[ANN] Moonstone.io development and crowdfunder diary

[bitsapphire]

Thanks everybody for your thoughts! You definitely spawned a lot of ideas with the team!

We're in the final testing phase of our crowdfunding mechanism (Thanks metaexchange!). We would like to ask the community whether you want both a BTC and BTS based fundraiser or a pure BTC fundraiser. Please let us know about your preference and your reasoning!

We initially wanted to include both as to increase the total available liquidity for the fundraiser, however, looking at the order books of most of the BTS exchanges out there it seems selling the BTS on the market at market prices (rather than with a trade strategy) could potentially depress the price of BTS even further. This would obviously not be the case for BTC.

Looking forward to your input!

It would be cool to use BitAssets like BitUSD - In all seriousness it would probably be silly to keep all of the raised funds in BTS or Bitcoin due to the volatility. It's far more important to know the dollar value of funds raised (unless of course you intend to pay everybody with a fixed BTS/BTC amount each month regardless of their exchange rate against the dollar).

That is our main concern. While for the Moonstone fundraiser it is unimportant in what unit the funds are raised (because we need to convert it for business operations all to EUR anyway), it can and most likely will become an issue for the buyback via the delegates.If the unit of account fluctuates a lot vis-a-vis BTS (which is what delegates are paid in), then this can lead to the situation in which we can never buy-back all tokens.

Another concern of ours is that many people in the crypto scene want to be able to diversify their positions somehow. Because neither stocks not bonds are available, they seem to really like our approach which is denominated in terms of USD.

Here is a copy of a PM that I sent to fuzzy:


I would really, really like to see the Moonstone fundraiser be successful.

That having been said, I will say that I am having second thoughts about being a large investor. I am worried about the value of the USD during the time of the repayment period. I think that the US is going to have to do another "quantitative easing" or do something else that will greatly diminish the value of its fiat currency.

Since Moonstone plans to convert any donations, no matter whether BTS, bitUSD, bitGOLD BTC. or whatever, at the time of donation into the fiat dollar equivalent price at that time - and then repay 1.15 times that fiat value - I think the risk to investors is greatly increased. If the fiat dollar value drops by one third, then getting back 1.15 times the dollar value of my donation is not very appealing.

If Moonstone would both accept bitGOLD and repay 1.15 times the bitGOLD investment - that would alleviate my concerns. And they could hold funds in bitGOLD except what they HAD to convert to another form for project purposes as the need arises.

I would like to hear Taulant's input on this fear of mine. Otherwise, I'm afraid my investment will be less than I would hope.

Worrying about the stability of the USD during the buyback period is a fair concern. To be honest though, the USD is nonetheless the healthiest and most liquid currency out there. It will be the last to fall even if something really crazy happens. Our operational expenses are almost all EUR denominated, and we nonetheless are denominating the Moonstone crowdfunder in terms of USD because the Euro is much more likely to suffer some shock than the USD.

BitGold would suffer the same problem. Looking at the price chart of Gold for the last quarter you see a 10-15% fluctuation. If we denominated the crowdfunder in terms of bitGold that would expose the buy-back period also to a 10-15% per quarter fluctuation. What is even worse the donors would need to be by definition long on gold, or at least bitGold, something I doubt most people here are.

Reality is, most investors are at least to some extend long on USD because they know that nothing else is a safer bet. The USD wins in this regard as a unit of account not because it is good, but rather because it is not bad.

My intuition says: "Use BitAssets!!"

using BitAssets, and NOT converting immediately, will

1) increases BitAssets exposure,
2) increase BitAssets liquidity,
3) increase BitShares marketcap
4) Provides stability for your fund,
5) Provides security for your fund (multi-sig!!)
6) Provides transparency for your fund (public audit!)

