Great. I think more and more people will be willing to hold bitCNY in China

Quote from: OldMan on September 09, 2014, 08:52:23 pm

Quote from: arhag on September 09, 2014, 08:29:08 pm

Quote from: OldMan on September 09, 2014, 07:49:46 pm

Quote from: MeTHoDx on September 09, 2014, 06:09:41 pm

Should we start calling the "rainy day fund" the "rewards fund"?

Reserve fund.

I agree. I would also like to bring up an earlier point regarding the supposed lack of a need for an insurance fund. I don't think the yields replace the need for an insurance fund. If a black swan event occurs and the BitUSD issued is partially collateralized by the BTSX held as collateral in the short position, this might hurt the peg. As the BitUSD that was collected for yield is instead destroyed until BitUSD is fully backed, the peg should return to normal. However, that may take some time. On the other hand if there was enough BitUSD held in the reserve fund, the necessary amount of BitUSD could be immediately destroyed to give BitUSD holders immediate confidence that their BitUSD is fully backed. They do not have to assume the network will be able to collect BitUSD in the future to balance things; they will know it immediately.

In fact can't there be a possibility in which the network will not be able to collect enough BitUSD to again fully back the remaining BitUSD with the BTSX held in collateral? If everyone tries to convert their BitUSD into BTSX, couldn't it be possible that some slow movers will have BitUSD without any short position to back it. In such a scenario, the network was too eager in providing BitUSD holders high yields. All the quick movers were able to cash out their BitUSD with high yields into BTSX. The slow movers got stuck with worthless BitUSD.

I think there should be a minimum limit on the BitAsset reserve fund. This minimum limit should be proportional to the amount of the BitAsset issued. If the reserve fund is below the minimum limit, the BitAssets collected as fees should first be used to fill up the fund to above the limit. As the fund grows well above the limit, the network should determine an appropriate yield rate to pay to the issued BitUSD that will not reduce the fund levels below the minimum limit. It should also consider the history of incoming fees in order to pick a yield rate that is fairly consistent (not too volatile) but still high enough to not grow the reserve fund without bound. If a black swan event occurs, the network should immediately destroy as much of the BitAssets in the reserve as necessary and possible to make the BitAssets fully backed.

This merits consideration by the devs.

The reserve fund will average the fees collected by the network over 1 year because it takes 1 year to pay them out.   Thus the reserve fund will continue to grow and be available to handle issues.

Quote from: OldMan on September 09, 2014, 07:58:57 pm

'Yield' could replace rewards as a non-contentious alternative to interest.

A bit awkward in common use but still an improvement over 'reward'.

Exactly which is why the UI + API use yield rather than interest

Define "Instant"...   on average a BTSX transaction takes 5 seconds to clear... with a small tweak we could reduce that to 2.5 seconds. 

Latest updates on this yield...

If we make it fully linear with time, then people will attempt to use "compounding" to maximize their return by claiming their interest anytime the benefit from compounding exceeds the transaction fee. 
If we make it non-linear with time then it could make account deposits non-fungible: old balances are worth more than new balances.
There is no computationally simple way to perform "compound interest" because the "interest rate" is variable over time and a number of other complexities.

So we have implemented a compromise rewards system.
1) Any balance held less than 1 day gets nothing.  This rule sets the maximum rate of compounding to daily. 
2) 80% of your balance earns "simple interest" proportional to how long you have held it.
3) 20% of your balance earns "interest^2" proportional to how long you have held it squared... the goal of this rule is to make "long-term holders" better off than if they had attempted to compound it. 

I said it before and I will say it again, this isn't really "interest" because it doesn't "accrue" in a monotonic manner.   Your "estimated yield" could go down from day to day depending upon the rate of new fees, rewards claimed by others, and new issuance.   

So there is no "right or wrong" way to calculate the yield.  I am sure there will be many "games" and "strategies" people will have to maximize their yield at the expense of others such as:
1) claiming their yield right before they expect a supply increase
2) claiming their yield right after a bunch of margin calls reduces BitUSD supply
3) claiming their yield before a large balance hits maturity.

The expectation is that this "bonus" is something that will "average out" as people make transactions and that (for most people) it isn't worth attempting to game.   However, the mere fact that it can be "gamed" will drive people who like this kind of thing to get involved. 

Yes the numbers are a tad arbitrary, the calculations simplistic, but they get the job done of causing BitUSD to have a positive yield proportional to fees earned.

Quote from: Riverhead on September 09, 2014, 06:29:19 pm

UPDATED: You only need the bottom 51, not the top.

Now that market cap of BTSX is reasonable high and the top 51 delegates have over 10% of the voting shares it's an interesting exercise figuring how much it would cost to unseat the top 51.

So with a market cap of $70MM USD the cost of unseating the 51 delegates would be:

50th delegate has 10.11% and the 101st delegate has 9.2% of the share votes for an average of say 10% of shares voted.

$70MM USD market cap. 10% is $7MM USD to buy enough votes to unseat all 51. That is of course assuming you could amass $7MM USD worth of BTSX without raising the price at all.

That leaves the attacker to ponder how they could net more than $7MM USD out of the attack.

I think it would be a major bonus for the entire network if someone did that... here is what would happen:

1) people would organize to vote them out...
2) if the attacker stopped transactions that voted for other people then DAC Sun would release a hard fork that burned the attackers shares and the network would continue... instant 10% dividend