BitShares Forum
Main => General Discussion => Topic started by: Empirical1.2 on February 20, 2016, 03:03:26 am
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BM recently suggested diluting BTS at a rate of up to 3% a year to subsidize market liquidity, https://bitsharestalk.org/index.php/topic,21544.0.html
This got me thinking about diluting for BitAsset yield and I realised the cost to shareholders could be fairly neutral? provided they were willing to yield harvest but doing so possibly has a lot of worthwhile benefits...
What are the benefits of diluting for BitAsset yield, (which you could mitigate by yield harvesting.)
- BitAssets would offer the mythical +5% yield at a time when banks will be moving to negative interest rates.
- The BitAsset CAP would increase and we would become in nominal terms the Crypto USD market leader.
(Instead of only being percieved to have 2% market share atm.)
- Hundreds or thousands? Of BTS shareholders who haven't used the DEX before would be holding BitAssets.
Now we and other businesses can start pricing & offering products in BitAssets because most shareholders hold it.
- This would get people to remove their BTS from the centralized exchanges and move it to the DEX
- With hundreds of people moving in and out of BitAssets and also lots of demand for them due to yield it would positively affect liquidity.
(That's not to say other liquidity centric measures couldn't be adopted if shareholders agree the cost of diluting for yield is fairly low considering it can be mitigated by yield harvesting?)
This is not dissimilar to POS minting rewards where the coin is diluted but to avoid it, you just have to make the effort to take part in the minting process which usually infers some benefit to the coin such as security/mining/removing supply etc.
Other:
Diluting 2.5% creates at least +5% BitAsset yield because at most only 1/2 of all BTS could be in BitAssets while most of the other 1/2 would have to be short those BitAssets? So 2.5% dilution translates to at least circa 5% yield on BitAssets I think.
BTS could decline in value reducing relative yield but as not everybody would yield harvest, a lot of BTS remains unclaimed, many remains on exchanges and many short term speculators and traders would not get involved, it's likely the BitAsset yield would consistently be much higher than +5%
Edit: (There might be something simple I'm missing here of course)
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Great initiative on suggesting this (or at least exploring the idea). I think we should do something to jumpstart liquidity, and having a yield has always made sense to me. That was supposed to be a part of BitShares before being sacrificed. As for the numbers, I'll let those who are smarter than me take a look at your suggestion. If it is sound, then thumbs up from me.
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I think knocking those very restrictive 5 BTS/sec cap is in order...
By the beginning of March the dev. alone will have to start in-fights to get above the threshold of being paid or not. Add BM's liquidity spending, and you yourself have 2 ideas in 2 days how to spend those funds. To say nothing that 10% is better than 5% so you can use a little extra.
What is a good number to last us say at lest 6mo? 50 BTS/sec? Sounds good?
On other benefits of dilution read and listen to BM. How to put yourself in 'Dilution (or Delusion) state of mind, read my other posts'.
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On this particular proposal - give 50% to shorters and 50% to smartcoin holders. Yield harvesting still yields the same, just some crazy short my sell into this newfound bitAssets demand.
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I think knocking those very restrictive 5 BTS/sec cap is in order...
By the beginning of March the dev. alone will have to start in-fights to get above the threshold of being paid or not. Add BM's liquidity spending, and you yourself have 2 ideas in 2 days how to spend those funds. To say nothing that 10% is better than 5% so you can use a little extra.
What is a good number to last us say at lest 6mo? 50 BTS/sec? Sounds good?
On other benefits of dilution read and listen to BM. How to put yourself in 'Dilution (or Delusion) state of mind, read my other posts'.
I also don't like most of the ideas I've seen for dilution.
This one seems fairly circular/low cost though in that any BTS shareholder can easily avoid this particular dilution by yield harvesting but getting them to do so gives us a lot of benefits I think.
On this particular proposal - give 50% to shorters and 50% to smartcoin holders. Yield harvesting still yields the same, just some crazy short my sell into this newfound bitAssets demand.
You're probably right here. I suppose the weighting could also be adjusted depending on how the market responds.
I think lowering forced settlement to 98/99% would also be beneficial.
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I don't think people parking money in BitAssets and letting it sit there has enough value to us to justify this.
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No yield for BitAsset money need to move around then the economy can prosper. BTS need too be saving for people then BTS have value
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I don't think people parking money in BitAssets and letting it sit there has enough value to us to justify this.
http://www.ofnumbers.com/2014/11/22/approximately-70-of-all-bitcoins-have-not-moved-in-6-or-more-months/
70% of all Bitcoins had not moved in 6 months according to that study, most people are just parking their Bitcoin and letting it sit there, yet it's an incredibly popular token and is accepted by over 100 000 merchants worldwide. Even if there is a lot of parking, increasing the CAP and number of holders makes you a lucrative market and brings utility. Personally I think rapidly expanding the amount of BitUSD and the holders of it, is the first step in getting the DEX and BitUSD to replace banks and getting third parties to offer products and services for BitUSD.
You don't think getting all that BTS off the centralized exchanges and onto the DEX has a lot of value?
You don't think BitUSD having a higher CAP and number of holders than all our Crypto USD competitors combined has value?
You don't think attracting new users + money into BTS who will also learn about The DEX and BitAssets has value?
Even people who just parked their money there in all scenarios would be the equivalent of long term investors that we would have gained for 1/6th of what BM thinks they're worth...
...paying individuals to commit funds for longer periods of time... provides enduring value..
...using dilution as high as 15% on short-term speculators to compensate long-term investors can be very helpful in both securing the network, building loyalty, and creating a profitable system.
http://bytemaster.github.io/article/2016/01/04/The-Benefits-of-Proof-of-Work/
At a future date you could even remove/drastically reduce the yield but you would be left with thousands of BitUSD holders that are now familiar with the DEX and it's other advantages and a lot of BTS that has been removed from the centralized exchanges.
Bearing in mind all that value won't cost you much if you yield harvest yourself, I'm surprised you don't think it's worthwhile.
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+5% +5% +5%, great, good idea, i like it, just do it!
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You don't think getting all that BTS off the centralized exchanges and onto the DEX has a lot of value?
Not actually right BTS can be anywhere as long BTS not creating BitAssets BTS is useless in DAC.
You don't think BitUSD having a higher CAP and number of holders than all our Crypto USD competitors combined has value?
BitAssets yield farming is not good for BTS example BitAssets and BTS both have yield which one will you use as saving?
You don't think attracting new users + money into BTS who will learn about The DEX and BitAssets has value?
Yes I believe Bitshares need more new users to grow BTS value to beat BTS inflation give yield to BitAssets hurt BTS value.
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Isn't that counterproductive?
Offering yield on BitAssets by diluting BTS would drive the BitAsset price up (which is trading 5% above the peg anyway) and BTS price further down. I'd always thought we want BTS to go up, relative to the BitAssets.
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Isn't that counterproductive?