While we agree with everything on your list, we think bitAssets are not ready for usage yet. As pointed out in earlier discussions, at Bitsapphire we believe that the initial beachhead market for BitShares is not bitAssets, but rather the decentralized exchange and order book for UIA and gateway assets such as stocks and bonds. While bitAssets have a chicken and egg problem (you need liquidity to get liquidity), UIAs and Gateway IOUs don;t have that problem. The only thing needed to kickcstart the liquidity of the UIA/IOU market on BitShares is in our opinion the ID certification mechanism for gateway KYC purposes. Creating sufficient liquidity on UIAS/IOUs should naturally lead people to using bitUSD or similar bitAssets as a liquid and instant open position against all other UIAs/IOUs on the chain. We think this is the right approach to create liquidity on BitShares.

This means that holding the fundraiser funds in bitUSD on the chain would be at this point counterproductive as we need all the funds for operational purposes anyway. However, I hope that 1-2 years down the line the created UIA/IOU liquidity will be so great that the bitUSD/USD spread will also be minimal and make such cumbersome conversions a thing of the past.

Agreed - it is a lot of risk to take on for a potential 15% (which could take a very long time). I'd much rather it if moonstone took an approach of say selling 20% of equity in the company/product at the crowdfunder with no buyback (with an IPO for the equity share on the internal exchange)

Good that you mention that! Version 1 of the wallet is intended to be open sourced. The community is really paying for it to become a public good rather than to become something closed source like coinbase. We included the buy-back mechanism just so at least some of the risk can be covered and so that at the end the community as a whole can repay the risk takers (via the delegates) for a public good, without having to take on risks which the public did not agree to.

As for selling stock, we hope to be able to do that for V2 and 3 of the wallet for which we already have the featureset defined. That is when the wallet will be able to ID users for gateways. Turns out we can do that quite easily and legally in Kosovo, we're just trying to figure out the legalities of offering stock in this way to citizens in the US, China, and other places. Many countries seem to have "lockin" laws which we might not be aware of at this point. With a successfull initial fundraiser for the MIT license we know we can finish up the wallet properly and get to the next stage faster.

My thoughts:

Don't accept BTS for the reasons you stated.

If you are unwilling to keep bitUSD as bitUSD then don't accept that either.

That seems to be the best approach so far, as we won't hold any position in any crypto anyways. It's all operational expenses.

But what about return of investment should be 1.15 x (whatever asset used for donation)? Under that scenario I will make a much larger donation.

i would suggest this. Yes!

bitsapphire wants to race 130k USD - so they could do it 130k worth of USD, they would just convert at the point of donation to the current exchange rate and the donors can be paid in their asset back. But maybe for this proposel they need more then one UIA to track what they collected. moonGold, moonSilver, moonUSD, moonBTC , moonBTS, moonCNY . Sounds nice to me, and i like the idea that the investors will be paid in their invested asset class.

This could only work in terms of BTS. We have pondered this option for some time. What we could do is issue 1.15 moonstone tokens for every BTS we receive (or BTC in terms of current BTS market price) and then repay directly in terms of BTS from the delegate proceedings. Some really early Bitcoin mining operations used to do this. However this would mean that only people long on BTS would donate.

Maybe we should do a poll about this potential implementation? We will look into this.

[Shentist]

My thoughts:

Don't accept BTS for the reasons you stated.

If you are unwilling to keep bitUSD as bitUSD then don't accept that either.

this is a fundraiser in the BitShares Community, so we need absolutly bitAssets - who else will accept our solutions? We has to show what we can provide. I am not worried about selling pressure, this would be 130k so under 1 % of the market cap.

In my opinion as more ways are accepted, as more attractive it will be - so accept BTC, BTS and every major bitAsset (USD, CNY, Gold, Silver)

But what about return of investment should be 1.15 x (whatever asset used for donation)? Under that scenario I will make a much larger donation.

i would suggest this. Yes!

bitsapphire wants to race 130k USD - so they could do it 130k worth of USD, they would just convert at the point of donation to the current exchange rate and the donors can be paid in their asset back. But maybe for this proposel they need more then one UIA to track what they collected. moonGold, moonSilver, moonUSD, moonBTC , moonBTS, moonCNY . Sounds nice to me, and i like the idea that the investors will be paid in their invested asset class.

