Author Topic: Deflationary Development Model -- Join my experiment  (Read 7051 times)

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Offline jsidhu

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We can work with it.. With ten pct inflation max there will be enough bts to dilute and bts holders wont be mad cause thee is an inflation target per year... Msin thing is that there will be deflation from failed dacs which are majority
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Offline BTSdac

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Voting for Merger Proposals on both sides (BTS and DacAsset holders) occur, and both need to achieve a 'critical mass' (again, definition to be defined). When this happens, all DacAsset holders are issued their share of BTS, all their DacAsset is burned, and the Dac's functions can now be operated in BTS.
Dood idea ,but it is very difficulty to real marketing , if there are any information that one DAC would been merged in BTS, this information will cause the price of this DAC rise much.  many new investor  come up to buy this DAC, if give too many BTS to this DAC holder , this harm BTS holder , at the same time if give too few BTS to this DAC holder it will cause new investor of DAC unsatisfy.
you know you cannot make everyone satisfy. even if only 1% DAC holder unsatisfy.
if enforce merge this DAC ,reputation of BTS will become bad.
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Offline Geneko

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@fluxer555

Very nice work, please continue.

Offline jsidhu

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I don't have time to read everything here, but I just wanted to share some new revelations:

- A Dac created through DacShares could easily be profitable on it's own within the Bitshares SuperDAC by simply charging fees in BTS, and instead of giving them to delegates, give them to DacAsset holders. The statement in my original proposal about how (paraphrased) "it's in the favor of the Dac to have all operations done in terms of the DacAsset to retain value within the Dac" is wrong. This means that even though the Dac is not giving profits to all BTS stakeholders, it is still in a mutually beneficial relationship with BTS. Since SuperDAC merger isn't the only way to profit long-term from investing in a DacAsset, this makes the investment much more attractive.

- Mergers can also happen between two or more DacAssets.

Smarter Risk Management:
- A process of 'slow burning' locked-up BTS while slowly issuing the DacAsset and Developer Stake mitigates risk from investors.
- A way to vote out / change developers mid-development
- A way to 'Cancel' development, stopping the slow-burning/distribution process and returning remaining BTS to original investors
- A way to open up more rounds of capital infusion for a DacAsset

- My whole DevShares implementation is flawed... DevShares should be issued per Dac, not per Developer.

I'll have a new proposal ready by next week.

Yes I talked about the 3 use cases please review.. it's your proposal but I generally agree with most of the stuff and clarified others...
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Offline fluxer555

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I don't have time to read everything here, but I just wanted to share some new revelations:

- A Dac created through DacShares could easily be profitable on it's own within the Bitshares SuperDAC by simply charging fees in BTS, and instead of giving them to delegates, give them to DacAsset holders. The statement in my original proposal about how (paraphrased) "it's in the favor of the Dac to have all operations done in terms of the DacAsset to retain value within the Dac" is wrong. This means that even though the Dac is not giving profits to all BTS stakeholders, it is still in a mutually beneficial relationship with BTS. Since SuperDAC merger isn't the only way to profit long-term from investing in a DacAsset, this makes the investment much more attractive.

- Mergers can also happen between two or more DacAssets.

Smarter Risk Management:
- A process of 'slow burning' locked-up BTS while slowly issuing the DacAsset and Developer Stake mitigates risk from investors.
- A way to vote out / change developers mid-development
- A way to 'Cancel' development, stopping the slow-burning/distribution process and returning remaining BTS to original investors
- A way to open up more rounds of capital infusion for a DacAsset

- My whole DevShares implementation is flawed... DevShares should be issued per Dac, not per Developer.

I'll have a new proposal ready by next week.

Offline luckybit

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I thought we were targetting businesses and not charities... we have to figure out what "persona" we wan't to  be perceived as to the world.
If you want my opinion on the best strategic personas to adopt I would say NGO, non-profit, cooperative, or social enterprise. In the United States I would say if you're an American then you should not start a corporation. Start an NGO, non-profit, cooperative or social enterprise.

