[BSIP] Percentage-based transfer fee solution based on CER

[jakub]

Micro transactions will require network fees even lower than 1 bts.

Please bear in mind that we need to preserve a reasonable threshold to prevent spam and 1 BTS might not be enough for this purpose.
 
3 BTS is something around $0.01. I don't think anybody cares about such an amount.
In my proposal I suggested 6 BTS as minimum, which translates into $0.02.
But let's not be distracted by debating fees - this will be decided by the committee anyway.

[kenCode]

Mass adoption..
Please guys keep in mind that Smartcoins POS will allow you to buy anything from that 60 cent pack of chewing gum to a Ferrari.

[kenCode]

My thoughts:
* committee should be able to set a global lower limit, E.G. 6 BTS
* committee should be able to set a global upper limit, E.G. 300 BTS
* committee should be able to set a global percentage, E.G. 1%
* issuer (or committee for BTS and committee issued smart coins) be able to set the per-asset fee mode, E.G. flat mode or percentage mode
* since issuer doesn't get any split of fees, to avoid harm to other parties, issuer has no permission to set per-asset based parameters

More flexible settings would be:
* issuer get some fee split (discussed below)
* issuer be able to set a per-asset lower limit
* * if it's lower than the global lower limit, issuer pay the difference from fee pool to network
* * if it's higher than the global lower limit, the difference pays to the issuer
* issuer be able to set the per-asset percentage
* * if it's higher than the global percentage, the difference pays to the issuer
* * if it's lower than the global percentage, issuer pay the difference from fee pool to network (not to the referral program, to avoid referrers earn quick money from issuers by self-transferring)
* issuer be able to set a per-asset upper limit
* * if it's higher than the global upper limit, the difference pays to the issuer
* * if it's lower than the global upper limit, issuer pay the difference to network (not to the referral program, to avoid referrers earn quick money from issuers by self-transferring)

In this way issuers are motivated, referrers may loss some if issuers set low percentage and/or low upper limit (while issuers also need to pay some in this case).

Exactly. My chewing gum example and mobile wallet screenshot are great examples of this. Micro transactions will require network fees even lower than 1 bts. Example 2: http://cryptofresh.com/b/2347475

[jakub]

My thoughts:
* committee should be able to set a global lower limit, E.G. 6 BTS
* committee should be able to set a global upper limit, E.G. 300 BTS
* committee should be able to set a global percentage, E.G. 1%
* issuer (or committee for BTS and committee issued smart coins) be able to set the per-asset fee mode, E.G. flat mode or percentage mode
* since issuer doesn't get any split of fees, to avoid harm to other parties, issuer has no permission to set per-asset based parameters

This is a correct summary of the concept proposed in the BSIP.

More flexible settings would be:
* issuer get some fee split (discussed below)
* issuer be able to set a per-asset lower limit
* * if it's lower than the global lower limit, issuer pay the difference from fee pool to network
* * if it's higher than the global lower limit, the difference pays to the issuer
* issuer be able to set the per-asset percentage
* * if it's higher than the global percentage, the difference pays to the issuer
* * if it's lower than the global percentage, issuer pay the difference from fee pool to network (not to the referral program, to avoid referrers earn quick money from issuers by self-transferring)
* issuer be able to set a per-asset upper limit
* * if it's higher than the global upper limit, the difference pays to the issuer
* * if it's lower than the global upper limit, issuer pay the difference to network (not to the referral program, to avoid referrers earn quick money from issuers by self-transferring)

In this way issuers are motivated, referrers may loss some if issuers set low percentage and/or low upper limit (while issuers also need to pay some in this case).

The above enhancements make sense to me.
My only concern is that they make the whole system much more complex from the issuer's point of view.
So to preserve simplicity I'd suggest to make the default settings simple, and to hide those additional parameters behind a check-box indicating more advanced options.

[abit]

My thoughts:
* committee should be able to set a global lower limit, E.G. 6 BTS
* committee should be able to set a global upper limit, E.G. 300 BTS
* committee should be able to set a global percentage, E.G. 1%
* issuer (or committee for BTS and committee issued smart coins) be able to set the per-asset fee mode, E.G. flat mode or percentage mode
* since issuer doesn't get any split of fees, to avoid harm to other parties, issuer has no permission to set per-asset based parameters

More flexible settings would be:
* issuer get some fee split (discussed below)
* issuer be able to set a per-asset lower limit
* * if it's lower than the global lower limit, issuer pay the difference from fee pool to network
* * if it's higher than the global lower limit, the difference pays to the issuer
* issuer be able to set the per-asset percentage
* * if it's higher than the global percentage, the difference pays to the issuer
* * if it's lower than the global percentage, issuer pay the difference from fee pool to network (not to the referral program, to avoid referrers earn quick money from issuers by self-transferring)
* issuer be able to set a per-asset upper limit
* * if it's higher than the global upper limit, the difference pays to the issuer
* * if it's lower than the global upper limit, issuer pay the difference to network (not to the referral program, to avoid referrers earn quick money from issuers by self-transferring)

In this way issuers are motivated, referrers may loss some if issuers set low percentage and/or low upper limit (while issuers also need to pay some in this case).

