free market fee funding pool?

[puppies]

I am not super opposed to the current way this is done.  I just think my proposal would be better. 

There are a couple of ways in which I think this is the case.

With the proposed changes that will make fees paid on bts trades eligible for the referral program, and the lifetime member discount, it will be needlessly confusing to customers when they can expect a discount/referral income, and when they are not.  I think our fee structure should be simple and consistent.  We should keep any non standard functions and fees as minimal as possible.  Bitshares is already confusing enough.

As a witness I don't want to have to decide if the fee pool should subsidize trades, or penalize them.  Even in a decentralized system it is still too tempting to spend other peoples money.  The calls to subsidize transactions in certain assets is a prime example of this.  People will come up with all sorts of justifications for why their particular subsidy is right and good.  I would prefer to simply not have the power to spend other peoples money.

These are a couple of the big reasons why I think that switching to a free market fee pool funding solution would be an improvement.  People could still subsidize certain markets, but they would have to do it with their own funds.  With percentage trades on all assets feeding the referral program, we could reduce the price the network charges, while still maintaining an appropriate subsidy for our marketers. 

It would largely be a net loss for asset issuers.  They would no longer be in complete control of their assets.  For many this would not be much of a loss.  They would no longer have to worry about funding the fee pool, and converting the funding pool to bts to pay the fees.  They would lose out on any possible profit incentive that could be worked into their now, but they would also be shielded from any potential losses. 

[xeroc]

Do UIA' fees go to the dac?  I thought they went to the asset issuer, and that
only MPA fees went to the dac since their issuing account is the committee
account. 

You are correct .. MPA fees go to the committee account
I though we were talking about bitUSD

If we would like to save a potential revenue stream for UIA issuers we could
have a network percentage fee for trades, but still allow the issuer to set the
percentage fee, where the issuer keeps the difference between the percentage
fee set, and the network percentage fee. 

The issue can set an independent percentage trading fee .. That's what BM
proposed for MPAs already. In combination with a core_exchange_rate of "close
to infinity", a customer would pay close to zero network fee and solely the
trading fee (which goes to the issuer). The network fee then has to be payed by
the fee pool (read: the issuer).

If we exposed all of the fees to the referral program I agree that the network
would not make as much.  It would however make the referral program more
attractive, and/or we could reduce overall fees while maintaining some network
profitability, and referral income

The trading fees are asset independent. Question is only about how to set the
core_exchange_rate for your business.

[puppies]

Do UIA' fees go to the dac?  I thought they went to the asset issuer, and that only MPA fees went to the dac since their issuing account is the committee account. 

If we would like to save a potential revenue stream for UIA issuers we could have a network percentage fee for trades, but still allow the issuer to set the percentage fee, where the issuer keeps the difference between the percentage fee set, and the network percentage fee. 

If we exposed all of the fees to the referral program I agree that the network would not make as much.  It would however make the referral program more attractive, and/or we could reduce overall fees while maintaining some network profitability, and referral income

[xeroc]

That sounds like a nice idea .. but, you need to know that every non-BTS asset paid as fee is taken by the DAC and thus will be distributed to the shareholders of the DAC for a profit. Why would you (as a business) remove your revenue stream and give it to a single individual?

You should also consider the fact that we have two options for the core_exchange_rate .. it can either be HIGHER than the feed price, making the DAC a profit .. or LOWER than the feed price, making it a cost ..

Only the second case needs to be handled by either a worker or individual .. in the first case .. the committee could refill the assets fee pool (in BTS) by selling the asset in the DEX ...

[puppies]

I would like to propose a free market fee funding pool.

Currently if I send 100 bitUSD to someone then I am charged a fee in bitUSD.  This fee is then traded for bts in the bitUSD fee pool.  The bts is used to pay the network, and the bitUSD is given to the asset issuer.  (committee account)  The idea as I understand it, is that the committee account can sell this bitUSD for bts, and use the bts  to fund the fee pool.  The asset issuer can also set a percentage based fee on trades based on their asset and collect that percentage to help fund the fee pool.  strain on this fee pool system was mentioned as one of the reasons why we were unable to set a network percentage based fee, that would be payable to referrers. 

I think there might be a better way.  What if we allowed users to fund the fee pool at a certain rate, and then allowed them to keep the bitasset that was traded for the bts they used to fund the fee pool? 

Lets say that I am willing to fund the bitUSD fee pool for 5% above the feed price.  When someone makes a trade or transfer of bitUSD they would pay a fee in bitUSD.  that bitUSD would then be traded for my bts.  My bts would be used to pay the fee (which could be split according to the referral system) and I would receive the bitUSD that the user paid as a fee. This would incentivize the funding of fee pools, and competition for this automatic profit would drive the premium paid by the bitasset user down to a minimum.

Whats more, for assets that don't have price feeds the fee pool supporter could set a straight up conversion rate, which could act as a price discovery mechanism, and allow network set percentage based fees that were payable to referrers.  This would require a network enforced minimum trade amount (just like those imposed on centralized exchanges) 

Of course this would all require that the current fee rate is visible to end users. 

Also regardless which fee pool funding mechanism we use, we should all have the option of just paying the network fee ourselves in our own  bts.