An example is the COG Cooperative. Study the COG Cooperative because I think strategically they are the best structure for American organizations in this space if you're trying to avoid regulation. In fact it was so effective that they got on Apple's IOS before everyone else with their Pheeva wallet. So they are an excellent case study on the right way to do it.

Quote
COG Cooperative
The freedom of bitcoin. The power of a network.
Social good through financial freedom.

COG is a cooperative that provides members with the best applications and services in the Bitcoin marketplace. COG members receive free access to world class Bitcoin applications, revenue sharing, and exclusive discounts with partner merchants.

http://cogcoop.com/

I suggest we form a Bitshares Cooperative ASAP using the same successful techniques used by the Cog Cooperative. Then use that Bitshares Cooperative in a similar fashion as the Cog Cooperative where the members of the Bitshares Cooperative are verified "trusted" users of Bitshares X. US Citizens should be encouraged to join this Bitshares Cooperative which could then solve some of the problems we are talking about here.

We need a legal persona and I think a Bitshares Cooperative is the best way to do it.
Quote
A cooperative is a business owned by its members and operated for the benefit of all involved. Join COG to become part of a network focused on providing social good through financial freedom, and earn bitcoin while doing so.
^ Isn't that exactly what Bitshares is trying to do? So why don't we form a Bitshares Cooperative and do exactly what they are doing? Then let everyone who has shares in Bitshares SuperDAC join the Bitshares Cooperative? The Bitshares Cooperative would simply mirror the blockchain decisions by shareholders but this would provide a legal entity to interact with which isn't Invictus.

I agree on wording and language to avoid regulation but really the larger problem as long as the company is active is having centralization points of failure... like you said if we are able to have algorithmic methods and processes to recieve inputs into DACs and provide outputs(monetized outputs or other subjective outputs somehow measured).. we will essentially be mostly there.. and I think Turing completeness would help in that regard... the problem I have with a  charity or gift environment is that it wouldn't attract those that are strictly looking to invest in ideas and innovation
That is not true. It attracted all of us. We all donated either our computation resources (mining PTS) or gifted Invictus Innovations through AGS. If it worked for us then it could continue working and there is no reason to see ourselves as investors unless you want to invite the SEC to interfere.

I think also if you position yourself as a charity you can get more support from governments, non-profits, educational institutions, etc.

and those who can develop but don't have the time or capability in developing for free just to build a rep.. the rep should help attract more investors in your future endaevors but should not hinder new dev's from trying to enter the system to develop new DACs and ideas. The rep system would be an incentive system to keep dev's around for longer rather than one and done.
There are no investors. While having a good reputation will make it more likely that people will value your presence and reward your contributions it does not guarantee anything. So you have to use what I'll call algorithmic psychological conditioning. There isn't a better word for what I'm trying to describe but that word seems to fit well, and the outcome is that the community is culturally conditioned to adopt certain ritual gifting/giving. It's not all that different than the social consensus we have now only more formalized and encouraged within the source code in the same way tipping miners is voluntary but encouraged.

THe prediction market of investors (donators) choosing the right DAC proposals and people to invest (donate) in will depend on their needs, and may open up other forms of interesting technology advances for bts that we can't foresee right now. It would not only help grow the system and those who hold bts or invest in the ecosystem but help provide valuable utility to anyone who wishes to use the system for low cost and high benefit even if its fora  short amount of time. However we word it.. we have to keep in mind that essentially we are targeting a restructing of the way we do business.. and if we are saying lets think of business as charity sure.. but it would be alot harder for people to flip that switch rather than what is proposed here...

As I said earlier you have to weigh risk vs benefit. Do you want to open yourself up to regulatory scrutiny or do you want to promote innovation? In the United States you risk regulatory scrutiny if you do things in the wrong way. I only get annoyed when I see the community or developers give up on the goals or the innovations when they have the option to simply do things differently.

How many times do we hear that developers have to ban all US investors? If they just ban all investors from their platform then it solves the problem. No investors allowed and you can accept every gift from anyone as a donation. If you want Americans to be able to innovate without the BS nationalist politics interfering then this is the only way it can be done because the alternative is to just price in black swan events which has a high cost (perhaps $100,000 per delegate just to price in the risk of an SEC crackdown and fine).

