Author Topic: poll for the percent based transfer fee  (Read 10449 times)

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jakub

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Re: poll for the percent based transfer fee
« Reply #15 on: January 21, 2016, 11:45:43 am »
I do not understand why you set cap to 100 BTS, which means each time one transfer more than 100k BTS will pay 100BTS, about $0.3
in my view the cap should be close or a little above 0.0001 BTC, that's why I prefer 20 BTS.
it will be funny if the BTS transfer be more expensive than inter-Bank CNY transfer.

If you are a user who needs to transfer bigger amounts on a regular basis, you need to become LTM.

That's the whole point of the referral program.
If you buy LTM, BitShares can offer you very competitive pricing, much better than inter-bank fees.
If you don't buy LTM, you will only have the small transfers cheap, not the big ones.

In other words, there is only one group of users who are not taken care of: those who want to transfer big amounts on a regular basis but still don't want to buy LTM.
And my point is this: we will be fine if we ignore this group of users - they need to go away, BitShares is not for them.

The original intention of percentage-based fees was to offer the following deal to the big-transfer guys:
- either you agree to sponsor the small-transfer guys
- or you buy LTM

If the percentage-based fees project turns out to be a backdoor way to kill the referral program, it will be hard for me to continue supporting it.

EDIT: It's not fair to compare non-LTM transfer fees to inter-bank transfer fees.
You don't get access to inter-bank transfers if you haven't paid huge fees beforehand for setting up and maintaining an account there.
« Last Edit: January 21, 2016, 11:54:25 am by jakub »

Offline BunkerChainLabs-DataSecurityNode

Re: poll for the percent based transfer fee
« Reply #16 on: January 21, 2016, 11:54:23 am »
I do not understand why you set cap to 100 BTS, which means each time one transfer more than 100k BTS will pay 100BTS, about $0.3
in my view the cap should be close or a little above 0.0001 BTC, that's why I prefer 20 BTS.
it will be funny if the BTS transfer be more expensive than inter-Bank CNY transfer.

If you are a user who needs to transfer bigger amounts on a regular basis, you need to become LTM.

That's the whole point of the referral program.
If you buy LTM, BitShares can offer you very competitive pricing, much better than inter-bank fees.
If you don't buy LTM, you will only have the small transfers cheap, not the big ones.

In other words, there is only one group of users who are not taken care of: those who want to transfer big amounts on a regular basis but still don't want to buy LTM.
And my point is this: we will be fine if we ignore this group of users - they need to go away, BitShares is not for them.

The original intention of percentage-based fees was to offer the following deal to the big-transfer guys:
- either you agree to sponsor the small-transfer guys
- or you buy LTM

If the percentage-based fees projects turns out to be a backdoor way to kill the referral program, it will be hard for me to continue supporting it.

+5%

I am also concerned for the refer program and how this will continue to support refers. So far its going in the right direction near as I can tell.
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Offline bitcrab

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Re: poll for the percent based transfer fee
« Reply #17 on: January 21, 2016, 12:02:01 pm »
I do not understand why you set cap to 100 BTS, which means each time one transfer more than 100k BTS will pay 100BTS, about $0.3
in my view the cap should be close or a little above 0.0001 BTC, that's why I prefer 20 BTS.
it will be funny if the BTS transfer be more expensive than inter-Bank CNY transfer.

If you are a user who needs to transfer bigger amounts on a regular basis, you need to become LTM.

That's the whole point of the referral program.
If you buy LTM, BitShares can offer you very competitive pricing, much better than inter-bank fees.
If you don't buy LTM, you will only have the small transfers cheap, not the big ones.

In other words, there is only one group of users who are not taken care of: those who want to transfer big amounts on a regular basis but still don't want to buy LTM.
And my point is this: we will be fine if we ignore this group of users - they need to go away, BitShares is not for them.

The original intention of percentage-based fees was to offer the following deal to the big-transfer guys:
- either you agree to sponsor the small-transfer guys
- or you buy LTM

If the percentage-based fees project turns out to be a backdoor way to kill the referral program, it will be hard for me to continue supporting it.

EDIT: It's not fair to compare non-LTM transfer fees to inter-bank transfer fees.
You don't get access to inter-bank transfers if you haven't paid huge fees beforehand for setting up and maintaining an account there.

I am not only considering myself.
I have paid 40000 BTS to buy 2 LTM, with 2 old LTM, I have totally 4 LTMs.
what I care more is how to attract users. and how to make Bitshares grow.
currently less than 200 transfers everyday. do you think referral program really work?

