Idea for hyper profitability: shareholder responsibilities

[nicejeans]

Right now there is 500 million BTS just sitting on centralized exchanges, not available to pay any fees to the network, just sitting there ready to drag the price down.

So why dont we require shareholders to fulfill responsibilities to support the network? The point being to gradually force BTS off centralized exchanges and into accounts that are active on the DeX. Centralized exchanges that earn huge fees from their users trading BTS back and forth will find that they have to pay for that privilege.

This is how to do it:

Every account (possibly with a minimum amount of 1millioin BTS) is required to perform market making activity on BTS/USD (we can work out the details) using at least 1% of the account's balance of BTS, every single calendar month. All applicable accounts that dont do this pay 5% of their BTS as a penalty. An example criteria of market making is to place an order within 10% of the price feed for a minimum amount of time.

Again, all details subject to discussion.

The only problem with this idea is that the centralized exchanges wont like this and might coordinate their stake to vote themselves onto the committee and disable this feature. But they are still a minority even if they all vote together, and if the community votes for this then we take back control of BitShares into the hands of the real supporters that use the DeX. And we can start earning millions of BTS of in fees.

This idea has some characteristics as the old 5% inactivity fee that BM floated ages ago. Im ready to do market making with 1% of my stake if required by the network.

Terrible idea. Sounds like stealing to me.

Especially since I haven't even been able to migrate to 2.0 yet.

[Ander]

Forcing people to do something is not a good idea.

Incentivise people instead.  (And not 'you had better do this with your BTS or youll lose it', which is back to forcing people).




It looks like the blockchain has been profitable since 2.0 launch:
http://cryptofresh.com/reserve

However, I note that this is due to a huge jump due to over 2M BTS in fees on Nov 22.  What the heck happened on Nov 22 that caused that?

[tbone]

I agree with OP's sentiment, and I think the solution boils down to:

1. Better incentives for keeping funds on the DEX*
2. Better marketing of the incentives

*e.g. more sharedrops, security (2FA, easy "social" multisig), cool GUI, etc etc

If we combine ease-of-use with security and privacy (i.e. hosted wallet, 2FA, stealth transfers), I think we'll see a TON of funds move to the DEX.  Of course, it will also help a lot if we work in parallel to bootstrap liquidity in the BitAsset markets . 

[roadscape]

I agree with OP's sentiment, and I think the solution boils down to:

1. Better incentives for keeping funds on the DEX*
2. Better marketing of the incentives

*e.g. more sharedrops, security (2FA, easy "social" multisig), cool GUI, etc etc

[Empirical1.2]

While not universally popular, BTSX achieved a $100 million valuation with market knowledge that the annual 5% penalty could be applied.

Those were supposed to be burned, weren't they?
That's why the idea was tolerated imo.

Nah I believe it could have been directed to burning/incentives/development depending on what shareholders voted.

At one point there was even talk the inactivity fee could be applied to BitAssets.

Does this impact/conflict with the inactivity fee of btsx? Or does this not matter since we are dealing with BitUSD?

Inactive BitUSD is charged 5% and is given to the others as rewards.

Again with the presence of dilution, any penalties now is a big no no.

Not directly related but I think BitAsset interest + inactivity fee directed to rewards + an interest system that rewarded long term holders (topic of that thread) would have given BitUSD a great USP, especially during the crypto downturn. I think the bond market is how interest will be generated in future though.

[luckybit]

Right now there is 500 million BTS just sitting on centralized exchanges, not available to pay any fees to the network, just sitting there ready to drag the price down.

So why dont we require shareholders to fulfill responsibilities to support the network? The point being to gradually force BTS off centralized exchanges and into accounts that are active on the DeX. Centralized exchanges that earn huge fees from their users trading BTS back and forth will find that they have to pay for that privilege.

This is how to do it:

Every account (possibly with a minimum amount of 1millioin BTS) is required to perform market making activity on BTS/USD (we can work out the details) using at least 1% of the account's balance of BTS, every single calendar month. All applicable accounts that dont do this pay 5% of their BTS as a penalty. An example criteria of market making is to place an order within 10% of the price feed for a minimum amount of time.

Again, all details subject to discussion.

