on it.
It will not move bts from exchanges - exchanges will simply implement shorting
and yield harvesting for those who keep bts at them.
At least BM proposal for Subsidizing Market Liquidity is for jumpstarting of
liquidity. Eventualy later the subsidy can be removed.
In case of 5% yield, this has to be perpetuated until the ponzi colapses.
It will not move bts from exchanges - exchanges will simply implement shorting
and yield harvesting for those who keep bts at them.
Lots of coins already offer POS minting rewards, which exchanges currently mint their balances and return the rewards to their customers which is presumably a much simpler process?
In case of 5% yield, this has to be perpetuated until the ponzi colapses.
On the contrary, BitAssets have had variable yield before ranging from 0-5% in BTS 1.0, it was removed in 2.0, nothing collapsed...
The yield can be only financed from the latecomer investors, when the marketcap will start to deflate, it's over.
It's also not a ponzi scheme, it's a redistribution scheme.
You're taking X% from BTS via dilution and saying you can have it back if you yield harvest. So it's fairly self sustaining even if no new money comes into the system. However at the very least, it creates BitAssets, increasing our CAP & number of BitUSD holders from 2% Crypto USD market share to the market leader.
Uphold $2 million
Tether $1.4 million
Nubits $0.78 Million
BitUSD $0.098 Million
However it should also increase new BitUSD demand but in order for them to get their variable yield, hopefully >5% , over the course of a year, they'll have to buy $1 of BTS today. This increased BTS demand potentially increases the BTS price which potentially changes market sentiment to the point more people want to take a leveraged position on BTS via shorting. While it seems ponzi-ish the system doesn't collapse once a saturation point is reached or even if it doesn't work in the first place as it's not a set $ amount that is funding returns but a set %, which can also be mitigated by yield harvesting.
The market will be aware that it's variable and removable just like it's been removed in the past, if it works the net result is a market leader position in terms of BitUSD CAP and number of users and hopefully ultimately a bustling BitUSD economy due to third parties offering products, services, payments and other via BitUSD as they are attracted by the size of that market and number of users, all with BitUSD sitting in their account they can send anywhere in the world in 3 seconds. Just the way Bitcoin gained 100 000 merchants despite the fact that 70%+ was hoarded and hadn't moved for 6 months +
http://www.ofnumbers.com/2014/11/22/approximately-70-of-all-bitcoins-have-not-moved-in-6-or-more-months/Even if the price declined and the yield was much lower, or even if you removed it and it went to zero, it would still be more favourable than taking your USD balance back to a bank which are expected to have negative rates well below 1% in the near future
http://www.zerohedge.com/news/2016-02-10/something-very-disturbing-spotted-morgan-stanley-presentation-slide (as well as less privacy, more capital controls etc.)
Do you view all POS minting rewards like DASH, PPC etc. as Ponzi schemes?