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General Discussion / Re: A Generalised Approach to Yield on BitAssets
« on: May 17, 2015, 01:20:00 pm »A middle-ground option: Cash + At-Call Interest Bearing Deposits
For completeness there is a third option which could be worth exploring.
Traditional money markets have 3 options working in unison - cash, deposit accounts, and term investments.
The Yield Option on bitAssets explored above is like a substitute for a deposit account. It could effectively do away with the need for a cash option, which arguably may no longer be required in a digital economy. On the other hand, there may be a good use for a separate cash option (e.g. improved anonymity or other features?) that perhaps has not been fully explored or implemented yet, and perhaps we want to keep this option open.
Having a cash and at-call deposit option working together could still offer at-call yield potential through the deposit market, and so still achieve the same benefits of a yield-based bit-Currency. The main difficulty is dealing with the situation where natural market rates are negative. There would have to be an enforceable way to charge interest on cash to return to shorts (probably method 1 in the OP). An open question is how important negative interest rates really are.
I think it is important to discuss how we see these different components working together.
>BitAssets are create using deposit accounts
The blockchain can collect BTS, for those want to save and investing in bitAssets creation, example Alice want to create bitSILVER to create btiAssets is Alice need to use the current price 100BTS to 1silver Alice need to give 100BTS to the blockchain pool of BTS the blockchain pool automatic give 100BTS to secure this contract the bitAssets is been create, and the bitAssets can't exchange form the blockchain pool, the bitAssets can only exchange BTS form the market exchange. The blockchain pool of (BTS 100%) 50% of the pool use to secure contract and cover the lost 30% cover the lost 20% can be take out only the pool BTS back bitAssets never over 70% if the BTS price drop over 70%, 70% or 80% no more bitAssets can be create using deposit accounts and give warning and 4 thing can be done.
1)increase the BTS price.
2)increase the BTS supply in the pool.
3)increase the bitAssets transaction fee the additional fee exchange to BTS and give to the blockchain pool. ( blockchain pool BTS use 90%< automatically activate)( blockchain pool BTS use 90%> normal rate)
4)decrease the total number of bitAssets using gateway.
How the people save BTS at the blockchain earn example total BTS in the blockchain pool is one million Bob save ten thousand, Bob earn 1% of the transaction fee, now the transaction fee give 30% for all those people save BTS at the blockchain.
bitAssets
1)first back by long and short
2)if no people want to short deposit accounts can back the bitAssets
3)bitAssets over the deposit accounts max limit the blockchain back the deposit accounts by increase the transaction fee