What to do with Revenue?

[luckybit]

Is the revenue really burned or is it put to the reserve pool?

If I have understood this right, it should go to reserve pool, where it stays until it is used to pay for workers and witnesses. This means that DAC is saving money to make sure that it can pay for workers in the future.

BTS Is not money, BTS is stake. So putting it into the reserve pool as BTS is in my opinion both inefficient and also quite fatuous.

Instead it should be put into the reserve pool as BitUSD or some other basket of assets and commodities. It's effective for Bitshares to have in it's reserve pool Trade.BTC, Trade.Ether, and stakes in it's competition, as long as it can be guaranteed legally that upon a vote these stakes can be put to use.

It would allow the reserve pool to grow off of something other than BTS which isn't a currency, and also diversify it's holdings which is smarter from a business risk perspective. It's not really that smart for a company to exclusively hold stock in itself as a reserve because if they have to sell it then it dilutes it's own company.

Microsoft purchased Apple stock. Rivals purchase each others stock and it's smart because it spreads the risk. Bitshares allows all of this so why not use the power?

I agree that the network will have to invest in itself. I don't know if worker proposals are implemented in any wallet yet. The blockchain supports it, so you can manually write your own proposal transactions. However, I don't know how much support wallets have for voting for workers. Feature parity was targeted first, now the new features (like workers) will probably be exposed in a controlled manner.

Of course but be smart about it and invest in the competition. Buying your own shares like that is just a share buy back, its not like BTS is money. Investing in your own company is called a buyback.

It's smarter to diversify and invest in other DACs. Bitshares in theory should be able to hold BTC, Ether, Storj, or whatever else, as long as you set up the mechanisms to do it, and by doing it that way you can turn Bitshares 2.0 into an investment bank and exchange rather than just an exchange which makes a profit and then buys its shares back only to sell them later.

Recycling your own shares creates unnecessary volatility when you can use other networks shares. If Bitshares owned shares in other things, in other assets, then even if the BTS isn't gaining in value, if the Storjcoin or Safecoins are gaining in value then the reserve has more buying power for future investments in Bitshares. It would seem Bitshares is the only DAC capable of stuff like this which would mean first mover advantage.

I vote that we put forth a worker proposal to allow Bitshares to hold any digital asset in it's reserve. The reserve shouldn't just hold BitUSD, it should be able to hold Bitcoin or anything else. A group of people should be elected to manage the fund, and determine which assets to buy, and we could vote these people in, but they can only buy and not spend. Or we can just have a vote on what to buy and let the network automatically buy according to the percentage of votes it gets.

[luckybit]

These sorts of posts highlight why we need to move toward the percentages in the GUI. The only thing that should matter to a BTS holder is the percentage of stake they hold in Bitshares Coop over time. If the percentage of stake increases then that is what matters, not how many "BTS" they hold because it's not a currency, it's a stake.

BTS you hold is a percentage stake in the network, an access token, a membership token, but it represents a percent number ultimately, and if you want more influence and more risk but also more reward you would want to increase your stake. Burning excess tokens helps all stakeholders, it reverses the dilution and if you think of the dilution as a loan, the burning deflation is the loan being paid back.

The BTS price will not reflect it when its only 300,0000 tokens out of billions but if it's 3 million tokens that would have a big impact, and if its 30 million or 300 million tokens it will have a much bigger impact, so it depends on the rate over time (the GUI should estimate this number based on current rates and provide graphic projections). The burn rate per day if it surpasses the dilution rate, would mean the Bitshares network is deflationary, which means it is profitable.

Revenue is reflected in the scarcity of the token. Scarce tokens rise in price easier for the people who are long term holders. Short term speculators who don't use the exchange might never want to be long term holders but the long term holders were promised 5% interest and not dilution. The dilution was not in the plans, and anything we can do to reward long term holders for being loyal through the dilution is worth it in my opinion.

[luckybit]

Burning is a good way to reduce supply. BTS are shares/stakes/votes, not currency. If you think about it as a currency then you'd care about revenue in BTS and might think burning currency makes no sense. BTS is not a currency, it's an asset, and to be an asset it has to appreciate over time or no one will ever hold it, and it will never be attractive.

BitUSD is a currency. Worker proposals should do their accounting in BitUSD or an even more stable currency, and let the BTS be deflationary. How much BTS there is should have no impact on how much BitUSD there is for worker proposals or upgrades.

BTS has to be held long term, and it has to be used as the backend for exchange. Burn as much as possible and you make what people do hold that much more valuable. If burning outpaces the dilution then you have deflation which is what was intended from the very beginning and which is why the initial 80 million dollar market cap was achieved in the beginning.

[fuzzy]

Is the revenue really burned or is it put to the reserve pool?

If I have understood this right, it should go to reserve pool, where it stays until it is used to pay for workers and witnesses. This means that DAC is saving money to make sure that it can pay for workers in the future.