I think we can draw some similarities.. however the rep system is pretty short and simple and I was hoping that you would compare the proposal with your proposal from the use case perspective as it would take alot longer for me to break your proposal down from its true intentions and translate it to what this proposal's true intentions are.

I'm honestly not always the best at explaining ideas. I think someone like Stan can look it over and explain it better than I can. What I am good at is understanding concepts and the language. I know also cite my sources and the COG Cooperative is an example of the right way to do it while the corporate model is the wrong way. Bitshares Music Foundation is a good way to do things while a Invictus Innovations Inc was the wrong way. COG Cooperative in my opinion is the best way because you can actually distribute shares through the cooperative legally, distribute gifts or profit sharing legally.

Just to clarify, I'm not a lawyer so check with your lawyer but I believe it can be done legally this way.
So in short:

1) Harder to flip the switch in the minds of the business world from a business oriented (investor/developer) sort of world to a charity gift environment (give/take) credit based world. We have to figure out what we want to be perceived as. What's our niche.
The Gates Foundation is a charity. I don't think there is a lack of money in the charity world. It's just a different kind of marketing that goes into charity. I think charity is actually a better way to do it because you get tax breaks for your donations. Also the decentralized autonomous social corporation can actually have values built into a constitution while a pure decentralized autonomous corporation only has to profit for shareholders. A lot of DAC developers are interested in decentralization for philosophical reasons, and they also might have a social mission which matters to them as much as making a profit does.

2) get the idea of working for "free" in a charity and it would turn people off who simply can't afford to work for free... even to try to build a reputation.

None of us here would be turned off by the opportunity to be in that environment. You work for free but your reputation itself has value. So you work to earn reputation points which have value. How is it different than saying that DAC developers now work as volunteers on these DACs and if the DACs become a success they often become millionaires? Enough DAC developers become millionaires working for free and everyone will want to work for free.

So the idea that people working at anything are working for free is not true. If you work for reputation then reputation itself is an asset which could be later exchanged for whatever you need. For example if you're a developer with reputation then the DAC could pay you in BitUSD as long as your reputation is good enough that you can remain a delegate.
What I am saying is that the prediction market of DAC proposal approvals through voting would negate the "bad actor" effect of bad dev's doing one-offs to try to propose and run off with dev funds... in this proposal those funds get burned anyway because they are not merged in and the DAC is not used or providing profits. The rep system precluding payments like what you are suggesting would stop bad actors but it would also stop good actors and that is more important.
Prediction markets as you're defining it could open you up to a black swan regulatory event. I'm not totally against taking risks but if you're someone who wants to accomplish the same level of innovation without having to take that risk then there are other ways.

I think prediction markets are in the grey area but at any time the authorities could put it in the black area and now you'd have to shut your entire DAC down. I think if you have the DACs set up in such a way that the DAC can take a different form in different jurisdictions then it can be truly global.

Bitshares X in the United States might have to be done different to how it could be done in another country. The point is you don't want US authorities to influence global innovation just like you don't want Chinese or Russian authorities to stop innovation in the US.

In the end you can't stop scams.. and an equilibrium will be achieved whereas some people willw ant to hold bts due to scams and others will get "good" at choosing the right dev's and hit the lottery as they end up being tech innovations and the devshares become worth alot as they get merged in or operate as a sole DAC.

You could say that the entire altcoin industry is a prediction market if you want to look at it like that. But why use the words prediction market? Why go there? On some level you will have greedy people who will donate just because they think they'll get something back but you should tell these people that it's charity and that there is no guarantee they'll get anything back. If anyone gets anything back it's because other people were honorable and not because they are owed anything.

Investors who want to do it properly will have the SEC to protect them from scams but if you're donating then there are processes to protect you from fraud even in charities. So use those processes and advance them with algorithmic mechanisms.