The only problem with this idea is that the centralized exchanges wont like this and might coordinate their stake to vote themselves onto the committee and disable this feature. But they are still a minority even if they all vote together, and if the community votes for this then we take back control of BitShares into the hands of the real supporters that use the DeX. And we can start earning millions of BTS of in fees.

This idea has some characteristics as the old 5% inactivity fee that BM floated ages ago. Im ready to do market making with 1% of my stake if required by the network.

We already lose a percentage of our value each year because of inflation of the BTS. I don't think there needs to be any more of that. Look at the percentage of supply that you have and if you want to maintain it then do something about it.

[unreadPostsSinceLastVisit]

While not universally popular, BTSX achieved a $100 million valuation with market knowledge that the annual 5% penalty could be applied.

Those were supposed to be burned, weren't they?
That's why the idea was tolerated imo.

[luckybit]

We just need to get the volume going and the money will move. I'd prefer to attract business with carrots rather than sticks. If we make a good platform that is cheaper and more honest, and perhaps if we can find some way to create a small yield, then we should not need to whip anyone to use the exchange. In the short term, I share your frustration.

Advertising is needed and a well functioning exchange. OpenLedger is going about it in the right way with Obits. First you have to create stakeholders who have it in their self interest to use the exchange and then you have to use banner ads like the other exchanges do.

Shapeshift ads were on Reddit and Coinmarketcap and Cointelegraph.

[Empirical1.2]

Coercing people into doing anything is never a good idea, even if the intentions are good. We already solved this when the fee requiring people to vote constantly was removed (dunno if that 'functionality' was ever on)

Given how much BitShares gets screwed by centralized exchanges, I think its time to do a bit of coercion. If BitShares was a company run by Trump, he would be thinking of things like this.

The original BTSX whitepaper was very good. It had a 5% annual penalty fee if you didn't access your account.

While not universally popular, BTSX achieved a $100 million valuation with market knowledge that the annual 5% penalty could be applied.

- It gave people an incentive to access their account and vote once a year. (To avoid the penalty fee)

-  I'm not sure how many BTS are still unclaimed but the 5% penalty fee probably could have made another 5-20 million BTSX available in July this year at a higher market cap, that would have been hundreds of thousands of dollars that could have been used for development.

At this stage though when we already have dilution any further penalties is a big no.

-----------------------------

What could work though once BTS becomes profitable is finding ways to incentivise keeping your BTS off centralized exchanges.

NuShares for example pays dividends and has 2% annual minting rewards, this keeps the majority of NuShares off the centralized exchanges.

[Samupaha]

While I'm sympathetic to the idea that "shareholders have responsibilities" I don't think this is a good idea. Market making isn't something that everybody can do without exposing themselves to unknown risks. Most shareholders don't have enough knowledge about the subject so they would have to take too much risk because they don't know what they are doing. I'm pretty sure this would backfire somehow sooner or later.

[xeroc]

Forcing people to "do something" with their money is not what BitShares stands for ..

[Akado]

You guys are right coercion is dumb, and will just hurt adoption. Was just trying to think of shortcuts as usual...

I think know it's really just a matter of time. Businesses will grow slowly, new ones will come along with more users too, more features developed. All we can do atm is manage BitShares the best way we can I guess and hope CNX has made good connections during their trips.

[speedy]

You guys are right coercion is dumb, and will just hurt adoption. Was just trying to think of shortcuts as usual...

[donkeypong]

We just need to get the volume going and the money will move. I'd prefer to attract business with carrots rather than sticks. If we make a good platform that is cheaper and more honest, and perhaps if we can find some way to create a small yield, then we should not need to whip anyone to use the exchange. In the short term, I share your frustration.

[Akado]

Coercing people into doing anything is never a good idea, even if the intentions are good. We already solved this when the fee requiring people to vote constantly was removed (dunno if that 'functionality' was ever on)

Given how much BitShares gets screwed by centralized exchanges, I think its time to do a bit of coercion. If BitShares was a company run by Trump, he would be thinking of things like this.

Because he has the resources and can have the luxury of doing so. Completely different circumstances. We are trying to get known atm, first of all. People are barely aware of BitShares, imposing stuff like that on newbies is bad imo