[onceuponatime]

My thoughts:

Don't accept BTS for the reasons you stated.

If you are unwilling to keep bitUSD as bitUSD then don't accept that either.

this is a fundraiser in the BitShares Community, so we need absolutly bitAssets - who else will accept our solutions? We has to show what we can provide. I am not worried about selling pressure, this would be 130k so under 1 % of the market cap.

In my opinion as more ways are accepted, as more attractive it will be - so accept BTC, BTS and every major bitAsset (USD, CNY, Gold, Silver)

But what about return of investment should be 1.15 x (whatever asset used for donation)? Under that scenario I will make a much larger donation.

[Shentist]

My thoughts:

Don't accept BTS for the reasons you stated.

If you are unwilling to keep bitUSD as bitUSD then don't accept that either.

this is a fundraiser in the BitShares Community, so we need absolutly bitAssets - who else will accept our solutions? We has to show what we can provide. I am not worried about selling pressure, this would be 130k so under 1 % of the market cap.

In my opinion as more ways are accepted, as more attractive it will be - so accept BTC, BTS and every major bitAsset (USD, CNY, Gold, Silver)

[bitmarket]

My thoughts:

Don't accept BTS for the reasons you stated.

If you are unwilling to keep bitUSD as bitUSD then don't accept that either.

[mdj]

Here is a copy of a PM that I sent to fuzzy:


I would really, really like to see the Moonstone fundraiser be successful.

That having been said, I will say that I am having second thoughts about being a large investor. I am worried about the value of the USD during the time of the repayment period. I think that the US is going to have to do another "quantitative easing" or do something else that will greatly diminish the value of its fiat currency.

Since Moonstone plans to convert any donations, no matter whether BTS, bitUSD, bitGOLD BTC. or whatever, at the time of donation into the fiat dollar equivalent price at that time - and then repay 1.15 times that fiat value - I think the risk to investors is greatly increased. If the fiat dollar value drops by one third, then getting back 1.15 times the dollar value of my donation is not very appealing.

If Moonstone would both accept bitGOLD and repay 1.15 times the bitGOLD investment - that would alleviate my concerns. And they could hold funds in bitGOLD except what they HAD to convert to another form for project purposes as the need arises.

I would like to hear Taulant's input on this fear of mine. Otherwise, I'm afraid my investment will be less than I would hope.

Agreed - it is a lot of risk to take on for a potential 15% (which could take a very long time). I'd much rather it if moonstone took an approach of say selling 20% of equity in the company/product at the crowdfunder with no buyback (with an IPO for the equity share on the internal exchange)

[Pheonike]

I think you should do BTC and bitassets but maybe work it in a way that bitassets get a higher return percentage wise than BTC

[CLains]

My intuition says: "Use BitAssets!!"

using BitAssets, and NOT converting immediately, will

1) increases BitAssets exposure,
2) increase BitAssets liquidity,
3) increase BitShares marketcap
4) Provides stability for your fund,
5) Provides security for your fund (multi-sig!!)
6) Provides transparency for your fund (public audit!)

[onceuponatime]

Here is a copy of a PM that I sent to fuzzy:


I would really, really like to see the Moonstone fundraiser be successful.

That having been said, I will say that I am having second thoughts about being a large investor. I am worried about the value of the USD during the time of the repayment period. I think that the US is going to have to do another "quantitative easing" or do something else that will greatly diminish the value of its fiat currency.

Since Moonstone plans to convert any donations, no matter whether BTS, bitUSD, bitGOLD BTC. or whatever, at the time of donation into the fiat dollar equivalent price at that time - and then repay 1.15 times that fiat value - I think the risk to investors is greatly increased. If the fiat dollar value drops by one third, then getting back 1.15 times the dollar value of my donation is not very appealing.

If Moonstone would both accept bitGOLD and repay 1.15 times the bitGOLD investment - that would alleviate my concerns. And they could hold funds in bitGOLD except what they HAD to convert to another form for project purposes as the need arises.