As time goes by... the prediction markets will get better and more people will become trusting and good at filtering out those who are bad... bad actors will have to get more creative and good actors will benefit from being able to develop to earn.
Rather than calling it a prediction market why not just call it a prediction algorithm? Change your language if you don't want to confuse regulators.
Both proposals offer this.. and the voting process integrates reputation based on what they have contributed so as a dev it pays to do good work and stick around. As you get vetted you will get funding easier... if you screw up.. funds are burned before any DAC is merged anyways... so no harm to BTS as a whole... but that is the risk you take to "invest" in the bleeding edge.

On this we agree. Our goals are similar here and we just have to adopt language which is better for US citizens. In some countries you can set it up so there are "investors" and the like but if what you said in other threads on this forum is true and the SEC is psychotic enough to persecute the entire altcoin industry then perhaps it's just easier for Americans to ban all investors from all the critical platforms. If platforms in other countries want to set it up where they accept investors then they can but in the United States you'll have to accept that you cannot be an investor and all of your transactions to support your cause are donations to charity.

This doesn't mean you don't have any rights or that the smart contracts cannot enforce things so that you're likely to be made whole, it simply means that no organization or person owes you anything directly.
« Last Edit: October 23, 2014, 07:43:04 pm by luckybit »
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Offline jsidhu

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Replace the words "Investor" with "Patron".
Replace words stock/shares with "gifts". Gifts can include stocks/shares but aren't limited to that.

Read my thread on the gift economy approach.  All who give earn a reputation and all who take earn a reputation. There are givers and takers. Leechers lose credit for everything they take and givers earn credit for everything they give to a DAC. The DAC could give gifts back to donors, or some other DAC could reward the generosity with gifts to the givers.

https://bitsharestalk.org/index.php?topic=10397
Reputation is only a small part of the developer focus in this proposal yet it seems effective and simple. Can you outline the pros and cons of your idea over this one wrt reputation. Seems thats what you are talking about  an approach that centers around reputation while this one focuses more on the usecases and is easier to understand for me personally. Specifically if you intend to replace this proposal please use the use cases in my post above to show how they would work in your proposal...

You said earlier that the SEC and regulators could attack the delegates, disrupt the innovation process, and so on. Above all else I think we have to preserve innovation in this space and if that means dropping the corporate investor model then drop it.

So you cannot use words like investors. You have to call them patrons. You cannot "crowd fund" or do "crowd sales". You can set up charitable organizations, NGO's, and let people donate to them to support development. A DAC can function as a social benefit corporation which would have the benefits of being charity like.

I'm not saying we need inflation or deflation. My suggestions involve removing all promises, all guarantees, and going with a reciprocity model where people who give the most to the DAC receive the most rewards from the DAC.

It doesn't require any "investors", "IPOs", or anything like that. Remove all the corporate language and replace it with more suitable metaphors. Donate to charity to become a "member" of the DAC. After becoming a member then the size of your gift gives you a ratio or an amount of credits. That numerical signal gives you a reputation as a giver and people who know you're a giver are more likely to give to a giver because it improves their reputation.

All of the enforcement functionality could be in the form of smart contracts or hard coded into the DAC. Take a look at BitTorrent ot see how you can trade data around without using the investor model. In BitTorrent the seeder takes on a similar role to the investor only the seeder isn't promised anything in return by anyone. The seeder gets reputation points for seeding and the network can then compensates them with increased access.

So you can use completely algorithmic methods and mechanisms to get people to provide resources to a DAC in ways which don't involve opening doors for the SEC to get involved by simply removing all the investors. A DAC which is supported by volunteers, charitable organizations, NGO's, and gift donations, does not have investors. It instead has benefactors and the top benefactors would have a reputation for their service which would be noted by the DAC itself.

The problem with doing a gift economy in the physical world is we did not have decentralized reputation. We did not have a distributed ledger which could account for every activity of every participant in the community. Now we have the capability to actually know who the givers and takers are in any community, we can know who provided support to the DACs and who just leeches. We can choose to gift to the people who "do the right thing" without any legal obligation.

To improve the ideas presented by the OP, remove investors from it, replace it with supporters. Supporters should become the nobility of the DAC, so you could make the top supporters of the DAC into delegates, or the DAC itself could be designed to give it's top supporters shares in itself, without any human beings treating the supporters as investors.