Offering yield on BitAssets by diluting BTS would drive the BitAsset price up (which is trading 5% above the peg anyway) and BTS price further down. I'd always thought we want BTS to go up, relative to the BitAssets.
Not that tonyk is a fan of the idea but his suggestion of giving 1/2 the dilution to the shorts should bring some of them closer to the peg.
If we reduce forced settlement to 98/99% that will help bring it closer to 1-1.
This wouldn't bring the BTS price down if the majority of it is yield harvesting imo. We're mostly diluting and paying ourselves back the amount we diluted but in the process forcing people to take their BTS off the exchanges onto the DEX and into BitAssets, making us holders of the product we are trying to bootstrap. (In the process making us the Crypto USD market leader by CAP and number of holders)
New BitAsset only holders attracted by the yield would have to buy $1 worth of BTS in order to gain circa $0.05 yield per year... So it should pull more money into BTS than it costs until the initiative reaches a saturation point which could take many years.
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Yield was the only reason I bought usd... So I'd support your idea!
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This is a redistribution of future wealth to bitassets' holders. It encourages bitasset hoarding. How does it solve the liquidity problem when users are hoarding their bitassets eg bitUSD (ie shorters cannot close their position when users do not wish to sell their bitUSD) ?
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This is a redistribution of future wealth to bitassets' holders. It encourages bitasset hoarding. How does it solve the liquidity problem when users are hoarding their bitassets eg bitUSD (ie shorters cannot close their position when users do not wish to sell their bitUSD) ?
I wouldn't call it a redistribution of future wealth but of current wealth which can be mitigated by yield harvesting. So it's fairly neutral in cost but with the benefits of removing BTS from centralized exchanges, creating the Crypto USD market leader by CAP and number of holders.
There could be increased liquidity benefits due to number of holders and people moving in and out of their overall BTS/USD positions. As you can see from an old Bitcoin study, 70% of it 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/ yet Bitcoin was still fairly liquid despite the hoarding and had a large amount of utility (100 000+ merchants) because third parties were attracted to the potential market (based on CAP and number of holders.)
As I said though as this is a fairly net neutral cost redistribution, you still have room to make a separate more purely liquidity focused play as well if you choose....
That's not to say other liquidity centric measures couldn't be adopted if shareholders agree the cost of diluting for yield is fairly low considering it can be mitigated by yield harvesting?
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I wouldn't call it a redistribution of future wealth but of current wealth which can be mitigated by yield harvesting. So it's fairly neutral in cost but with the benefits of removing BTS from centralized exchanges, creating the Crypto USD market leader by CAP and number of holders.
There could be increased liquidity benefits due to number of holders and people moving in and out of their overall BTS/USD positions. As you can see from an old Bitcoin study, 70% of it 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/ yet Bitcoin was still fairly liquid despite the hoarding and had a large amount of utility (100 000+ merchants) because third parties were attracted to the potential market (based on CAP and number of holders.)
As I said though as this is a fairly net neutral cost redistribution, you still have room to make a separate more purely liquidity focused play as well if you choose....
The key is take something will grow value in time backed something Asset will lost value in time
Can't imagine people believe in the other way round you can ignore me you can not ignore the true
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Diluting at low price bts die
bts die bitAsset die
all die
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What happens if the price falls and we can't dilute anymore or offer the same yield? People will dump everything. This would be fine as long as the price increases but there's not much backing that up. People will only hoard. At least with subsidized liquidity we are stimulating the use of the DEX.
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What happens if the price falls and we can't dilute anymore or offer the same yield? People will dump everything. This would be fine as long as the price increases but there's not much backing that up. People will only hoard. At least with subsidized liquidity we are stimulating the use of the DEX.
If the BTS price drops a lot it's more likely people will sell because they're worried about collateral. The presence of yield, even if it's variable, actually provides some incentive to keep holding in that scenario.
At a future date you could even remove/drastically reduce the yield but you would be left with thousands of BitUSD holders that are now familiar with the DEX and it's other advantages and a lot of BTS that has been removed from the centralized exchanges.
I've already referenced how the majority of Bitcoin is hoarded, 70%+ doesn't move for 6 months+, in that old study but it's still gains liquidity and utility the more people that adopt it and the higher it's capitalization.
Also when you have an interest bearing savings account at a bank you may still use it to make and receive payments as well as buy various products and services. This would be getting people to start using BitUSD in the same way. When businesses see thousands of potential customers with lots of price stable BitUSD in their account they can buy anything with in a few seconds then they will be attracted by that potential market and utility will increase.
The potential exploit for the liquidity measure you are more in favour of is self-trading and it's also not a fairly circular/neutral cost like this. So you could spend a lot of money and increase perceived liquidity for a while but not see a significant increase in BitAsset CAP, users, adoption or utility.
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+5% +5% +5%, great, good idea, i like it, just do it!
My man 8) +5%
I have a few questions.
1. If we do this, and things seem to go sideways, wouldn't it be just a matter of the Committee adjusting the rate? We can put an end to the experiment going wrong. Or even more direct, shareholders can vote out the Worker, In which case, the risk is manageable on two fronts.
2. Would this mean a much tighter peg to real USD? ie. a premium in the neighbourhood of 1% instead of 50%?
3. What will it cost us if we don't do this?
4. Can anybody think of a better way to utilize 50% of the reserve in the short term?
As I see it.. traders will go where they see market depth.. and as already noted in other places on the forum, this would make ours by orders of magnitude deeper than others.
If we are talking about a USD market where people can buy at reasonable premium then it will become adoptable by merchants and we then have a settlement vehicle without counterparty risk that merchants can use without having to each create their own UIAs and keeping the wealth outside the DEX. Of course this depends on if my question on #2 is indeed the case.
If we go ahead with this.. I would like to see a nicely coordinated marketing effort both before and after.
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This is a redistribution of future wealth to bitassets' holders. It encourages bitasset hoarding. How does it solve the liquidity problem when users are hoarding their bitassets eg bitUSD (ie shorters cannot close their position when users do not wish to sell their bitUSD) ?
it helps the liquidity problem by forcing savers to buy their assets on an illiquid market. the potential yield overcomes this cost and does promote hoarding of bitassets on the smartchain. giving people a great reason to buy the asset is step 1 (learning to walk). the longer the assets are held, the less impact the trading spread has overall.
i think we should take BM up on his offer to code his provision for liquidity incentive but code in a provision for yield on assets simultaneously
half the money goes to yield and the other half toward this type of liquidity subsidy
chinese only hate dilution if they are not on the receiving end
give them a simple buy and hold option to gain yield and they will not complain about this dilution.
this is no different than any current staking POS mechanism therefore nobody could call it a ponzi without saying that ether is going to be a ponzi when Casper is implemented and all the whales begin harvesting their yield. in fact you could argue that this is the one component that is missing from our mechanism that the crypto community at large demands!