Offline bitcrab

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Re: poll for the percent based transfer fee
« Reply #18 on: January 21, 2016, 01:19:39 pm »
OK, here'are some summaries of analysis.

1. Minimum fee does not significantly influence total fee. Given 1% and 300 max (as suggested by jakub), min fee change from 1 to 6 only increases 1.8% of total fee. So I easily conclude that minimum fee is not that important, and lower minimum fee is more preferable to encourage micro-transactions. However, the minimum fee should be efficient to prevent spam. Therefore, I fixed the minimum fee to 1 BTS.

2. Given 1 BTS minimum, I tested scenarios proposed by bitcrab and jakub (0.1%/20 and 1%/300). Bitcrab's was 137k BTS fee in total while Jakub's is 1,830k BTS. I think the former is too small compared to transfer fees collected with 30 BTS flat fee. (137k vs. 13,212k, roughly 1%). While, the latter is 14%.

3. I tried to find a way to have the same level of fee as actually collected. But all scenarios are less then the 13mil BTS. So I conclude that it is impossible to have equal amount of fee under percentage-based fee system.

4. I checked how many txs are supposed to pay more (over 30 BTS) under 1% fee. It is found that 45% (7317/16243) of all transfers are affected implying more burdens in general. However, the rate decreases to 30% with 0.1% fee, and 25% with 0.05%. Meanwhile, 55% of transfers are benefited with 1% fee system, 69% with 0.1%, and 75% with 0.05%. The ratio of minimum-fee-paying transfers are 37%, 50%, 53% respectively (under 1%/0.1%/0.05% fee system).

These are my findings so far, and the followings are my opinions and suggestions.

1. I tried to have 5% of total fee actually collected. That is around 600k BTS.

2. I compared two fee rates, 0.1% and 0.05%. With 0.1%, 150 BTS maximum has 593k BTS fee. With 0.05%, 300 BTS maximum has 615k BTS fee.

3. I think lower percentage+high maximum is preferred to higher percentage+low maximum, because it is easy to justify "the bigger, the more". Given 0.05%/300, transfers over 600k BTS ($1800) pay the maximum fee of 300 BTS ($1).

So my suggestion is 0.05%/1/300. If you want to analyze by yourself, https://cryptofresh.com/bts_tx_history.csv will be the starting point (Thanks Roadscape).

upon on your analysis, I think maybe 0.5%/1/20 or even 1%/1/20 is better.
we need to encourage tipping, but we should not hurt big transfers, 300 BTS is unacceptable in any condition.


Offline emailtooaj

Re: poll for the percent based transfer fee
« Reply #19 on: January 21, 2016, 01:48:24 pm »
Thanks clayop for digging further into the numbers.   +5%
Below is my response from a previous post which seems to be inline with this conversation.
For the record, I didn't vote because I feel % based fee's should be applied for SMARTCOINS only. 
Trades and/or Transfers should be flat rate fee based on a tier system....
Someone mentioned earlier we need a sales person's perspective... so I'll throw in my 2 bits.
I agree that the majority here is correctly identifying that Bitshares main core is (and I'm listing in order what I see as priority)...
1) The DEX
2) Core SmartCoins (USD, CNY, EURO, etc.)

Since the DEX is the main backbone of our system, IMO it would be silly to over tax the activity of the exchange and in turn, dry up any incentive for future/present trading.  The only way (again IMO) is to set trading activity fees pegged to a percentage. I can see 0.5% being a great starting charge for trading fee's, but capped at 300 or so BTS, allowing those Large Quantity (ie Big Player) traders ample breathing room to play.
Putting this in a number perspective...
3000 BTS order = 15 BTS fee
20,000 BTS order = 100 BTS fee
60,000+ BTS order = 300 BTS fee
I don't see how you can effectively and fairly asses a "regional" fee or flat fee when it comes to DEX trading.

Now obviously we know that BTS (the underlying share) is the crucial life force, so squeezing that available supply line will help increase BTS value while also "guiding" people to start utilizing SmartCoin's more as the primary currency, while also giving more demand for creating more USD, which is what we want correct?   
So for a BTS Transfer fee, in my mind, should be a flat somewhat higher tiered fee...
1 to <100 BTS = 1 BTS fee
100> -1000 BTS = 5 BTS flat fee
and then 1 BTS per 1000 BTS thereafter and cap it a 500 BTS threshold.