[jakub]

the whole structure is OK, the point is the value, I must keep sensitive to not allow the fee go up, if it cannot go down.
not only TCNY and TUSD are relevant to me, BTS and main BitAssets are all relevant to me.

As I stated before, personally I'd be fine with keeping BTS transfers flat and very low (e.g. 5 BTS) while having bit-assets on percentage-based fees.
I'm sure that gradually we can find some middle ground. I don't want to fight, I want to get things done and I guess you want that too.

Let's work together on percentage-based fees and once we have them, we can bring the discussion about the values to the committee as it belongs there.
This is just a politically neutral worker proposal aimed to give us more flexibility.

[bitcrab]

Anyway, before we declare 1% and 300 BTS as "really scary" we should do a basic statistical analysis (i.e. find out the mean value and its deviation) and thus estimate the economic impact of those values across different segments of our users.

maybe needed for another value, but not needed for 1% and 300 BTS, just as if someone sell IPhone 6 Plus to me with the price of 60K CNY, I can tell it scary without thinking.

But please do not drag this proposal into yet another transfer fee battle.
The whole point of this proposal is to make transfers below $5 viable while preserving the economic foundation of the referral program.
If you don't like it, you will be able to keep TCNY and TUSD out of it - this whole thing is optional for the issuer.

the whole structure is OK, the point is the value, I must keep sensitive to not allow the fee go up, if it cannot go down.
not only TCNY and TUSD are relevant to me, BTS and main BitAssets are all relevant to me.

[jakub]

You saying "definitely not acceptable" at this stage is definitely not helpful.

sorry for saying that, but 1% and 300 BTS is really scary, and it is not mentioned in the BSIP that the value is just an example.

It's clearly stated in the Assumptions section:

Values used in the description are just an initial proposal, the actual values will be determined be the committee.

Anyway, before we declare 1% and 300 BTS as "really scary" we should do a basic statistical analysis (i.e. find out the mean value and its deviation) and thus estimate the economic impact of those values across different segments of our users.

But please do not drag this proposal into yet another transfer fee battle.
The whole point of this proposal is to make transfers below $5 viable while preserving the economic foundation of the referral program.
If you don't like it, you will be able to keep TCNY and TUSD out of it - this whole thing is optional for the issuer.

[bitcrab]

You saying "definitely not acceptable" at this stage is definitely not helpful.

sorry for saying that, but 1% and 300 BTS is really scary, and it is not mentioned in the BSIP that the value is just an example.

[jakub]

if I am correct, the proposal can be summarized like this:

charge 1% of the transferred value. 6 BTS as minimum. 300 BTS as maximum.

From the user perspective, that's correct.

for a lot of users, this is raising their burden. definitely not acceptable.

my proposal:

charge 0.3% of the transferred value, at least 3 BTS, at most 30 BTS.
and the 3 parameters can be adjusted while necessary.

Let's separate the idea of this proposal from actual values applied in it.
Setting the exact values is a sensitive issue and it belongs to the committee.

Personally,  I don't treat this proposal as a way to lower the transfer fees. I think on average they should be more or less the same. My only intention is to restructure them.
You saying "definitely not acceptable" at this stage is definitely not helpful.

[bitcrab]

if I am correct, the proposal can be summarized like this:

charge 1% of the transfered value. 6 BTS as minimum. 300 BTS as maximum.

for a lot of users, this is raising their burden. definitely not acceptable.

my proposal:

charge 0.3% of the transfered value, at least 3 BTS, at most 30 BTS.
and the 3 parameters can be adjusted while necessary.


 

[CoinHoarder]

I thought percentage-based transfer fees were not possible because of stealth transfers?

But if we cannot do it for stealth, should this fact prevent us from having percentage-based fees on normal transfers?

This is what I was referring to. I thought that Stealth transfers prevented all other transfer fees from being percentage based, but maybe I am misunderstanding something. From your other thread..

In the last Mumble @bytemaster mentioned that percentage-based transfer fees are a complex subject, mainly because of these two reasons:
- it's hard to reliably determine the exact BTS value of an asset at any given point of time
- for stealth transfers the amount is not available

[jakub]

I thought percentage-based transfer fees were not possible because of stealth transfers?

Stealth transfers are indeed excluded, they need to remain on flat fees.
But if we cannot do it for stealth, should this fact prevent us from having percentage-based fees on normal transfers?

Also, percentage-based fees make the most sense for small amounts. And people doing stealth are not dealing with small amounts anyway.
So these are two different use-cases.

[onceuponatime]

I thought percentage-based transfer fees were not possible because of stealth transfers?

I expect that a very small percentage of transactions will be stealth.

[CoinHoarder]

I thought percentage-based transfer fees were not possible because of stealth transfers?