Quote from: vlight on October 22, 2014, 11:23:48 am

And AGS has 0 liquidity.

This has been said over and over, also as an accusation to the effect that AGS is being gifted liquidity.

First of all, AGS holders never wanted quick liquidity.  That's why they bought AGS.  It was a long term investment to start with.  Otherwise they could have bought PTS.  I don't think AGS holders are thanking their lucky stars now that they have liquidity.  It's more of a liability now.  They will have to watch the markets and manage it, be tempted to sell it, etc. AGS holders probably aren't happy with this sudden liquidity.

Another point is that that AGS was always intended to end up effectively liquid.  Every time a new DAC came out it was becoming more liquid.  Also based on the fact that all along the idea was to build foundation-industry DACs which would then be "snapshoted" in the the future.  With time, AGS was alway supposed to be tending toward complete liquidity.

Wow, what an absurd comment. AGS was never "intended to end up effectively liquid." The fact that you can sell your stake in future DACs does not suddenly make AGS liquid. Nice way to contort reality to fit your objective. AGS was always "locked in" and this is exactly why AGS investors received 6X equity for each dollar they invested. PTS investors paid a 6X premium for their liquidity. Now we are going to shoulder the cost for AGS? Nice bait and switch.

"Fair" is certainly subjective, but I would argue that there is a floor and a ceiling on the acceptable range of subjectivity. Anything outside of those extreme boundaries I would label as "provably" unfair. For example, we know that AGS and PTS were promised at least 10% in future DACs. ALL ELSE BEING EQUAL it would make sense to grant them equal stake in the SuperDAC. But all else is not equal for the following reasons:

1) You have to discount AGS in order to compensate for "gifting" them with liquidity. The exact value of this discount is subjective, but I would argue that this value is objectively NON-ZERO.
2) Now we have BM proposing that the currently liquid PTS would actually be subject to a vesting period! Wow, this tips the scales even further. How much? I dunno, but again this is a NON-ZERO amount.

As a corollary I would argue that the liquidity discount from point #1 was actually decided by the market already. The AVG dollar-for-dollar difference in stake between AGS and PTS investment was due solely to the fact that AGS was "locked in" (illiquid). This premium paid by PTS investors is in fact the experimentally proven value of liquidity.

So, you guys propose a 50/50 distribution between AGS and PTS. Ok sounds good.

* Then you propose that AGS will now become a liquid tradable asset, thus removing the entire advantage of PTS over AGS. Any compensation for this? Nope.

* Then you do the most ass-backward thing imaginable and you actually "lock" PTS into a vesting period.

So what we've done is gifted AGS with liquidity, punished PTS with IL-liquidity, and things are still "equal". Flawless logic!

Edit: And still not a peep from Dan or Stan about this. Very confidence inspiring.

Quote from: Stan on October 22, 2014, 03:28:31 am

Repeating this in threads where the same question keeps coming up:

Bytemaster explained his analysis in today's recorded mumble session.  As usual, it went far deeper than superficial numbers like "market value".

Here's a sample:  True value assessment must include an estimate of liquidity.  It is not possible right now to sell every share at the market price.  Not even close.  So you can't give a DAC credit for its full market cap unless there is truly that much demand for every share. 

Another example:  A fully efficient market with all information available to it would be expected to correctly appraise the value of a share.  But things are happening too fast and the more you know and have assimilated the implications of all the facts the more accurate will be your assessment of the true value.  Bytemaster is the closest thing we have to a fully informed appraiser.

So before you criticize his analysis, be sure you have thought things through at least that deeply.

At the very least, I think DNS an PTS shouldn't be subject to lockout.

(I am 100% BTSX now, none of the others, so it doesnt matter to me, I'm just trying to get everyone a fair deal).

Only in Bizarro World does it make sense to gift liquidity to an IL-liquid asset with no discount, and in the same stroke of genius make the already punished investors of PTS IL-liquid. Totally rational, right guys... right?

Quote from: alphaBar on October 22, 2014, 12:12:49 am

Quote from: bytemaster on October 21, 2014, 10:28:46 pm

Quote from: alphaBar on October 21, 2014, 07:37:36 pm

Quote from: gamey on October 21, 2014, 03:30:28 pm

The problem with these debates is that there is a larger interest in BTSX.  So of course they are for their side, which is BTSX.  Therefore we hear their side the most and people start thinking that is the consensus.

Then from there we vote on BTSX chain how to treat PTS. 

I'll go along with whatever, but it becomes obvious that those of us with an interest in PTS are not being represented that well in these discussions.

I really hate to agree with this guy, but whatever

We are the single largest holder of PTS by far.  Giving a large stake to PTS and AGS would be massively in our favor.  So you can believe that PTS perspective was considered.

1) You are "gifting" liquidity to AGS at the expense of all other assets, with literally NO discount. Essentially assigning liquidity a value of ZERO.
2) You are killing the sharedrop incentive by transferring a DAC-agnostic asset like PTS/AGS into a superDAC representing a variety of biased interests. This further devalues PTS/AGS.
3) You are violating the social contract of PTS/AGS.
4) You are making decisions based on mixing and conflating the consensus of one group of asset holders with those of another. In fact, I wouldn't even call it consensus, but that's another point entirely.

