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« on: November 14, 2015, 12:49:24 am »
BM's new proposal mentions that BitShares will reduce fees EXCEPT transfer, creating order, and account creation fees. This is somewhat disappointing to me because I have been arguing to lower transfer and order creation fees. In this post, I want to point out some reasons why BitShares has to lower its "core" fees.
1. We're in competition. It's the red ocean already.
Believe or not, we're not in the blue ocean. We now have two main products: value transfer service and exchange service.
Regarding transfer service, our main competitor is Bitcoin. Bitcoin transfer service uses a cryptocurrency, which hard to be hacked, and allows users to send money around the world.
Currently, Bitcoin's fee is about $0.03, and its ecosystem is incomparably huge than us. The only disadvantage of Bitcoin is its volatility, but there are many third party service trying to resolve or minimize this weak point.
So think about it, do people really want to use BitShares instead of Bitcoin to transfer money? I would say no.
To overcome Bitcoin, we have to play better than Bitcoin in many aspects. Yes, we have Smartcoins. But we also have higher transfer fees, four times higher than Bitcoin. One may say that BitShares is the premium service like Tesla or Apple. But they're commodities. Is there any premium financial service that only have rich people? Paypal? Chase? The key point in transfer (and even merchant) service is a large user-base. So our focus group in transfer service should be all kinds of people.
Then what should we do? I would suggest to lower the basic transfer fee to at least Bitcoin level (10 BTS, but 9 BTS is better). If we really want to incentivize to people to use our system, I would say 5 BTS. If we keep the transfer fee high, I'd rather use Bitcoin to purchase goods or transfer money.
For the exchange service, our main competitor is centralized exchange. My argument is simple. Which exchange charge order creation fee in addition to a percentage fee? The only exchange is BTS DEX. This is really annoying. Users may think that "BTS already took 0.2% of my money, and now asks me 20 cents more"
If we have percentage fees, order creation fee should be minimized. Thanks to ElMato's effort, we know that 1 BTS can be effective value to prevent spamming attack. So why don't we set the basic order creation fee at 1 BTS?
2. Fees can be increamental as our market cap grows.
Suppose we set our transfer fee at 5 BTS ($0.03). Of course it can be adjusted by committe proposal. But we can increase the fee as our market cap grows. Think about when Bitcoin was $1. Did it charge 0.03 BTC per transfer? As Bitcoin's market cap grows, it automatically increase its fee. If its price becomes $3,000, it will charge $0.3. But people may not care.
We can take the same strategy. I rather want to say, we should be humble. We only have 7.5 mil market cap, one out of tens of Bitcoin. Let's start with low fee and as market cap grows, fix the rate in terms of BTS.
3. A successful referrer in a loss
Someone say we should keep referring system with high fees. But if high fees prohibit our growth of user base and price, is it still important?
Which one do you prefer, doubled price of BTS with 10 refers, or 20 refers with halved price?
The key is the price now. If price goes up, it's easier to advertise BitShares. Then what makes price? Demands and user-base. I would recommend to remove all factors that drive out users. Bad UI? It's getting better. Low liquidity? Many are making market bots now. High fees? One may say lower fee is not the pulling factor. Right, lower fee does not guarantee more users. However, high fee is surely pushing factor. It makes people annoyed and drives out them.
4. Shareholders want lower fees
IMHO, BM's biggest mistake is listening some community members' voices with fluent English (Since my English is not good, I cannot persuade BM now). But see the voting result. Bitcrab and I have the largest votes, and we are both arguing for lowering fees. Shareholders show their opinion by votes. Why does BM keep ignoring shareholder's voice?
TL; DR
My suggestion is to lower the basic transfer fee to BTC level (9 BTS) and to lower the basic order creation fee just for preventing spammy attacks (1 BTS)
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