ETH
DASH
PPC all offer it. so why dont we!!
the market is speakig but are we listening?
The elimination of yield on bitUSD is one of the major changes 2.0 ushered in. All the promotion of how the BitShares DEX was able to replace your bank account WENT OUT THE WINDOW with 2.0. Now you want to bring it back? Hey, I was never on board with eliminating it in the first place, but this is yet another example of a unilateral, centralized decision.
However, before we do yet another about face and re-implement this, let's have a thorough discussion about the pros and cons of yield / interest on BitAssets. CNX had their reasons for removing it, but were they valid? What data metrics can we isolate to help understand the value (or lack thereof) of this, now that we have some history of both yielding and non-yielding BitAssets.
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+5% +5% +5%, great, good idea, i like it, just do it!
My man 8) +5%
I have a few questions.
1. If we do this, and things seem to go sideways, wouldn't it be just a matter of the Committee adjusting the rate? We can put an end to the experiment going wrong. Or even more direct, shareholders can vote out the Worker, In which case, the risk is manageable on two fronts.
Yes, it could easily be adjusted/removed, but it might be a good idea to commit to a certain dilution rate experiment for a few months at least, so people know it's worth their while to make the effort.
2. Would this mean a much tighter peg to real USD? ie. a premium in the neighbourhood of 1% instead of 50%?
It would be a big incentive to new longs so besides yield harvesting, we would see a genuine increase in new demand on the buy side, we may even have to drop forced settlement to 98/99%, which I'm in favour of anyway to bring the longs closer to the 1-1 peg and not too far above.
Lowering the forced settlement number is a positive for the shorts so we bring them slightly tighter with that, tonyk's suggestion of splitting the yield so some goes to shorts should incentivize them some more still. Currently though the market isn't excited about BTS future price (having been in a fairly long general downtrend) so if there's a gap in just applying this strategy it's that we may not get enough new demand on the short side and some may still be a little further from the longs than we'd like.
3. What will it cost us if we don't do this?
If we do it we likely rapidly become the Crypto USD market leader in CAP and users, if we don't our current market share of 2% may increase with liquidity measures but not as significantly or rapidly on those metrics. So it costs us market leader position at a time when there is a lot of competition, already 4/5 Crypto USD's on the market, rune's maker and presumably other Ethereum based price stable options coming on soon.
4. Can anybody think of a better way to utilize 50% of the reserve in the short term?
Some are fans of the liquidity specific measures. I like this because the definite benefits are higher imo but the cost is fairly low/neutral to shareholders if they make the effort to yield harvest.
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However, before we do yet another about face and re-implement this, let's have a thorough discussion about the pros and cons of yield / interest on BitAssets. CNX had their reasons for removing it, but were they valid? What data metrics can we isolate to help understand the value (or lack thereof) of this, now that we have some history of both yielding and non-yielding BitAssets.
I believe a key reason for removing it was yield harvesting which made BitAsset yield approach zero & with a lot people hoarding.
Providing yield on USD doesn't work because of yield harvesting, people would create USD and sit on it until the rate of return approached 0.
Using dilution to fund yield hopefully changes that though. While my maths may be bad/overly simplisitic here, but say we used 2.5% dilution to fund BitAsset yield and BTS had a $10 million CAP, at most $5 million BitUSD would be created as the other circa $5 million would need to be short BitUSD. 2.5% of $10 million is $250 000 which is +5% on $5 million BitUSD. So you're probably going to have yield that is equal to or higher than +5% at that CAP & not approach zero.
Also even if there's some hoarding, I would rather have the majority of BTS shareholders having a BitUSD account and have the highest USD CAP in crypto as opposed to the $98 000 CAP BitUSD has at the moment. It would also remove a lot of BTS from the centralized exchanges.
http://www.ofnumbers.com/2014/11/22/approximately-70-of-all-bitcoins-have-not-moved-in-6-or-more-months/
I've cited an article referencing how a high percentage of Bitcoin is hoarded but yet there is a reasonable amount of liquidity and high utility (accepted by over 100 000 merchants) because they are attracted to that potential market in terms of value and number of users and the benefits of Bitcoin, so I speculate it would be similar for BitUSD, especially as stable BitUSD is much better for merchants than volatile Bitcoin.
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I believe a key reason for removing it was yield harvesting which made BitAsset yield approach zero & with a lot people hoarding.
Providing yield on USD doesn't work because of yield harvesting, people would create USD and sit on it until the rate of return approahed 0.
/quote]
Huh?
I mean, what did he THINK would happen? You offer an incentive and people move in that direction. The yield worked perfectly to attract buyers of BitUSD / BTS. Why else would you promote BitShares as an alternative to a bank? It serves a least 3 purposes:
1) It increases BitShares marketcap
2) It de-funds the banking cartel.
3) It helps people preserve their wealth from a shaky and corrupt banking system.
Granted, item 2 is not even a drop in the bucket, and would have virtually no affect on the "health" of the mainstream financial system, but it IS aligned with our long term goals and philosophy to be an alternative to mainstream banks. It isn't a short term goal.
Whether or not you provide savings incentives doesn't improve liquidity directly. For that you need to have a variety of products or services people want to trade for, and BitAssets are just one tool for those trades. Look at BitAssets as currency and it's clear you must have some to trade, but what are you trading for? The currency is the the medium to facilitate trade, BitAssets being just one of them. This is why tonyk's idea initially sounded like genius, making BitUSD the center of the trading universe. As has been pointed out, it suffers from other concerns that make that approach a non-starter IMO.
Seems to me with the advent of stealth just around the corner we have an opportunity to attract a lot of capitol into the system if we offer some type of yield. As was pointed out earlier if the yield rate is a parameter the committee / shareholders can set it could be tweaked as necessary.
How does BitShares stack up against the competition as a safe haven for wealth? What level of dividend / yield does DASH offer? What about others?
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This is why tonyk's idea initially sounded like genius, making BitUSD the center of the trading universe. As has been pointed out, it suffers from other concerns that make that approach a non-starter IMO.
Do you mind posting in the thread in question, the concerns you find significant and make the idea a 'non-starter'? Thanks
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I'm all for yield, but i think it should be separate from this liquidity project. I think the idea of setting up a treasure bill or bond that only accepts bitassets or initially just bitusd should be used for yield. When people create bitassets they either sit on them or sell them back into the market. Why not have a bond/bill for people to place their newly created bitassets into that can generate a return for them.
Better yet, have the option at short creation to send thenewly crerated bitassets directly to a bond/bill.
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I'm all for yield, but i think it should be separate from this liquidity project. I think the idea of setting up a treasure bill or bond that only accepts bitassets or initially just bitusd should be used for yield. When people create bitassets they either sit on them or sell them back into the market. Why not have a bond/bill for people to place their newly created bitassets into that can generate a return for them.
Better yet, have the option at short creation to send thenewly crerated bitassets directly to a bond/bill.