I would like to hear Taulant's input on this fear of mine. Otherwise, I'm afraid my investment will be less than I would hope.

[Shentist]

someone suggested you are accepting bitGOLD etc. and pay it in bitGold back with interest. So could be a good way to give our main assets a purpose and you can collect a good portion of anything. And the investors can choose in which asset they "trust" the most to be stable and get the 15% interest on top.

Will spread the risk for you. Or do you need to sell everything on day 1 after the fundraiser?

[mdj]

We're in the final testing phase of our crowdfunding mechanism (Thanks metaexchange!). We would like to ask the community whether you want both a BTC and BTS based fundraiser or a pure BTC fundraiser. Please let us know about your preference and your reasoning!

We initially wanted to include both as to increase the total available liquidity for the fundraiser, however, looking at the order books of most of the BTS exchanges out there it seems selling the BTS on the market at market prices (rather than with a trade strategy) could potentially depress the price of BTS even further. This would obviously not be the case for BTC.

Looking forward to your input!

It would be cool to use BitAssets like BitUSD - In all seriousness it would probably be silly to keep all of the raised funds in BTS or Bitcoin due to the volatility. It's far more important to know the dollar value of funds raised (unless of course you intend to pay everybody with a fixed BTS/BTC amount each month regardless of their exchange rate against the dollar).

[chryspano]

I think that "whales" won't have a problem if you exclude BTS, but smaller fish that only hold BTS and can't afford to purchase BTC with fiat will be forced to sell some of their BTS or will stay out of the fundraising. My guess is that there will be some selling pressure in any case. 

[xiahui135]

We're in the final testing phase of our crowdfunding mechanism (Thanks metaexchange!). We would like to ask the community whether you want both a BTC and BTS based fundraiser or a pure BTC fundraiser. Please let us know about your preference and your reasoning!

We initially wanted to include both as to increase the total available liquidity for the fundraiser, however, looking at the order books of most of the BTS exchanges out there it seems selling the BTS on the market at market prices (rather than with a trade strategy) could potentially depress the price of BTS even further. This would obviously not be the case for BTC.

Looking forward to your input!

Will moonstone support bit-assets, like bitCNY crowdfunding?

[bitsapphire]

We're in the final testing phase of our crowdfunding mechanism (Thanks metaexchange!). We would like to ask the community whether you want both a BTC and BTS based fundraiser or a pure BTC fundraiser. Please let us know about your preference and your reasoning!

We initially wanted to include both as to increase the total available liquidity for the fundraiser, however, looking at the order books of most of the BTS exchanges out there it seems selling the BTS on the market at market prices (rather than with a trade strategy) could potentially depress the price of BTS even further. This would obviously not be the case for BTC.

Looking forward to your input!

[xiahui135]

Contrary to what some people believe now I think that 1.0 (though a true 1.0!) is important for market adoption. Potential gateways are hesitant to integrate with unproven software which handles some sort of value exchange. Bitcoin only got away with it because its user base grew faster than the code quality.

As for Moonstone, we think of Bitshares as the potential combined order book and price discovery mechanism for tons of assets which could be issued in the near future via gateways (primarily stocks and bonds, secondarily fiat IOUs). BitAssets, the one feature the core team is currently pushing, won't be in our opinion the main driving factor for some time to come. That is because bitAssets have a chicken and egg problem: They need high liquidity to attract liquidity.

However, IOUs/UIAs don't have that problem and it is obvious that there is a huge unmet market out there of people and companies who want to have a combined, automated, and secure order book like that. This is why we position Moonstone not primarily as a bitAsset wallet but as a wallet where you can manage your IOUs/UIAs.

In the mid-to-long term Moonstone will hopefully start supporting the Bitshares market value by providing the on-blockchain ID verification for third party gateways. That way you can easily sign up to gateways around the world and trade all kinds of stocks/bonds legally. This is definitely part of our plan for 2015.

Good! This is the right direction!