I thought we were targetting businesses and not charities... we have to figure out what "persona" we wan't to  be perceived as to the world. I agree on wording and language to avoid regulation but really the larger problem as long as the company is active is having centralization points of failure... like you said if we are able to have algorithmic methods and processes to recieve inputs into DACs and provide outputs(monetized outputs or other subjective outputs somehow measured).. we will essentially be mostly there.. and I think Turing completeness would help in that regard... the problem I have with a  charity or gift environment is that it wouldn't attract those that are strictly looking to invest in ideas and innovation and those who can develop but don't have the time or capability in developing for free just to build a rep.. the rep should help attract more investors in your future endaevors but should not hinder new dev's from trying to enter the system to develop new DACs and ideas. The rep system would be an incentive system to keep dev's around for longer rather than one and done.

THe prediction market of investors (donators) choosing the right DAC proposals and people to invest (donate) in will depend on their needs, and may open up other forms of interesting technology advances for bts that we can't foresee right now. It would not only help grow the system and those who hold bts or invest in the ecosystem but help provide valuable utility to anyone who wishes to use the system for low cost and high benefit even if its fora  short amount of time. However we word it.. we have to keep in mind that essentially we are targeting a restructing of the way we do business.. and if we are saying lets think of business as charity sure.. but it would be alot harder for people to flip that switch rather than what is proposed here... I think we can draw some similarities.. however the rep system is pretty short and simple and I was hoping that you would compare the proposal with your proposal from the use case perspective as it would take alot longer for me to break your proposal down from its true intentions and translate it to what this proposal's true intentions are.

So in short:

1) Harder to flip the switch in the minds of the business world from a business oriented (investor/developer) sort of world to a charity gift environment (give/take) credit based world. We have to figure out what we want to be perceived as. What's our niche.
2) People get the idea of working for "free" in a charity and it would turn people off who simply can't afford to work for free... even to try to build a reputation. What I am saying is that the prediction market of DAC proposal approvals through voting would negate the "bad actor" effect of bad dev's doing one-offs to try to propose and run off with dev funds... in this proposal those funds get burned anyway because they are not merged in and the DAC is not used or providing profits. The rep system precluding payments like what you are suggesting would stop bad actors but it would also stop good actors and that is more important.

In the end you can't stop scams.. and an equilibrium will be achieved whereas some people willw ant to hold bts due to scams and others will get "good" at choosing the right dev's and hit the lottery as they end up being tech innovations and the devshares become worth alot as they get merged in or operate as a sole DAC. As time goes by... the prediction markets will get better and more people will become trusting and good at filtering out those who are bad... bad actors will have to get more creative and good actors will benefit from being able to develop to earn.


Decentralized reputation combined with decentralized identity is a game changer

Both proposals offer this.. and the voting process integrates reputation based on what they have contributed so as a dev it pays to do good work and stick around. As you get vetted you will get funding easier... if you screw up.. funds are burned before any DAC is merged anyways... so no harm to BTS as a whole... but that is the risk you take to "invest" in the bleeding edge.
« Last Edit: October 23, 2014, 05:56:55 pm by jsidhu »
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Offline luckybit

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Replace the words "Investor" with "Patron".
Replace words stock/shares with "gifts". Gifts can include stocks/shares but aren't limited to that.

Read my thread on the gift economy approach.  All who give earn a reputation and all who take earn a reputation. There are givers and takers. Leechers lose credit for everything they take and givers earn credit for everything they give to a DAC. The DAC could give gifts back to donors, or some other DAC could reward the generosity with gifts to the givers.

https://bitsharestalk.org/index.php?topic=10397
Reputation is only a small part of the developer focus in this proposal yet it seems effective and simple. Can you outline the pros and cons of your idea over this one wrt reputation. Seems thats what you are talking about  an approach that centers around reputation while this one focuses more on the usecases and is easier to understand for me personally. Specifically if you intend to replace this proposal please use the use cases in my post above to show how they would work in your proposal...