This is good
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I am thinking when shorting there can be an option to receive the short asset or the equivalent in treasury bills. We can call it the "SmartBond".
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Let's not forget, developing this idea will not come cheap. That is a significant reason to consider the proposal by BM where he offerred to develop and implement it for free.
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They offered the liquidity maker for free. Yield wasn't part of the offer.
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+5% +5% +5%, great, good idea, i like it, just do it!
My man 8) +5%
I'd like to say: don't waste time on that guy. Most of his posts are same, no matter what the OPs are talking about.
As a side effect, most of replies to his posts are ignored by me (I may have missed something).
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They offered the liquidity maker for free. Yield wasn't part of the offer.
Yeah it's probably best not to do them at the same time so people aren't confused as to which measure is actually producing the best most cost-effective results.
The liquidity operation requires an additional 2-2.5 BTC of new BTS demand per day to be self sustaining.
I'm also not sure that it won't be slightly gamed and also whether it will be enough of a USP over Uphold/NuBits to attract that level of new demand every day initially. I still think overall it will be a net positive but not a significant one and would probably prefer if it was started for half the cost.
The yield operation is fairly circular in cost in that any shareholder can mitigate the cost by yield harvesting and it has the tangible benefit of removing BTS from exchanges, making BitUSD the leader by CAP and number of users and gives BitUSD a USP no-one else has atm.
So I think the cost/benefit ratio is huge and when people see those metrics increasing and when we can tell everyone hey BitUSD offers +5%, the net BTS gains will be very big indeed. So it's probably best it's not started at the same time as the liquidity operation because people would be unclear which measure was being successful at increasing the value of BTS.
I also think now that it's been laid out we'll see competitors offering it BitAsset yield very much the same way as I mentioned they offer POS minting, in that it's a fairly circular/neutral cost that can be easily mitigated. So I predict competitors will add it this year & we'll be forced to anyway to stay competitive. But just like with existing competitors we won't be the market leader with attention and network effect that comes from doing it first so by then its impact will be fairly muted so hopefully we can end up testing it before then.
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control bitAsset bitcny bitusd……
dump bts
Lack of collateral
bts fucked over
bitCNY bitUSD holder win
all fucked
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control bitAsset bitcny bitusd……
dump bts
Lack of collateral
bts fucked over
bitCNY bitUSD holder win
all fucked
1. Sudo 100 000 BTS - 2.5% dilution = 97 500 BTS :'(
2. Sudo Buy 50 000 BTS BitCNY + Sudo Short 50 000 BTS BitCNY = No dilution = Big BitCNY :D
从一个小种子强大的树干可能会增长
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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.
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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?
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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.
those POS coins do not generate yield on derived assets, so they can provide whatever fixed yield they
want.
in BTS 1.0 the yield was financed from shorters, it was a bit ponzi too, but not so evident.
Whatever yield, the dilution has to be fianced /compensated by new investors buying in,
otherwise the value of single BTS would go down and no one would like that.
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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.
Whatever yield, the dilution has to be fianced /compensated by new investors buying in,
otherwise the value of single BTS would go down and no one would like that.
This is not true imo. When PPC offers 1% minting rewards. It doesn't have to be funded by new investors coming in.
All existing coin holders have to do is put their coins into minting and the net result is neutral.
Similarly when BTS offers 2.5% minting rewards. It doesn't have to be funded by new investors coming in.
All existing coin holders have to do is put their coins into minting (yield harvesting) and the net result is neutral.
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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.
Whatever yield, the dilution has to be fianced /compensated by new investors buying in,
otherwise the value of single BTS would go down and no one would like that.
This is not true imo. When PPC offers 1% minting rewards. It doesn't have to be funded by new investors coming in.
All existing coin holders have to do is put their coins into minting and the net result is neutral.
Similarly when BTS offers 2.5% minting rewards. It doesn't have to be funded by new investors coming in.
All existing coin holders have to do is put their coins into minting (yield harvesting) and the net result is neutral.
because in crypto 1% means nothing when the coin fluctuates hundreds % in value, but imagine you would mint 10% every day. the value of the coin
would go down unless someone would be be buying them or the minters would keep them all.
The point is lets not pretend this is magic money where you can create more of it
without having new investors coming in and keep the price steady.
In bitcoin it is the same. There have to be new buyers for new minted coins.
But bitcoin does not provide yields to the holders and especially not on derived assets.
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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.
Whatever yield, the dilution has to be fianced /compensated by new investors buying in,
otherwise the value of single BTS would go down and no one would like that.
This is not true imo. When PPC offers 1% minting rewards. It doesn't have to be funded by new investors coming in.
All existing coin holders have to do is put their coins into minting and the net result is neutral.
Similarly when BTS offers 2.5% minting rewards. It doesn't have to be funded by new investors coming in.
All existing coin holders have to do is put their coins into minting (yield harvesting) and the net result is neutral.
because in crypto 1% means nothing when the coin fluctuates hundreds % in value, but imagine you would mint 10% every day. the value of the coin
would go down unless someone would be be buying them or the minters would keep them all.
The point is lets not pretend this is magic money where you can create more of it
without having new investors coming in and keep the price steady.
In bitcoin it is the same. There have to be new buyers for new minted coins.
But bitcoin does not provide yields to the holders and especially not on derived assets.
In bitcoin it is the same. There have to be new buyers for new minted coins.
In Bitcoin there have to be buyers for newly minted coins because those coins don't go to existing Bitcoin holders.
In POS minting rewards the coins go to existing coin holders provided they take part in the minting process so there don't have to be new buyers for the process to be net neutral.
If you view BitAsset yield harvesting as the minting process you'll see the 2.5% BTS minting rewards proposed in this thread also go to existing coin holders provided they take part in the minting process.
(Yield harvesting is where you are both short & long the BitAsset at the same time, so your underlying BTS position effectively stays the same.)
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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.
those POS coins do not generate yield on derived assets, so they can provide whatever fixed yield they
want.
in BTS 1.0 the yield was financed from shorters, it was a bit ponzi too, but not so evident.
Whatever yield, the dilution has to be fianced /compensated by new investors buying in,
otherwise the value of single BTS would go down and no one would like that.
Dont forget that the 'dilution' is taken from the reserve fund which is filled up again by customers of the system. So its not 'only' the newcomers that would pay for the yield
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I like the idea of Smartcoins earning interest. However, I prefer that the interest be paid from a percentage of the fee pool like in BTS1.0
If I had to choose in between dilution for liquidity, or dilution for Smartcoin interest, then I would choose the former becuase I think it is more important to the success of Bitshares.
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I like the idea of Smartcoins earning interest. However, I prefer that the interest be paid from a percentage of the fee pool like in BTS1.0
If I had to choose in between dilution for liquidity, or dilution for Smartcoin interest, then I would choose the former becuase I think it is more important to the success of Bitshares.