For CORE SmartCoin transfer fee's.. I'd make it a percentage base fee of 0.05% and cap it at $5 USD (or it's equivalent to that specific SmartCoin).
So a $100 USD transfer would cost five cents ($0.05). 
$10,000+ USD would be $5 USD fee
Again, this will help keep Big players in the game to do big money transfers utilizing SmartCoins.

For UIA's transfer fees... again, I'd make it a low percentage like the CORE asset fees I just mentioned.  I almost hate saying this... but I could see it making sense to ONLY use CORE SmartCoin's for the transfer fee's of UIA's. 

So all-in-all keep DEX fees low.  Create higher friction for BTS transfers.  SmartCoin fees low to keep the flow!
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Offline wallace

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Re: poll for the percent based transfer fee
« Reply #20 on: January 21, 2016, 01:57:41 pm »
I do not understand why you set cap to 100 BTS, which means each time one transfer more than 100k BTS will pay 100BTS, about $0.3
in my view the cap should be close or a little above 0.0001 BTC, that's why I prefer 20 BTS.
it will be funny if the BTS transfer be more expensive than inter-Bank CNY transfer.

If you are a user who needs to transfer bigger amounts on a regular basis, you need to become LTM.

That's the whole point of the referral program.
If you buy LTM, BitShares can offer you very competitive pricing, much better than inter-bank fees.
If you don't buy LTM, you will only have the small transfers cheap, not the big ones.

In other words, there is only one group of users who are not taken care of: those who want to transfer big amounts on a regular basis but still don't want to buy LTM.
And my point is this: we will be fine if we ignore this group of users - they need to go away, BitShares is not for them.

The original intention of percentage-based fees was to offer the following deal to the big-transfer guys:
- either you agree to sponsor the small-transfer guys
- or you buy LTM

If the percentage-based fees project turns out to be a backdoor way to kill the referral program, it will be hard for me to continue supporting it.

EDIT: It's not fair to compare non-LTM transfer fees to inter-bank transfer fees.
You don't get access to inter-bank transfers if you haven't paid huge fees beforehand for setting up and maintaining an account there.

why bitshares lack of users, just because these kind of words.

a feature, a system, people choose not to use it, the problem must be up to the system itself, not the users.
give me money, I will do...

jakub

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Re: poll for the percent based transfer fee
« Reply #21 on: January 21, 2016, 02:28:29 pm »
why bitshares lack of users, just because these kind of words.

a feature, a system, people choose not to use it, the problem must be up to the system itself, not the users.

I strongly disagree.
We cannot satisfy everyone.

We are talking about one kind of user: one who is rich enough to move large amounts of money on a regular basis but is not willing to pay $100 for LTM.
Do you really think we can sponsor such a user and still have a sustainable business that supports its own development?

This is an illusion. We are a business, not a charity.

Please give me an example of an existing system where you can move a large amount of money on pay-as-you-go basis without paying substantial transfer fees.
And please include:
- cost of covering the price volatility risk (so for bitcoin transfers add the cost of hedging volatility and converting from and to fiat)
- cost of maintaining a bank account (so for legacy systems add the monthly cost of keeping a business account with a bank)

jakub

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Re: poll for the percent based transfer fee
« Reply #22 on: January 21, 2016, 02:36:49 pm »
I am not only considering myself.
I have paid 40000 BTS to buy 2 LTM, with 2 old LTM, I have totally 4 LTMs.
Yes, I know. We are not talking about power users like you. You've bought your LTMs and you're fine as far as transfer fees are concerned.

Quote
what I care more is how to attract users. and how to make Bitshares grow.
This is what I care as well.
All I'm asking is to ignore one kind of users - those who are wealthy but not willing to pay for moving their money around.
Those users want to abuse us and I don't want to allow this.

Quote
currently less than 200 transfers everyday. do you think referral program really work?
The referral program program has not had any chance to work for a very simple reason: without fiat gateways and liquidity there is no product to sell.

Offline wallace

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Re: poll for the percent based transfer fee
« Reply #23 on: January 21, 2016, 04:08:12 pm »
why bitshares lack of users, just because these kind of words.

a feature, a system, people choose not to use it, the problem must be up to the system itself, not the users.

I strongly disagree.
We cannot satisfy everyone.

We are talking about one kind of user: one who is rich enough to move large amounts of money on a regular basis but is not willing to pay $100 for LTM.
Do you really think we can sponsor such a user and still have a sustainable business that supports its own development?

This is an illusion. We are a business, not a charity.