And when I bring up these very clear points you say "this hurts me more than it hurts you." Really Dan? Entertain me with a semblance of a response, at least.

See if this change of perspective makes you feel a bit better...
https://bitsharestalk.org/index.php?topic=10293.msg135034#msg135034

PTS and AGS have spawned a child that surpasses their performance by a light year.  I know the feeling.   

Stan - even if you could prove that unifying all these assets into a single Bitshares token was good, it is irrelevant to my point. Your proposed allocation is provably unfair because it creates a large transfer of wealth to AGS holders at the expense of everyone else. All of the sudden these "locked up" AGS will be liquid, introducing massive sell pressure on every other linked asset. Liquidity is worth a HUGE and easily quantifiable premium, and in your proposal that premium is being paid solely by holders of PTS (and BTSX). If you address my arguments directly we can make progress.

This whole exercise is a farce. If you want consensus then you should receive it from each asset independently by allowing them to vote with their stake with the condition that I3 does not participate in the voting (and especially not with funds pegged for marketing). These rigged forum polls and on-a-whim decision making based on information buried deep in the forums are nothing but theatre.

To clarify, forum polls are rigged in the sense that they are gameable (at worst) and represent a small cross-section of people who troll the forums (at best).

I'm re-posting this here so that it doesn't get lost in a thread before people can read it.

As I write this, the valuations on Coinmarketcap would seem to imply a naive marketcap-based allocation of about 10% to PTS, 10% to AGS, and 80% to BTSX. Here is a summary of the main reasons why this would be grossly unfair to PTS/AGS:

1. The proposed merger is in essence like an unsolicited takeover, to use the company metaphor, and PTS and AGS are not being given a chance to vote their approval. (I don't call it a "hostile" takeover because there is no management team for PTS/AGS in place to oppose it). Academic studies of large samples of corporate takeovers have shown that unsolicited takeovers typically require substantial premiums, say 40% or more, above the average pre-offer share price.

2. The coinmarketcap valuation of PTS likely understates the true fundamental value of Protoshares (and, by extension, Angelshares). This is because PTS is far less liquid than BTSX. Whether you look at dollar volume of trade or the order book on BTer, the conclusion is the same: PTS has a large built-in illiquidity discount relative to BTSX.

3. The proposed merger would basically discard the original social consensus (and perhaps try to forge a new one). The social consensus is an inherent property of PTS and AGS, and BTSX has certainly derived some value from "free riding" on it. None of what we have now would be possible without the cornerstone laid by PTS and AGS. Getting rid of the social consensus has a price that should also be factored in.

4. The new BTS entity being formed is not just BTSX 2.0. It is a much broader conglomerate that goes beyond banking and exchange. From this perspective, it is more like a merger of equals than a one-sided acquisition. Based on Bytemaster's recent views, we can expect that (1) a separately developed VOTE DAC would achieve a valuation equaling or exceeding BTSX, and (2) in the future, with a trillion dollar industry, the value would be spread evenly among a dozen or so different DACS rather than being concentrated in BTSX.
      So, PTS and AGS should be fully compensated for the substantial value that they are giving up. A simple example may help illustrate. Suppose that, without the merger, eventually BTSX = 100 and VOTE = 100. Suppose conservatively that all future DACS, large and small, would together be 200 (we can exclude DNS and MUSIC since the snapshots already occurred and we're focusing on future valuation). Now suppose that, with the merger, the combined BTS is 250 (there are additional synergies from eliminating competition between BTSX and VOTE). Finally, let's suppose chains inherit 10% (or 20% in the case of BTS).

Scenario A: with a merger, assuming an 80/10/10 allocation of BTS:

BTSX gets:  80%*250 + 80%*20%*200 = 232
PTS/AGS get: 20%*250 + 20%*20%*200 = 58


Scenario B: without a merger, VOTE is developed as competitor to BTSX, and PTS, AGS each get 30% of VOTE:

BTSX gets: 100
PTS/AGS get:  60%*100 + 20%*200 = 100


The gains from the merger in Scenario A should be measured relative to values in the no-merger Scenario B, which is the default/fallback outcome (i.e., what would happen if the merger were not feasible). The relevant issue is, how much do parties gain or lose from choosing Scenario A versus Scenario B? Even if you adjust the numbers a bit, it's clear the 80/10/10 is woefully inadequate to compensate PTS and AGS for moving to Scenario A from Scenario B. And it becomes even more unfair the greater the assumed value of all future DACS.


So, the bottom line is, absolutely the merger should be done. It will yield great benefits in terms of branding, marketing, and incentives. But let's make sure we compensate PTS and AGS fairly and generously for the right to buy them out and eliminate them from the face of the earth.

You did not address the issue of "gifting" liquidity to AGS which will introduce massive sell pressure on every other linked asset. I do agree in principle with what you said.