The pros and cons to using decentralized reputation


Pro:
1) One of the strengths we have in the DAC is that we can in theory track reputation far better than we can in a centralized model. It's shown that decentralized reputation can exist easily when you have a decentralized ledger for keeping score of everyone's credit ratios. So even something like BitTorrent could use a blockchain to store the credit ratios of seeders by simply having a DAC give credit points to people who seed, who share more, who donate more bandwidth.

This mechanism proven to work in BitTorrent could be implemented in any DAC once we have decentralized reputation and identity. The OP proposal is designed to work in a world where we don't have decentralized reputation and identity so it is not future proof. It's also inviting regulators by using words like "investors" and other corporate language which really is unnecessary to describe what we are doing.

Con:
2) I know it's easier to use corporate language because Bytemaster and others promoted the use of that language but at this point we all know that this language is wrong.  It is not future proof. It may invite regulators to actually begin treating the altcoin industry as an industry of corporate investors. But I do admit that it's a lot easier to explain than to invent an entirely new model based on a gift economy which fewer people will be able to understand.

Decentralized reputation combined with decentralized identity is a game changer

Pro:
1) Once you have decentralized reputation and identity then you can track who gave the most in algorithmic fashion. The DAC would receive "gifts" from patrons who support the idea. These gifts would not be given to any specific human beings but to the DAC itself. The DAC would have an algorithm built into which tracks the reputations of the gift givers which may be individual human beings, other DACs or centralized corporations. It does not really matter as long as the gifts are in a form which the DAC can understand such as a crypto-token.

So under this model you could have a corporation or a government donate a significant amount of money to one of the charitable organizations that the DAC lists as being critical to the development of the DAC. They donate to this by giving it any kind of equity they want using the legal centralized processes to do the donation. This donation then gets turned into BitUSD by the DAC and the organization which gave to the DAC is entered into the ledger as being a giver with an amount of credits which matches the value of whatever they gave. The charitable organization would then develop the DAC but each developer would have a reputation so that the most generous developers are the trusted developers because these developers are known to follow community social norms of reciprocity.

The developers at this point would be able to give gifts to the government organizations, corporations, individuals, or whomever else donated to the charity. These developers would have the right not to give these gifts but because it would damage their reputation if they don't they would be encouraged to maintain their social reputations. So in this way decentralized identity and reputation on the blockchain is all you really need.

Con:
2) The concept of scams will still exist but it will be developers who accept charity and run off with all the money. There will still likely be corruption among the delegates which is possible. The gift economy also requires that you think of all value input to the DAC in generic terms as (resources) and that can be broad.

Resources could include anything from social connections, smart property, to discounts, to bandwidth, to storage space, to stocks, shares, assets, equity, cryptocurrencies, etc.  This means the DAC has to be designed with a smart contract which is smart enough to determine the value of all these different possible resources and then exchange them into the format it can use.

So if someone is donating storage space then the DAC itself would need a way to accept storage space as an input and then later on give it's gifts as shares in itself as an output. Storj can do this for storage space but the idea is you need a DAC which can take any input and then give shares in itself as an output. Bitshares X being a decentralized exchange may someday have this capability but I list it under one of the cons for now because it's not a capability we have today.

Conclusion:
Those are only two pros and cons but there are more. I think overall the pros of doing this way outweigh the cons if you're trying to minimize the risk of legal prosecution. If you're trying to make it easy for the masses to understand then the cons outweigh the pros. It seems to me that making it easy for the masses to understand something can sometimes result in the masses trying to crush innovation because they only understand it on the most superficial level without realizing how much potential it has.
« Last Edit: October 23, 2014, 04:04:52 pm by luckybit »
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Offline luckybit

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Replace the words "Investor" with "Patron".
Replace words stock/shares with "gifts". Gifts can include stocks/shares but aren't limited to that.

Read my thread on the gift economy approach.  All who give earn a reputation and all who take earn a reputation. There are givers and takers. Leechers lose credit for everything they take and givers earn credit for everything they give to a DAC. The DAC could give gifts back to donors, or some other DAC could reward the generosity with gifts to the givers.

https://bitsharestalk.org/index.php?topic=10397
Reputation is only a small part of the developer focus in this proposal yet it seems effective and simple. Can you outline the pros and cons of your idea over this one wrt reputation. Seems thats what you are talking about  an approach that centers around reputation while this one focuses more on the usecases and is easier to understand for me personally. Specifically if you intend to replace this proposal please use the use cases in my post above to show how they would work in your proposal...

