DAC organization of chance games

[theoretical]

I am posting this in response to bingo branch initiated in the repo.  I think before we make any more implementation effort, we should consider how the DAC will be organized.

I propose to have a separate asset type ("chips") for wagering.  Chips would be backed by BitUSD.  Before we begin bingo operation, chips should be issued or redeemed for $1 / chip, those BitUSD are put aside into the chip backing pool.  When 1000 chips are in existence, the bingo operation begins.  Winning bets are paid in newly created chips, losing bets result in destroyed chips.  The chip redemption value would then fluctuate based on winnings and losses, it would always be equal to the number of chips in existence divided by BitUSD in the backing pool.  This is equivalent to a bingo parlor where the commodity for wagering is equity shares in the bingo parlor.

For risk management purposes, the total of all bingo cards in play at a time can be at most 20% of the chips in existence, and players can bet at most 2% of the chips in existence on a single bingo card.  These numbers are just guesstimates, and should be re-evaluated using the Kelly criterion once a concrete pay table is constructed.

If we want chips to have a pegged redemption value (1 chip = $1), then we can have a separate assets representing equity (receive profits / losses from operations) and debt (chips).  If the house is losing, without an equity pool chips will fall below $1 (winnings paid by inflating chips come from all other players).  With an equity pool, BitUSD will flow into the chip backing pool from the equity pool to prop the value back up.  Investors will voluntarily contribute to the equity pool because the reverse flow is also possible.  If the house is winning, without an equity pool chips will grow above $1 (losses paid by destroying chips will distribute the value to all other players).  With an equity pool, the excess value will flow into the equity pool and be returned to its investors (equity pool shares will be creatable / redeemable for proportional fractions of the backing just like chips).

Current internal discussions at I3 have focused on a bingo DAC with only one investor, the yield pool.  I think bingo will have much more potential to attract new investors if we allow them a way to buy a piece of the house (i.e. put capital into equity), not to mention more capital will allow our payout table to have lower risk (or be able to offer larger prizes).

Also, note that there is nothing specific to bingo here.  We can implement other games of chance.  In fact, if we have only delegates validate chip creation / destruction, new games of chance would only require delegates to upgrade, not normal users (but all nodes would still validate all BitUSD flows and could validate chip creation / destruction from publicly available information).

I'm by no means an expert in the applicable regulatory framework, but I believe the law in much of the US treats games without rake more favorably.  And if we use the first model (where the equity in the bingo parlor is what is wagered) it could certainly be argued that players are playing against each other and the game should be legal for the same reason that private no-rake poker games are legal in many states.