I don't think it's a choice you have to make. POS minting rewards are a fairly neutral cost so they don't have to severely limit your ability in other areas.
You're a fan of Nubits liquidity right? This could also be a part of a two step liquidity process that sees us create huge buy and sell BitUSD walls that new BitUSD holders can easily participate in and benefit from.
Step 1: Implement this proposal, BTS minting rewards, and you will create $Millions of BitUSD for very low/fairly neutral cost.
Step 2: Implement a trustless Nubits liquidity style pool, possibly with the help of an existing Nubits pool. Then we can send our BitUSD to the trustless pool and participate in the process and earn additional interest. https://nubits.com/current-liquidity-pools
Result: We will have created a BitUSD with millions in circulation and large buy and sell walls and the main cost will have been the subsidy we give to the liquidity pool.
If you're in contact with anyone there, I would be particularly interested as to whether a liquidity pool could do the job better and for less than the current liquidity proposal?
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I like the idea of Smartcoins earning interest. However, I prefer that the interest be paid from a percentage of the fee pool like in BTS1.0
If I had to choose in between dilution for liquidity, or dilution for Smartcoin interest, then I would choose the former becuase I think it is more important to the success of Bitshares.
I don't think it's a choice you have to make.
Perhaps you are right.
I have an English paper due tomorrow that I haven't started on. I better get to it... I'll be back next week to discuss more. :)
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I like the idea of Smartcoins earning interest. However, I prefer that the interest be paid from a percentage of the fee pool like in BTS1.0
If I had to choose in between dilution for liquidity, or dilution for Smartcoin interest, then I would choose the former becuase I think it is more important to the success of Bitshares.
I don't think it's a choice you have to make. POS minting rewards are a fairly neutral cost so they don't have to severely limit your ability in other areas.
You're a fan of Nubits liquidity right? This could also be a part of a two step liquidity process that sees us create huge buy and sell BitUSD that new BitUSD holders can easily participate and benefit.
Step 1: Implement this proposal, BTS minting rewards, and you will create $Millions of BitUSD for very low/fairly neutral cost.
Step 2: Implement a trustless Nubits liquidity style pool, possibly with the help of an existing Nubits pool. Then we can send our BitUSD to the trustless pool and participate in the process and earn additional interest. https://nubits.com/current-liquidity-pools
Result: We will have created a BitUSD with millions in circulation and large buy and sell walls and the main cost will have been the subsidy we give to the liquidity pool.
If you're in contact with anyone there, I would be particularly interested as to whether a liquidity pool could do the job better and for less than the current liquidity proposal?
@Empirical1.2: I love your ideas on offering yield to incentivize the creation of BitAssets. In my estimation there is NOTHING more important we could be doing right now than ensuring many people have BitAssets in their possession that they'll be ready to spend once merchants start coming online with @kenCode's POS systems.
We need to foster an environment where an ecosystem can spring up, and we need to do it NOW. For that reason, I would personally be likely to dedicate at least 1M BTS of my own funds to a liquidity pool such as the one you're describing. Although of course I would first need to better understand the mechanics of it all, as well as the full implications for individual shareholders in different circumstances (i.e. Those yield harvesting, those not. Those participating in the liquidity pool, those not. Those bullish on BTS, those bearish. Etc).
By the way, how effective do you think this would be if we offered a smaller % on a trial basis, perhaps 2-3% instead of 5%, just to prove the concept? Actually, maybe 2-3% would be fully sufficient, especially as we move toward an environment when zero or negative bank interest rates become the norm? Either way, could the % be dynamic based on different needs in different market conditions? And finally, do you see the nubits-style liquidity pool you're proposing as compatible with the idea of rewarding market makers for liquidity (as is being discussed on another thread)? Thanks in advance.
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I like the idea of Smartcoins earning interest. However, I prefer that the interest be paid from a percentage of the fee pool like in BTS1.0
If I had to choose in between dilution for liquidity, or dilution for Smartcoin interest, then I would choose the former becuase I think it is more important to the success of Bitshares.
I don't think it's a choice you have to make.
Perhaps you are right.
I have an English paper due tomorrow that I haven't started on. I better get to it... I'll be back next week to discuss more. :)
@CoinHoarder: I know you don't always believe people are listening to you, but they are. Your input is valuable. So I hope you return quickly from writing your paper and continue to contribute to these extremely important topics.
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How effective do you think this would be if we offered a smaller % on a trial basis, perhaps 2-3% instead of 5%, just to prove the concept? Actually, maybe 2-3% would be fully sufficient, especially as we move toward an environment when zero or negative bank interest rates become the norm? Either way, could the % be dynamic based on different needs in different market conditions?
Yeah 5% or greater, was the variable yield, BitAssets would hopefully achieve if you offered BTS minting rewards at 2.5%. However you could trial it at less than that, say 1% and probably still achieve a large increase in total BitUSD and number of holders. (At a fairly neutral cost thanks to yield harvesting.) It could also be dynamic in that it could be changed based on results, also with some of the rewards going to the short side as tonyk suggested earlier in the thread.
(1% dilution going to BiAsset yield would be $100 000 a year, which should still incentivize many millions of BitUSD)
For that reason, I would personally be likely to dedicate at least 1M BTS of my own funds to a liquidity pool such as the one you're describing. Although of course I would first need to better understand the mechanics of it all, as well as the full implications for individual shareholders in different circumstances (i.e. Those yield harvesting, those not. Those participating in the liquidity pool, those not. Those bullish on BTS, those bearish. Etc).
Looking at the NuBits model we should be able to create fairly low risk pools with fairly high rates of interest for very low dilution.
It may be cheaper though because we'll all be yield harvesting anyway and have BitUSD we'd be willing to contribute for additional yield.
I don't know much about the mechanics so I'll see if BM, experienced market makers and perhaps some existing NuPool operators can comment to give us an idea of the cost/benefit vs. other approaches.
@Empirical1.2: I love your ideas on offering yield to incentivize the creation of BitAssets. In my estimation there is NOTHING more important we could be doing right now than ensuring many people have BitAssets in their possession that they'll be ready to spend once merchants start coming online with @kenCode's POS systems.
Thanks, I agree. A lot of the Chinese market especially are opposed to dilution in general. So while I think we can make the case dilution for yield will significantly increase BitUSD CAP and number of users for a 'fairly' neutral cost. The liquidity proposals whether it's the one described in the other thread or a subsidized liquidity pool making use of the yield harvesting BitUSD are the ones that need to draw in new money to offset their cost to BTS so those are the ones I'd trial at a lower amount first to evaluate their efficacy.
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$10 a day liquidity??
@CoinHoarder I was reading an old thread of yours where nagalim commented on how NuBits achieves liquidity.
https://bitsharestalk.org/index.php/topic,20804.msg269419.html#msg269419
From what I gather, once there is a lot of BitUSD that can be directed to liquidity operations, (which there will be if we implement dilution for yield and end up creating a lot of BitUSD through yield harvesting) then we might be able to achieve thousands of dollars of liquidity for <$10 in incentives a day?
