This is very long, but I think a very good discussion question to see how BM, Stan, and Dev Core are approaching the referral system.  I think it has great potential.  But I see the referral system having more longwithstanding success if smart contract developers can earn referral fees for the contracts they make.  My concern is in the long-run, initial referrers don't provide innovative developments as much as developers do.  Referrers can just squat on the capital effort that brought them all the users in the first place and still earn fees without providing any new value-add as compared to a developer.  They in some ways get the public to squat as many accounts as they can for them.  At least that's one way this would work. 

Last week BM spoke about specialized contracts being made for BTS.  This will allow curation and through testing and takes a "soft update" each time.  And afterwards, Cryptosile brought up a good idea that I've been pondering myself.  In one of the posts he asks:

https://bitsharestalk.org/index.php/topic,17801.0.html
"I'm curious if we could provide these two things:
1.  Allow a specific smart contract to pay 10% of fees to the creator of said smart contract.
  - This would incentivize a lot of developers to submit smart contracts and compete for inclusion into the blockchain."

To me this would spur use of smart contracts, experimentation and new products for the general public.  Sure it would be in the interest of the first referrers to create new types of contracts.  But I see this as further incentivizing development on the Bitshares blockchain and bring tools and smartcoin programs that mesh in the bitshares network.  A pie in the sky hypothetical example: someone wants to build a decentralized Uber on Bitshares can do so and profit.   But in short, incentives and rewards are further brought together.

Not to mention it would allow the little guy to profit for bringing something new to do table.  He will be able to build a  better business model to compete with the veterans and not be squatted out like the current method has it. 

Is this something that is currently being discussed or considered?  Do you think this is feasible or even possible for Bitshares under the current structure of the referral system?

If I understand you correctly: it can still work with MPA, the feed price would just be higher to incorporate value of dividends with value of stock together. In a sense your decreasing the upside of shorters ( effectively removing supply in the supply demand equation).

Quote from: Bitcoinfan on July 17, 2015, 07:14:55 pm

In the real market-- since shorts are borrowing the stocks (and therefore pay interest on that) they also have to pay any dividends that are received back to the stock owner.  If you are making a statement that no one will short because it is a bad deal, then you will have to explain why there are so many shorters in the real marketplace, despite the disadvantage you perceive?

This is not really an apples to apples comparison. 

I'm not going to get into the monetary policies that promote borrowing vast sums of money to gamble on the market.

shorting is much more important to a bitasset than it is to a stock.  Since all bitassets require someone to be short to even exist.  Shorts and longs must be balanced.

I am sure some people will short specific bitstocks even if they are required to pay dividends.  I don't think many will, and this will lead to a very shallow market.

Balancing the incentives between shorts and longs is very important.  I think we would be better off with a simple model that doesn't attempt to price in dividends.  I could very well be wrong.

I do think that adjusting the amount of stock a market pegged asset represents is an elegant solution that if done properly could be really neat.

Your objection is more against bitshares 2.0 in general since collateralization of shorts and longs aare required. So your actually pointing out a weakness is bitshares.  That it will never be as large as the market its replicating because it needs two sides to match.  That's true, but is irrelevant to dividend payouts included above the spot stock price. 

 Adding dividend to the stock price makes no difference since dividend policy are consistent and don't change often from day to day or month to month. At most a company may change their dividend rate quarterly, but that's a very active company and its not a big deal.  So if dividend policy is consistent enough for a shorter to make a bet, why would adding it on top the spot deterr shooters?  It shouldn't.  They should still short and make a bet when they believe a stock is going down.  They face the same category of costs ( when you do the math out) as a shorter would on Wall Street.   

. 

Quote from: xeroc on July 17, 2015, 06:19:55 pm

He just stated that there might be a partnership with an actual bank and didn't want to go into details ..

Great news. I will have to hear the record when it is released.

For the record, Bytemaster did this before when he spoke about partnering with Maidsafe... Ethereum.... is this another case of that remains to be seen.  Its a nice hint, but don't get too excited.


Others that could be added to that list: maybe Overstock?  Adam B Levine?  Toast coming back into the fold?  These are things that were potentials that fell through. 

@fuzzy

Can you ask @bytemaster if he is implementing @starspirit no. 2 of bitAsset valuing in the hangout tomorrow.  And if we are still 3 months away from 2.0 if we are three months away I will start a bounty.

Thank you each individual for your contribution to this thread and for kind words.

It's up to the feed producer and has can be enabled immediately out the gate with bit shares 2.0 presuming it delivers on what it promises

Quote from: Erlich Bachman on July 15, 2015, 04:47:34 pm

OP,  currently, there is no yield on smartcoins, however, if and when competitors enter this space, then we will hold a vote to see if there is enough interest around here to pay interest.

There are currently enough benefits to owning bitUSD that we don't need to add/offer more...yet.

what are the benefits of owning bitUSD? what are the costs and risks? i think we're dismantling the mechanism that tipped the balance in favor of owning bitassets. it also opens the space wide open to a competitor that sees this mistake and offers interest.

Then you come up with a way to do interest that can't be attacked and propose here.  The community is all ears.   

trezor user not affected?

MPAs are like derivatives on the underlying asset. They are not required to distribute a dividend like the underlying asset does. However, their valuation would need to reflect the value of any dividends received, otherwise the MPA is a provably inferior investment to owning the underlying asset outright (*). This may not matter as much for low dividend growth stocks, but is significant for higher dividend stocks.

Even on a dividend discount model, the price only ever reflects the valuation of future dividends. At the exact point a stock goes ex-dividend, its price falls (in theory by the value of the dividend). Apple stock holders do not lose value, because they receive the actual dividend. bitAPPLE holders would lose value, if they received no distribution, and the price was defined as the stock price. They can be compensated for this if the price is defined as an accumulation price (i.e. with dividends reinvested), rather than the actual stock price.
As an aside, I would like exactly this sort of flexibility to exist in Smartcoins 2.0, which I have discussed previously.

[**** footnote on why the MPA would be inferior and either price below par, or if forced to par by settlement rules, lack demand.]

(*) If the Apple MPA only ever reflected the price of Apple stock, and never distributed dividends, any user could get paid the dividend stream for free without any price risk. They would do this as follows.

(i) Deposit $250 worth of BTS as collateral to self-create a long and short on bitAPPLE, and sell the bitAPPLE for $125. On this leg, you are short the APPLE price.
(ii) Use the proceeds of your bitAPPLE sale to buy an Apple share for $125. On this leg, you are long the APPLE price, plus long the dividend stream.

In theory the market would be willing to accept a much lower price on bitAPPLE.

I argue that MPA apple is an inferior investment to actual apple stock.  I've made the argument that the stock price is priced w/ dividend annoucements.  MPA Apple also does not have to pay capital gains tax and income tax which can be ranging from 25% - 40% markdown from the sale price of the stock.  MPA Apple is therefore much more superior  even though it doesn't give out dividends.