You said earlier that the SEC and regulators could attack the delegates, disrupt the innovation process, and so on. Above all else I think we have to preserve innovation in this space and if that means dropping the corporate investor model then drop it.

So you cannot use words like investors. You have to call them patrons. You cannot "crowd fund" or do "crowd sales". You can set up charitable organizations, NGO's, and let people donate to them to support development. A DAC can function as a social benefit corporation which would have the benefits of being charity like.

I'm not saying we need inflation or deflation. My suggestions involve removing all promises, all guarantees, and going with a reciprocity model where people who give the most to the DAC receive the most rewards from the DAC.

It doesn't require any "investors", "IPOs", or anything like that. Remove all the corporate language and replace it with more suitable metaphors. Donate to charity to become a "member" of the DAC. After becoming a member then the size of your gift gives you a ratio or an amount of credits. That numerical signal gives you a reputation as a giver and people who know you're a giver are more likely to give to a giver because it improves their reputation.

All of the enforcement functionality could be in the form of smart contracts or hard coded into the DAC. Take a look at BitTorrent ot see how you can trade data around without using the investor model. In BitTorrent the seeder takes on a similar role to the investor only the seeder isn't promised anything in return by anyone. The seeder gets reputation points for seeding and the network can then compensates them with increased access.

So you can use completely algorithmic methods and mechanisms to get people to provide resources to a DAC in ways which don't involve opening doors for the SEC to get involved by simply removing all the investors. A DAC which is supported by volunteers, charitable organizations, NGO's, and gift donations, does not have investors. It instead has benefactors and the top benefactors would have a reputation for their service which would be noted by the DAC itself.

The problem with doing a gift economy in the physical world is we did not have decentralized reputation. We did not have a distributed ledger which could account for every activity of every participant in the community. Now we have the capability to actually know who the givers and takers are in any community, we can know who provided support to the DACs and who just leeches. We can choose to gift to the people who "do the right thing" without any legal obligation.

To improve the ideas presented by the OP, remove investors from it, replace it with supporters. Supporters should become the nobility of the DAC, so you could make the top supporters of the DAC into delegates, or the DAC itself could be designed to give it's top supporters shares in itself, without any human beings treating the supporters as investors.

« Last Edit: October 23, 2014, 03:23:20 pm by luckybit »
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Offline jsidhu

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Replace the words "Investor" with "Patron".
Replace words stock/shares with "gifts". Gifts can include stocks/shares but aren't limited to that.

Read my thread on the gift economy approach.  All who give earn a reputation and all who take earn a reputation. There are givers and takers. Leechers lose credit for everything they take and givers earn credit for everything they give to a DAC. The DAC could give gifts back to donors, or some other DAC could reward the generosity with gifts to the givers.

https://bitsharestalk.org/index.php?topic=10397
Reputation is only a small part of the developer focus in this proposal yet it seems effective and simple. Can you outline the pros and cons of your idea over this one wrt reputation. Seems thats what you are talking about  an approach that centers around reputation while this one focuses more on the usecases and is easier to understand for me personally. Specifically if you intend to replace this proposal please use the use cases in my post above to show how they would work in your proposal...
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Offline luckybit

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Replace the words "Investor" with "Patron".
Replace words stock/shares with "gifts". Gifts can include stocks/shares but aren't limited to that.

Read my thread on the gift economy approach.  All who give earn a reputation and all who take earn a reputation. There are givers and takers. Leechers lose credit for everything they take and givers earn credit for everything they give to a DAC. The DAC could give gifts back to donors, or some other DAC could reward the generosity with gifts to the givers.

https://bitsharestalk.org/index.php?topic=10397

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Offline Troglodactyl

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I'd suggest just making the initial proposal more flexible.  The distribution schedule to the developer could be defined in the developer bid, and followed as long as the investors approve of the progress.  If the investors withdraw approval, it freezes or slows until the dev wins them back.