The end result is that we can get large amounts of funds (thousands of $$) by only rewarding a small, continual payout (single digit $/day). The providers take on all default and volatility risks and get rewarded for it. Everybody's happy, we make a contract, and the whole system becomes reliable and dependable for customers.
Except we won't even have the risk of bter/polo exchange default like they do as it will all be on the internal exchange
I'd suggest we start with something like $1/day until we get a real handle on the price feed.
Doesn't really sound plausible that NuBits level liquidity could be achieved so cheaply once the BitUSD funds are available, really interested to learn more.
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$10 a day liquidity??
@CoinHoarder I was reading an old thread of yours where nagalim commented on how NuBits achieves liquidity.
https://bitsharestalk.org/index.php/topic,20804.msg269419.html#msg269419
From what I gather, once there is a lot of BitUSD that can be directed to liquidity operations, (which there will be if we implement dilution for yield and end up creating a lot of BitUSD through yield harvesting) then we might be able to achieve thousands of dollars of liquidity for <$10 in incentives a day?
The end result is that we can get large amounts of funds (thousands of $$) by only rewarding a small, continual payout (single digit $/day). The providers take on all default and volatility risks and get rewarded for it. Everybody's happy, we make a contract, and the whole system becomes reliable and dependable for customers.
Except we won't even have the risk of bter/polo exchange default like they do as it will all be on the internal exchange
I'd suggest we start with something like $1/day until we get a real handle on the price feed.
Doesn't really sound plausible that NuBits level liquidity could be achieved so cheaply once the BitUSD funds are available, really interested to learn more.
For every nubit they print out of thin air in order to pay their liquidity providers (or whatever they are calling them) they demand 0.5 bitUSD, can you guys understand that? Those funds(bitUSD) will be used WHEN their ponzi starts to collapse, they need real money(bitUSD) to back SOME of their monopoly money.
So far they have grabbed 500 btc as "profits" from nubits hodlers but their nushares buy support is only 23 btc(most of those btc's are "profits" and not real support), every week their "profits"(and also the real money backing nubits) are becoming lower and lower https://discuss.nubits.com/t/nsr-buyback-21-week-of-february-15-2016/3530, obviously there are not enought suckers out there and their ponzi starts to collapse. They will either have to reduce their "profits" to almost zero and stay in a fractional reserve state or keep grabbing more money as profits and colapse.
We can probably steal some of their ideas but please stay away from those crooks.
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$10 a day liquidity??
@CoinHoarder I was reading an old thread of yours where nagalim commented on how NuBits achieves liquidity.
https://bitsharestalk.org/index.php/topic,20804.msg269419.html#msg269419
From what I gather, once there is a lot of BitUSD that can be directed to liquidity operations, (which there will be if we implement dilution for yield and end up creating a lot of BitUSD through yield harvesting) then we might be able to achieve thousands of dollars of liquidity for <$10 in incentives a day?
The end result is that we can get large amounts of funds (thousands of $$) by only rewarding a small, continual payout (single digit $/day). The providers take on all default and volatility risks and get rewarded for it. Everybody's happy, we make a contract, and the whole system becomes reliable and dependable for customers.
Except we won't even have the risk of bter/polo exchange default like they do as it will all be on the internal exchange
I'd suggest we start with something like $1/day until we get a real handle on the price feed.
Doesn't really sound plausible that NuBits level liquidity could be achieved so cheaply once the BitUSD funds are available, really interested to learn more.
For every nubit they print out of thin air in order to pay their liquidity providers (or whatever they are calling them) they demand 0.5 bitUSD, can you guys understand that? Those funds(bitUSD) will be used WHEN their ponzi starts to collapse, they need real money(bitUSD) to back SOME of their monopoly money.
So far they have grabbed 500 btc as "profits" from nubits hodlers but their nushares buy support is only 23 btc(most of those btc's are "profits" and not real support), every week their "profits"(and also the real money backing nubits) are becoming lower and lower https://discuss.nubits.com/t/nsr-buyback-21-week-of-february-15-2016/3530, obviously there are not enought suckers out there and their ponzi starts to collapse. They will either have to reduce their "profits" to almost zero and stay in a fractional reserve state or keep grabbing more money as profits and colapse.
We can probably steal some of their ideas but please stay away from those crooks.
I'm not advocating taking them up on their offer in that thread (The silly 0.5 BitUSD thing) or endorsing the way NuBits are created, (which I agree sucks) but I am interested in the cost to maintain their buy and sell walls you see on the exchanges.
It appears to me their liquidity pools offer NuBits owners circa 0.2% a day to send their NuBits to the liquidity pools and create the buy and sell walls you see in the tight range around the peg. That particular method appears to be cheaper & possibly more effective than the liquidity proposal described here which would cost BTS circa $1000 per day https://bitsharestalk.org/index.php/topic,21544.0.html
So our BitUSD would be fully backed and created properly via the idea in this thread - Diluting BTS for BitAsset Yield - (All you have to do to avoid dilution is yield harvest BitUSD) Then we will have millions in fully collateralized BitUSD yield harvesting. Then for the same level of incentive, 0.2% a day we could entice some of that BitUSD into liquidity/market making operations and create cost effective buy and sell walls around our peg.
As I say I will wait to hear from others if that is actually the case, but that is the part of the approach that interests me.
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$10 a day liquidity??
@CoinHoarder I was reading an old thread of yours where nagalim commented on how NuBits achieves liquidity.
https://bitsharestalk.org/index.php/topic,20804.msg269419.html#msg269419
From what I gather, once there is a lot of BitUSD that can be directed to liquidity operations, (which there will be if we implement dilution for yield and end up creating a lot of BitUSD through yield harvesting) then we might be able to achieve thousands of dollars of liquidity for <$10 in incentives a day?
The end result is that we can get large amounts of funds (thousands of $$) by only rewarding a small, continual payout (single digit $/day). The providers take on all default and volatility risks and get rewarded for it. Everybody's happy, we make a contract, and the whole system becomes reliable and dependable for customers.
Except we won't even have the risk of bter/polo exchange default like they do as it will all be on the internal exchange
I'd suggest we start with something like $1/day until we get a real handle on the price feed.
Doesn't really sound plausible that NuBits level liquidity could be achieved so cheaply once the BitUSD funds are available, really interested to learn more.
For every nubit they print out of thin air in order to pay their liquidity providers (or whatever they are calling them) they demand 0.5 bitUSD, can you guys understand that? Those funds(bitUSD) will be used WHEN their ponzi starts to collapse, they need real money(bitUSD) to back SOME of their monopoly money.
