[ANN] Cryptohedge Financial Services soft launch

[bitsharesfan]

Here is the article http://thevalueswan.com/cryptohedge-io-cfsassets-cfsgold-market-making-bots-20-to-50-yearly-return-maybe-black-swan-proof-maybe/

Very interesting article though cryptohedge.io link is broken..

[infovortice2013]

Bit-stability arrived. Nice DAC good luck

[Rune]

Here is the article http://thevalueswan.com/cryptohedge-io-cfsassets-cfsgold-market-making-bots-20-to-50-yearly-return-maybe-black-swan-proof-maybe/

Really nice article, thanks! The 20 - 50 percent yearly return is a bit of an overstatement. I'd be happy if we can get a 1% monthly return on each CFS asset once the markets mature, but right the only real short term return from CFSGOLD will be the speculative future value of the CFSCOIN sharedrop that CFSGOLD holders will receive.

[yellowecho]

I'm keeping an eye on this very closely.  I've been wanting to invest in an arbitrage hedge fund in this space for awhile.  Any idea when other assets will be launched?

[eagleeye]

Here is the article http://thevalueswan.com/cryptohedge-io-cfsassets-cfsgold-market-making-bots-20-to-50-yearly-return-maybe-black-swan-proof-maybe/

[eagleeye]

Nice initiative Rune,  ill write something up about what your doing on www.thevalueswan.com

[donkeypong]

It's really hard to say what the expected return per CFSGOLD will be. At first it will be close to zero and the value of holding CFSGOLD will be the CFSCOIN sharedrop.

Even if this is a break-even proposition that helps BitShares, then it will be a success. No need to worry about making a big profit here.

[Rune]

So i assume that you're going take the official price of gold from NY and London (which we know is rigged). Alternatively, will you do what bytemaster suggests and go 5% above the official price to reflect the real physical price? China is also opening an exchange that may take over from NY/London.

I like the idea though. What sort of annual return would you be expecting your customers to receive?

We will go with whatever price bitgold has. I imagine that in the future when bitgold is better established, delegates will begin to monitor its peg to physical gold directly rather than going gold -> usd -> cny -> bts. So if there ever is a paper decoupling bitgold should not be affected if bitshares is properly established.

It's really hard to say what the expected return per CFSGOLD will be. At first it will be close to zero and the value of holding CFSGOLD will be the CFSCOIN sharedrop. Our target will be to make about 0.3% of pure earnings after fees (if any) and after hedging/arbitrage per trade. So if we have 200k USD volume per day, we will earn 18k USD per month of which 12600 will be distributed to CFSGOLD holders in the form of increased NAV. The question is how much bitgold is required to accomodate 200k volume, and ultimately what's the volume generated per bitgold? There's also some other concerns and even conflicts of interest, because CFSGOLD holders will want the volume per bitgold maximized (which means reducing bitgold supplies and thus CFSGOLD), and CFSCOIN holders will want absolute volume maximized (maximizing bitgold and CFSGOLD supply at the cost of volume per bitgold).

Once we are actually trading it will be possible for us to begin doing analysis on these things and figure out what the best way to deal with it is.

[CLains]

Awesome 

[nz]

So i assume that you're going take the official price of gold from NY and London (which we know is rigged). Alternatively, will you do what bytemaster suggests and go 5% above the official price to reflect the real physical price? China is also opening an exchange that may take over from NY/London.

I like the idea though. What sort of annual return would you be expecting your customers to receive?

[roadscape]

I got bter.com to start working on bitGOLD market

 

[Empirical1.2]

I got bter.com to start working on bitGOLD market

Awesome!

 

[Rune]

I'm considering that a better way to offer CFS assets is with a fixed return rather than the current model, because with the current model all CFS asset holders will have their return reduced every time new CFSGOLD is issued.

Yes but be very careful and don't follow I3s paradigm to change the "rules" every now and then, because even if it is to the right direction, investors (specially the "old" ones) will loose confidence... (I think you know what I mean )

Absolutely. If we decide to change the rules we will not suddenly change the rules for CFSGOLD, we will instead create a new UIA and stop issuing CFSGOLD if we determine it is not an efficient way to do it. There will be a lot of changes here in the beginning though, but we hope the CFSCOIN sharedrop will make up for that.

On that note we've decided to already create the Cryptohedge investor token and registered it as CFSCOIN. Using this longer name is partly to save investor funds here in the beginning, and partly to emphasize the contract free nature of cryptohedge (most people understand that a coin is not an IOU or security and does not confer any legal rights or responsibilities).

[Volker]

very good idea!
It will certainly help the bitshares project to succeed !

I have already bought some CFSGOLD , but I have to make one question...
Why is the supply 20 CFSGOLD right now and not 10 CFSGOLD? Have you already found a big investor that bought 10 CFSGOLD? Am I missing something?

I had a buyer contact me who was interested in buying 10 bitgold. Since the supply of bitgold already on the books wasn't exhausted I just put up an extra 10 bitgold.

Question: Why do you  need outside money for  this? I assume you've already designed the trading bots. Why not just run them yourselves and take 100% of the earnings instead of giving 70% to CFSGOLD holders? You're not going to need a million dollars to provide liquidity on BTC:bitGOLD.

You're launching with 10-20 CFSGOLD. That's not exactly big money.

Launching with the small amount of BitGold is just to test the funding system. We hope that once BitGold and other assets get started and our hedgebots begin providing a return we can scale CFSGOLD and other CFS assets as reliable, low risk financial products that will appeal to investors outside the bitshares community as well and drive attention and users to bitshares.

Regarding the expected return. I'm actually having a hard time figuring out the best way to model it, because it's impossible for us to predict how much demand there will be for actually trading bitgold on the exchange platforms themselves (rather than buy into bitgold to hold or maybe use it as an on ramp for BTS). Depending on the kind of trading people do we can accomodate it with smaller or larger pools of capital. I'm considering that a better way to offer CFS assets is with a fixed return rather than the current model, because with the current model all CFS asset holders will have their return reduced every time new CFSGOLD is issued.

Is it necessary to issue new CFSGOLD? Just do it Bershire Hathaway style

[liondani]

I'm considering that a better way to offer CFS assets is with a fixed return rather than the current model, because with the current model all CFS asset holders will have their return reduced every time new CFSGOLD is issued.

Yes but be very careful and don't follow I3s paradigm to change the "rules" every now and then, because even if it is to the right direction, investors (specially the "old" ones) will loose confidence... (I think you know what I mean )