And I am in super secret talks to get our forum a total upgrade (we will be able to tip and share posts on our social media sites directly from our forums)...and a sharebot that spans reddit, twitter, slack, mumble, and facebook.  If this is true, it looks like a good start for funding it. 

[Samupaha]

Is the revenue really burned or is it put to the reserve pool?

If I have understood this right, it should go to reserve pool, where it stays until it is used to pay for workers and witnesses. This means that DAC is saving money to make sure that it can pay for workers in the future.

[Empirical1.2]

For all intents and purposes destroying BTS is a waste of resources. The idea behind this "profit" sharing through burning BTS is that it is infeasible to coordinate a dividend payment schedule to all holders of BTS an burning them should have the same effect. This is fundamentally not true. The supply has decreased and so has the price. What dividend through capital appreciation have bitshare holders received? None.

I don't expect $2000 worth of BTS burning to be reflected in the short term volatile price of BTS, but if BTS is consistently profitable and consistently reducing supply, I expect it to have a significant effect. The first consistently profitable DAC should over time attract more investors too.

I would however support directing some revenue to BitAsset liquidity in particular.

[maqifrnswa]

I agree that the network will have to invest in itself. I don't know if worker proposals are implemented in any wallet yet. The blockchain supports it, so you can manually write your own proposal transactions. However, I don't know how much support wallets have for voting for workers. Feature parity was targeted first, now the new features (like workers) will probably be exposed in a controlled manner.

[fuzzy]

Over the past few days we have seen that the Bitshares DAC has become "profitable." That is, we have accrued more revenue than the cost of maintaining the network. I have seen bytemaster say that this profit has been burned, consequently reducing the supply of BTS by more than 500k units.

For all intents and purposes destroying BTS is a waste of resources. The idea behind this "profit" sharing through burning BTS is that it is infeasible to coordinate a dividend payment schedule to all holders of BTS an burning them should have the same effect. This is fundamentally not true. The supply has decreased and so has the price. What dividend through capital appreciation have bitshare holders received? None.

This profit, particularly at this precarious point in the life the bitshares network, needs to reinvested into the business rather than destroyed or even provided as a dividend if that were feasibly. No startup company has 100% dividend payment ratio and for good reason.

The most pressing concern for the functionality of the bitshares network is liquidity, both on the internal exchange and on other exchanges and gateways. This is where these 500k BTS (~$2,250) should have been allocated. If this profit is used to provide liquidity on the interna exchange there is no added sell pressure to drive down the price of BTS, which might be a concern if this capital were used for another endeavor such as marketing, or business development in other areas.

I don't know how to submit proposals or the logistics of changing our dividend payout ratio (i.e. burn rate) I just know that most important aspect of an exchange is liquidity, which we currently do not have.

To whom it may concern, can you please fix this so that we are not wasting resources that would otherwise allow us to provide a better service. Thanks

Very interesting take.

[speedy]

Market making for liquidity is currently pointless if most people's BTS are tied up in old 0.9 accounts because the migration is too complicated & buggy.

[speedy]

Burning revenue at a greater rate than the expenses/dilution is what the whole system is supposed to do.

If you feel that funds have to be spent to bootstrap liquidity on the internal exchange then thats what a worker proposal would be for. If that brings in more users thereby making BitShares more deflationary in the long term then I would vote for it.

[monsterer]

I guess its only profitable if you are long BTS?

[clout]

Over the past few days we have seen that the Bitshares DAC has become "profitable." That is, we have accrued more revenue than the cost of maintaining the network. I have seen bytemaster say that this profit has been burned, consequently reducing the supply of BTS by more than 500k units.

For all intents and purposes destroying BTS is a waste of resources. The idea behind this "profit" sharing through burning BTS is that it is infeasible to coordinate a dividend payment schedule to all holders of BTS an burning them should have the same effect. This is fundamentally not true. The supply has decreased and so has the price. What dividend through capital appreciation have bitshare holders received? None.

This profit, particularly at this precarious point in the life the bitshares network, needs to reinvested into the business rather than destroyed or even provided as a dividend if that were feasibly. No startup company has 100% dividend payment ratio and for good reason.

The most pressing concern for the functionality of the bitshares network is liquidity, both on the internal exchange and on other exchanges and gateways. This is where these 500k BTS (~$2,250) should have been allocated. If this profit is used to provide liquidity on the interna exchange there is no added sell pressure to drive down the price of BTS, which might be a concern if this capital were used for another endeavor such as marketing, or business development in other areas.

I don't know how to submit proposals or the logistics of changing our dividend payout ratio (i.e. burn rate) I just know that most important aspect of an exchange is liquidity, which we currently do not have.

To whom it may concern, can you please fix this so that we are not wasting resources that would otherwise allow us to provide a better service. Thanks