So far they have grabbed 500 btc as "profits" from nubits hodlers but their nushares buy support is only 23 btc(most of those btc's are "profits" and not real support), every week their "profits"(and also the real money backing nubits) are becoming lower and lower https://discuss.nubits.com/t/nsr-buyback-21-week-of-february-15-2016/3530, obviously there are not enought suckers out there and their ponzi starts to collapse. They will either have to reduce their "profits" to almost zero and stay in a fractional reserve state or keep grabbing more money as profits and colapse.
We can probably steal some of their ideas but please stay away from those crooks.
I'm not advocating taking them up on their offer in that thread (The silly 0.5 BitUSD thing) or endorsing the way NuBits are created, (which I agree sucks) but I am interested in the cost to maintain their buy and sell walls you see on the exchanges.
It appears to me their liquidity pools offer NuBits owners circa 0.2% a day to send their NuBits to the liquidity pools and create the buy and sell walls you see in the tight range around the peg. That particular method appears to be cheaper & possibly more effective than the liquidity proposal described here which would cost BTS circa $1000 per day https://bitsharestalk.org/index.php/topic,21544.0.html
So our BitUSD would be fully backed and created properly via the idea in this thread - Diluting BTS for BitAsset Yield - (All you have to do to avoid dilution is yield harvest BitUSD) Then we will have millions in fully collateralized BitUSD yield harvesting. Then for the same level of incentive, 0.2% a day we could entice some of that BitUSD into liquidity/market making operations and create cost effective buy and sell walls around our peg.
As I say I will wait to hear from others if that is actually the case, but that is the part of the approach that interests me.
I would love to participate in such a liquidity pool for ~.2%/day return. How variable would that be, and what are the risks, though? Also, how do you see other BitAssets fitting into this whole creation-by-yield-harvesting scenario, especially BitCNY? Could we do the same exact thing for BitCNY and the others? Also, some have suggested perhaps having BitCNY and other BitAssets trade only against BitUSD. Is that even possible in your scenario where BitAssets are created via yield harvesting? And would it even be necessary to have other BitAssets trade only against BitUSD if the BitUSD liquidity pool you've described works as planned?
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$10 a day liquidity??
@CoinHoarder I was reading an old thread of yours where nagalim commented on how NuBits achieves liquidity.
https://bitsharestalk.org/index.php/topic,20804.msg269419.html#msg269419
From what I gather, once there is a lot of BitUSD that can be directed to liquidity operations, (which there will be if we implement dilution for yield and end up creating a lot of BitUSD through yield harvesting) then we might be able to achieve thousands of dollars of liquidity for <$10 in incentives a day?
The end result is that we can get large amounts of funds (thousands of $$) by only rewarding a small, continual payout (single digit $/day). The providers take on all default and volatility risks and get rewarded for it. Everybody's happy, we make a contract, and the whole system becomes reliable and dependable for customers.
Except we won't even have the risk of bter/polo exchange default like they do as it will all be on the internal exchange
I'd suggest we start with something like $1/day until we get a real handle on the price feed.
Doesn't really sound plausible that NuBits level liquidity could be achieved so cheaply once the BitUSD funds are available, really interested to learn more.
For every nubit they print out of thin air in order to pay their liquidity providers (or whatever they are calling them) they demand 0.5 bitUSD, can you guys understand that? Those funds(bitUSD) will be used WHEN their ponzi starts to collapse, they need real money(bitUSD) to back SOME of their monopoly money.
So far they have grabbed 500 btc as "profits" from nubits hodlers but their nushares buy support is only 23 btc(most of those btc's are "profits" and not real support), every week their "profits"(and also the real money backing nubits) are becoming lower and lower https://discuss.nubits.com/t/nsr-buyback-21-week-of-february-15-2016/3530, obviously there are not enought suckers out there and their ponzi starts to collapse. They will either have to reduce their "profits" to almost zero and stay in a fractional reserve state or keep grabbing more money as profits and colapse.
We can probably steal some of their ideas but please stay away from those crooks.
I'm not advocating taking them up on their offer in that thread (The silly 0.5 BitUSD thing) or endorsing the way NuBits are created, (which I agree sucks) but I am interested in the cost to maintain their buy and sell walls you see on the exchanges.
It appears to me their liquidity pools offer NuBits owners circa 0.2% a day to send their NuBits to the liquidity pools and create the buy and sell walls you see in the tight range around the peg. That particular method appears to be cheaper & possibly more effective than the liquidity proposal described here which would cost BTS circa $1000 per day https://bitsharestalk.org/index.php/topic,21544.0.html
So our BitUSD would be fully backed and created properly via the idea in this thread - Diluting BTS for BitAsset Yield - (All you have to do to avoid dilution is yield harvest BitUSD) Then we will have millions in fully collateralized BitUSD yield harvesting. Then for the same level of incentive, 0.2% a day we could entice some of that BitUSD into liquidity/market making operations and create cost effective buy and sell walls around our peg.
As I say I will wait to hear from others if that is actually the case, but that is the part of the approach that interests me.
I would love to participate in such a liquidity pool for ~.2%/day return. How variable would that be, and what are the risks, though? Also, how do you see other BitAssets fitting into this whole creation-by-yield-harvesting scenario, especially BitCNY? Could we do the same exact thing for BitCNY and the others? Also, some have suggested perhaps having BitCNY and other BitAssets trade only against BitUSD. Is that even possible in your scenario where BitAssets are created via yield harvesting? And would it even be necessary to have other BitAssets trade only against BitUSD if the BitUSD liquidity pool you've described works as planned?
I would love to participate in such a liquidity pool for ~.2%/day return. How variable would that be, and what are the risks, though?
A risk is that the market making operation could lose money in trending markets depending on the spread. https://nupool.net/index.php/Risks_&_Chances
Hedging: Traders might be able to successfully hedge against you. This means that people speculate on the BTC BTS price movement and buy NBT BitUSD from you at a low price and sell them back to you when the price is high (or vice versa). Said behaviour might result in losses for the liquidity provider.
A risk is that you could lose money if the BTS price goes down, but I'd be assuming most people participating would be long term bullish on BTS. http://nulagoon.com/lqpools.html
It would be interesting to hear from someone who has participated in the NuBits pools to find out how variable/risky that rate of return is and if there other elements to be considered. I have no experience in market making so I would be looking to BM, experienced market makers and others to evaluate the merits of this approach.
Also, how do you see other BitAssets fitting into this whole creation-by-yield-harvesting scenario, especially BitCNY? Could we do the same exact thing for BitCNY and the others? Also, some have suggested perhaps having BitCNY and other BitAssets trade only against BitUSD. Is that even possible in your scenario where BitAssets are created via yield harvesting? And would it even be necessary to have other BitAssets trade only against BitUSD if the BitUSD liquidity pool you've described works as planned?