Offline amencon

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I can see how it would benefit BTS holders through share burn/buyback if we somehow convinced people to do this, but I don't see how the burn is desirable to the actual participants.

The proposal submission and developer bids make sense, but it seems like it would be more efficient to use a decentralized kickstarter model.  You could use the same basic system for proposals and developer bids, but once a bid was submitted a funding period would start for people to commit pledges into escrow.  If it fails to fund, they all get their funds returned, otherwise the development period starts and the funds remain in escrow.  At the end, the investors can vote to either pay the dev the balance, or burn it if they think they've been scammed.
Hmm cool idea.  Though I agree with jsidhu about maybe doing something like release some percentage of the funds to developer with the rest in escrow.  Ideally the amount of funds released would be enough to get the project started but there would be enough escrowed to incentivize the developer to finish the work rather than take what's given and disappear.  Something like 30% released with 70% in escrow?

Offline jsidhu

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I can see how it would benefit BTS holders through share burn/buyback if we somehow convinced people to do this, but I don't see how the burn is desirable to the actual participants.

The proposal submission and developer bids make sense, but it seems like it would be more efficient to use a decentralized kickstarter model.  You could use the same basic system for proposals and developer bids, but once a bid was submitted a funding period would start for people to commit pledges into escrow.  If it fails to fund, they all get their funds returned, otherwise the development period starts and the funds remain in escrow.  At the end, the investors can vote to either pay the dev the balance, or burn it if they think they've been scammed.
That sucks.. Devs need funds upfront. Also everyone would get the feature and vote to burn at the end. Not sure but not quite as good as op proposal.

The point is that in the OP proposal there is never any reason to burn.  Why would people want to do that?

There could also be an ongoing distribution throughout the dev period as long as investors approved it.  If the dev delivers and investors burn anyway, they've gained almost nothing and probably lost a dev forever.  They just can't be allowed to reclaim their funds after the dev has delivered, since that unbalances the incentives.
Maybe part of the funds are released at onset and other is escrowed per schedule as milestones are reached like op said. Anyways you would burn because if you didnt thats a risk free investment. You also burn devshares once a dac is merged.

You would always burn funds comverted from bts to devshares to keep cap the same.. one minus the other. If it doesnt get voted in to merge or its not profitable then investors see their coins burned. If it
gets merged coins are inflated by the proposal specs and given to investors.

If the devshares were tradeable vs bts then you would have liquid shares and people would be able to sell if they needed funds at a loss and as it gets closer to end of project the price will converge to either 0 or the initial ipo price like an option in a way. So devshares can be treated like options because they are rights to own bts if merged and worthless if not... unless the dac is self sustaining and provides profit then they act as a normal stock with dividends.

Hey Ive just invented options for bitshares lol the theta would be useful because
the longer it takes to finish the project (post deadline) the less likely it is to
complete and thus price of devshares reflect this.
« Last Edit: October 23, 2014, 04:51:33 am by jsidhu »
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Offline Troglodactyl

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I can see how it would benefit BTS holders through share burn/buyback if we somehow convinced people to do this, but I don't see how the burn is desirable to the actual participants.

The proposal submission and developer bids make sense, but it seems like it would be more efficient to use a decentralized kickstarter model.  You could use the same basic system for proposals and developer bids, but once a bid was submitted a funding period would start for people to commit pledges into escrow.  If it fails to fund, they all get their funds returned, otherwise the development period starts and the funds remain in escrow.  At the end, the investors can vote to either pay the dev the balance, or burn it if they think they've been scammed.
That sucks.. Devs need funds upfront. Also everyone would get the feature and vote to burn at the end. Not sure but not quite as good as op proposal.

The point is that in the OP proposal there is never any reason to burn.  Why would people want to do that?

There could also be an ongoing distribution throughout the dev period as long as investors approved it.  If the dev delivers and investors burn anyway, they've gained almost nothing and probably lost a dev forever.  They just can't be allowed to reclaim their funds after the dev has delivered, since that unbalances the incentives.