BitShares Forum
Main => General Discussion => Topic started by: Erlich Bachman on February 20, 2016, 09:43:54 am
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sorry, fav please delete this. no ponzi is a good ponzi. stan is right. we should not try to be like ETH, PPC, or any POS system
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Some comments from another thread about this:
Just voted in that poll and it looks like i'm the only one in favor of supporting yield on bitassets! One caveat to that poll is that i would remove the word "forever" in the interest payments. i'm all for a bond market with contractual yields in rates and maturity. to keep things simple, however, i think the biggest bang for the buck is in a Bitshares Treasury bond that pays out some % of fees as interest. we could start with a fixed rate product, a variable rate one depending on fees, or whatever. The key, though, is to create something that can reward investors for holding bitassets.
Best to test a prototype, maybe a bitUSD Treasury that pays interest from fees earned in the bitUSD market; the bond should only be available for purchase with bitUSD, as well, which creates circular, and hopefully growing, demand for the market over time. If that works, roll out similar bonds for the other relatively liquid markets. Imagine the PR we could get when we eventually have a Gold Bond that pays bitGOLD investors? There aren't many other places in the world you can go to simultaneously adopt gold price exposure and earn interest!
re: maturity, i'd recommend the prototype bitUSD-denominated debt instrument should be a 30-day bill instead of a longer dated bond. Those can, and should, come later. Right now we want a good mix between offering assets with yield that utilize our underlying bitassets and turnover to keep things as liquid as possible.
https://bitsharestalk.org/index.php/topic,21544.msg280637.html#msg280637
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Not much traction in the poll yet but I voted for option 3. I do think we ought to discuss this more before any changes are made, as I commented here. Lets hear Stan / Dan explain their logic for removing yield on BitAssets when 2.0 was launched. How's that working out for us? Can we judge that decision fairly a midst the other factors? Can we use a simple metric like amount of BitUSD held now vs. then, but adjusted proportional to marketcap / BTS price?
I voted for option 3 b/c the rationale for the experiment laid out in the OP is sound and logical, and b/c I am doubtful Stan / Dan or anyone else will seriously address the central question (with data analysis), "Should we have kept BitUSD yield when 2.0 was launched?"
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Not much traction in the poll yet but I voted for option 3. I do think we ought to discuss this more before any changes are made, as I commented here. Lets hear Stan / Dan explain their logic for removing yield on BitAssets when 2.0 was launched. How's that working out for us? Can we judge that decision fairly a midst the other factors? Can we use a simple metric like amount of BitUSD held now vs. then, but adjusted proportional to marketcap / BTS price?
I voted for option 3 b/c the rationale for the experiment laid out in the OP is sound and logical, and b/c I am doubtful Stan / Dan or anyone else will seriously address the central question (with data analysis), "Should we have kept BitUSD yield when 2.0 was launched?"
From the Lessons Learned (https://bitshares.org/blog/2015/06/08/lessons-learned-from-bitshares-0.x/) blog post:
Socialized Yield is Broken
Under BitShares the BitAsset holders receive a yield simply by holding BitUSD. This yield was between 1% and 5% APR on average. Unfortunately, yield harvesting can happen at any time by someone shorting to themselves to gain a very low risk return and undermining goal of encouraging people to buy and hold BitUSD. The yield was funded from transaction fees and by interest paid by shorts.
As we stated previously, undercharging for transactions is bad for business and BitShares was effectively earning nothing for all transactions of BitUSD because 100% of the income generated from fees was paid out to BitUSD holders as yield and nothing was left over to cover network expenses.
Charging shorts interest seemed like a good idea when there was surplus demand to short below $1.00, but in a bear market all interest is effectively 0%. Even in a bull market where there was interest paid it did not help increase liquidity because the benefits of buying the high interest short were shared with all BitUSD holders. Ultimately interest will not be paid in most circumstances and when it is paid it complicates the market.
Attempting to boost the value of BitUSD with yield is counter productive once the new approach to BitAssets is internalized and shorts know they can be force settled at the price feed at any time. Under these rules BitUSD already has a floor and paying yield on BitUSD would only serve to raise BitUSD above the floor and break the peg.
While Socialized Yield is broken, BitShares 2.0 offers a far better alternative: Collateralized Bonds. Collateralized Bonds enable arbitrary shorting between any two assets, guaranteed interest, and no risk of being force settled. This system privatizes the yield to individual bonds and the terms and leverage available can be far more flexible. In effect, BitUSD becomes cash and a Bond becomes a Certificate of Deposit.
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While Socialized Yield is broken, BitShares 2.0 offers a far better alternative: Collateralized Bonds. Collateralized Bonds enable arbitrary shorting between any two assets, guaranteed interest, and no risk of being force settled. This system privatizes the yield to individual bonds and the terms and leverage available can be far more flexible. In effect, BitUSD becomes cash and a Bond becomes a Certificate of Deposit.
This is exactly what i'm in favor of, collateralized bonds. i did not mean to imply i am in favor of paying interest directly to smartcoin holders simply for holding the smartcoin. we need a bond market, which was the intent with BTS 2.0 all along.
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Not much traction in the poll yet but I voted for option 3. I do think we ought to discuss this more before any changes are made, as I commented here. Lets hear Stan / Dan explain their logic for removing yield on BitAssets when 2.0 was launched. How's that working out for us? Can we judge that decision fairly a midst the other factors? Can we use a simple metric like amount of BitUSD held now vs. then, but adjusted proportional to marketcap / BTS price?
I voted for option 3 b/c the rationale for the experiment laid out in the OP is sound and logical, and b/c I am doubtful Stan / Dan or anyone else will seriously address the central question (with data analysis), "Should we have kept BitUSD yield when 2.0 was launched?"
From the Lessons Learned (https://bitshares.org/blog/2015/06/08/lessons-learned-from-bitshares-0.x/) blog post:
Socialized Yield is Broken
Under BitShares the BitAsset holders receive a yield simply by holding BitUSD. This yield was between 1% and 5% APR on average. Unfortunately, yield harvesting can happen at any time by someone shorting to themselves to gain a very low risk return and undermining goal of encouraging people to buy and hold BitUSD. The yield was funded from transaction fees and by interest paid by shorts.
As we stated previously, undercharging for transactions is bad for business and BitShares was effectively earning nothing for all transactions of BitUSD because 100% of the income generated from fees was paid out to BitUSD holders as yield and nothing was left over to cover network expenses.
Charging shorts interest seemed like a good idea when there was surplus demand to short below $1.00, but in a bear market all interest is effectively 0%. Even in a bull market where there was interest paid it did not help increase liquidity because the benefits of buying the high interest short were shared with all BitUSD holders. Ultimately interest will not be paid in most circumstances and when it is paid it complicates the market.
Attempting to boost the value of BitUSD with yield is counter productive once the new approach to BitAssets is internalized and shorts know they can be force settled at the price feed at any time. Under these rules BitUSD already has a floor and paying yield on BitUSD would only serve to raise BitUSD above the floor and break the peg.
While Socialized Yield is broken, BitShares 2.0 offers a far better alternative: Collateralized Bonds. Collateralized Bonds enable arbitrary shorting between any two assets, guaranteed interest, and no risk of being force settled. This system privatizes the yield to individual bonds and the terms and leverage available can be far more flexible. In effect, BitUSD becomes cash and a Bond becomes a Certificate of Deposit.
Thanks @Stan for setting me straight!