I imagine shareholders could apply dilution for yield to a single BitAsset or multiple BitAssets (incl. BitCNY) with pretty much the same outcome. (You just mitigate the dilution on your BTS stake by yield harvesting.) However there may be value in just bootstrapping 1 BitAsset to start. You could have everything trading against BitUSD in this approach which could help liquidity and bootstrapping the key Smartcoin, though I don't think it would be necessary.
But yeah I would be pretty excited if I believed we'd implement dilution for yield, because we'd become crypto USD market leader by CAP and number of users virtually overnight for a fairly neutral cost, with a kick ass decentralized exchange and be able to advertise yield. If we could have strong buy and sell walls for a fairly low cost too, (The other $1000 a day proposal seems pretty high to me) by applying the same market making techniques that work for Nubits, once we have most BTS shareholders sitting on yield harvesting USD looking for something to do with it, we'd have liquidity too. Then it's on like Donkey Kong.
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$10 a day liquidity??
@CoinHoarder I was reading an old thread of yours where nagalim commented on how NuBits achieves liquidity.
https://bitsharestalk.org/index.php/topic,20804.msg269419.html#msg269419
From what I gather, once there is a lot of BitUSD that can be directed to liquidity operations, (which there will be if we implement dilution for yield and end up creating a lot of BitUSD through yield harvesting) then we might be able to achieve thousands of dollars of liquidity for <$10 in incentives a day?
The end result is that we can get large amounts of funds (thousands of $$) by only rewarding a small, continual payout (single digit $/day). The providers take on all default and volatility risks and get rewarded for it. Everybody's happy, we make a contract, and the whole system becomes reliable and dependable for customers.
Except we won't even have the risk of bter/polo exchange default like they do as it will all be on the internal exchange
I'd suggest we start with something like $1/day until we get a real handle on the price feed.
Doesn't really sound plausible that NuBits level liquidity could be achieved so cheaply once the BitUSD funds are available, really interested to learn more.
For every nubit they print out of thin air in order to pay their liquidity providers (or whatever they are calling them) they demand 0.5 bitUSD, can you guys understand that? Those funds(bitUSD) will be used WHEN their ponzi starts to collapse, they need real money(bitUSD) to back SOME of their monopoly money.
So far they have grabbed 500 btc as "profits" from nubits hodlers but their nushares buy support is only 23 btc(most of those btc's are "profits" and not real support), every week their "profits"(and also the real money backing nubits) are becoming lower and lower https://discuss.nubits.com/t/nsr-buyback-21-week-of-february-15-2016/3530, obviously there are not enought suckers out there and their ponzi starts to collapse. They will either have to reduce their "profits" to almost zero and stay in a fractional reserve state or keep grabbing more money as profits and colapse.
We can probably steal some of their ideas but please stay away from those crooks.
I'm not advocating taking them up on their offer in that thread (The silly 0.5 BitUSD thing) or endorsing the way NuBits are created, (which I agree sucks) but I am interested in the cost to maintain their buy and sell walls you see on the exchanges.
It appears to me their liquidity pools offer NuBits owners circa 0.2% a day to send their NuBits to the liquidity pools and create the buy and sell walls you see in the tight range around the peg. That particular method appears to be cheaper & possibly more effective than the liquidity proposal described here which would cost BTS circa $1000 per day https://bitsharestalk.org/index.php/topic,21544.0.html
So our BitUSD would be fully backed and created properly via the idea in this thread - Diluting BTS for BitAsset Yield - (All you have to do to avoid dilution is yield harvest BitUSD) Then we will have millions in fully collateralized BitUSD yield harvesting. Then for the same level of incentive, 0.2% a day we could entice some of that BitUSD into liquidity/market making operations and create cost effective buy and sell walls around our peg.
As I say I will wait to hear from others if that is actually the case, but that is the part of the approach that interests me.
I would love to participate in such a liquidity pool for ~.2%/day return. How variable would that be, and what are the risks, though? Also, how do you see other BitAssets fitting into this whole creation-by-yield-harvesting scenario, especially BitCNY? Could we do the same exact thing for BitCNY and the others? Also, some have suggested perhaps having BitCNY and other BitAssets trade only against BitUSD. Is that even possible in your scenario where BitAssets are created via yield harvesting? And would it even be necessary to have other BitAssets trade only against BitUSD if the BitUSD liquidity pool you've described works as planned?
I would love to participate in such a liquidity pool for ~.2%/day return. How variable would that be, and what are the risks, though?
A risk is that the market making operation could lose money in trending markets depending on the spread. https://nupool.net/index.php/Risks_&_Chances
Hedging: Traders might be able to successfully hedge against you. This means that people speculate on the BTC BTS price movement and buy NBT BitUSD from you at a low price and sell them back to you when the price is high (or vice versa). Said behaviour might result in losses for the liquidity provider.
A risk is that you could lose money if the BTS price goes down, but I'd be assuming most people participating would be long term bullish on BTS. http://nulagoon.com/lqpools.html
It would be interesting to hear from someone who has participated in the NuBits pools to find out how variable/risky that rate of return is and if there other elements to be considered. I have no experience in market making so I would be looking to BM, experienced market makers and others to evaluate the merits of this approach.
Also, how do you see other BitAssets fitting into this whole creation-by-yield-harvesting scenario, especially BitCNY? Could we do the same exact thing for BitCNY and the others? Also, some have suggested perhaps having BitCNY and other BitAssets trade only against BitUSD. Is that even possible in your scenario where BitAssets are created via yield harvesting? And would it even be necessary to have other BitAssets trade only against BitUSD if the BitUSD liquidity pool you've described works as planned?
I imagine shareholders could apply dilution for yield to a single BitAsset or multiple BitAssets (incl. BitCNY) with pretty much the same outcome. (You just mitigate the dilution on your BTS stake by yield harvesting.) However there may be value in just bootstrapping 1 BitAsset to start. You could have everything trading against BitUSD in this approach which could help liquidity and bootstrapping the key Smartcoin, though I don't think it would be necessary.
But yeah I would be pretty excited if I believed we'd implement dilution for yield, because we'd become crypto USD market leader by CAP and number of users virtually overnight for a fairly neutral cost, with a kick ass decentralized exchange and be able to advertise yield. If we could have strong buy and sell walls for a fairly low cost too, (The other $1000 a day proposal seems pretty high to me) by applying the same market making techniques that work for Nubits, once we have most BTS shareholders sitting on yield harvesting USD looking for something to do with it, we'd have liquidity too. Then it's on like Donkey Kong.
We could start with a 2% yield for just 1% dilution, correct? Seems like it would make good sense to do this. Question is, what would the development costs be? I assume the cost to add yield would be fairly low, whereas implementing the liquidity pool would probably be more costly. Can you see any reason why we shouldn't start with the yield and then add the liquidity pool when it's ready, or do you feel they should be launched concurrently? Really wish @bytemaster would chime in on all of this. Considering that @kenCode's mobile wallet and POS system are nearing completion, it's critical right now to incentivize BitAsset creation.