Please give me an example of an existing system where you can move a large amount of money on pay-as-you-go basis without paying substantial transfer fees.
And please include:
- cost of covering the price volatility risk (so for bitcoin transfers add the cost of hedging volatility and converting from and to fiat)
- cost of maintaining a bank account (so for legacy systems add the monthly cost of keeping a business account with a bank)

the reality is almost no new user use the referral system. what you're talking about is most like we already have 2 crowd, 1 is the referral system users, 1 is the crowd want to take advantage of the system. do we?

shortly meet the requirement of speculators is not charity, currently we need every thing we can do to attract the speculators, even the system have no profit, these people will bring much more users to the system and system will have profit in future because of this. a long vision is a business just needed. honestly I think we should reduce the transfer fee to 1 BTS for at least 3 months or half an year.
« Last Edit: January 21, 2016, 04:10:37 pm by wallace »
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Offline clayop

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Re: poll for the percent based transfer fee
« Reply #24 on: January 21, 2016, 04:24:10 pm »
OOPS... I made a great mistake and should re-run my analysis. Sorry for this guy. I will do this ASAP.
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jakub

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Re: poll for the percent based transfer fee
« Reply #25 on: January 21, 2016, 04:33:40 pm »
the reality is almost no new user use the referral system. what you're talking about is most like we already have 2 crowd, 1 is the referral system users, 1 is the crowd want to take advantage of the system. do we?

shortly meet the requirement of speculators is not charity, currently we need every thing we can do to attract the speculators, even the system have no profit, these people will bring much more users to the system and system will have profit in future because of this. a long vision is a business just needed. honestly I think we should reduce the transfer fee to 1 BTS for at least 3 months or half an year.

So you suggest that if we just lower the transfer fees to 1 BTS, people would start using the system.
I disagree with this.

I think there are more fundamental reasons involved:
- lack of fiat gateways
- lack of liquidity for trading.

But this is turning into another lower-transfer-fees debate.
This thread is supposed to be about percentage-based fess policy and not about lowering the transfer fess in general.

Offline clayop

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Re: poll for the percent based transfer fee
« Reply #26 on: January 21, 2016, 04:51:45 pm »
Quick report:

New analysis confirms me minimum fee does not change a lot, consisting with previous conclusion. So 1 BTS makes sense.
And I found 0.2% is an efficient fee level.

To reach the same level of the actually collected fee, we can choose 100 BTS maximum.
50 BTS maximum generates about 60%, and 20 BTS maximum 30%.

Based on this, I could choose 0.2%/1/50, much closer to bitcrab's suggestion.
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Offline yvv

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Re: poll for the percent based transfer fee
« Reply #27 on: January 21, 2016, 05:09:24 pm »

Please give me an example of an existing system where you can move a large amount of money on pay-as-you-go basis without paying substantial transfer fees.
And please include:
- cost of covering the price volatility risk (so for bitcoin transfers add the cost of hedging volatility and converting from and to fiat)
- cost of maintaining a bank account (so for legacy systems add the monthly cost of keeping a business account with a bank)

The problem is that you don't transfer money in bitshares, you transfer tokens which represent money. To buy a bitcoin with fiat on bitshares you need:

- deposit fiat to gateway -> pay fee
- send fiat IOU to bitshares wallet ->  pay fee
- exchange fiat IOU for BTC IOU -> pay fee
- withdraw BTC IOU into gateway -> pay fee
- send BTC to bitcoin wallet -> pay fee

These fees add up. Ideally, it would be good if all transactions on blockchain were dirt cheap, but how do we motivate people to run witness nodes then? Is there any other way than paying them BTS?

Offline Akado

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Re: poll for the percent based transfer fee
« Reply #28 on: January 21, 2016, 05:56:24 pm »

Please give me an example of an existing system where you can move a large amount of money on pay-as-you-go basis without paying substantial transfer fees.
And please include:
- cost of covering the price volatility risk (so for bitcoin transfers add the cost of hedging volatility and converting from and to fiat)
- cost of maintaining a bank account (so for legacy systems add the monthly cost of keeping a business account with a bank)

The problem is that you don't transfer money in bitshares, you transfer tokens which represent money. To buy a bitcoin with fiat on bitshares you need:

- deposit fiat to gateway -> pay fee
- send fiat IOU to bitshares wallet ->  pay fee
- exchange fiat IOU for BTC IOU -> pay fee
- withdraw BTC IOU into gateway -> pay fee
- send BTC to bitcoin wallet -> pay fee

These fees add up. Ideally, it would be good if all transactions on blockchain were dirt cheap, but how do we motivate people to run witness nodes then? Is there any other way than paying them BTS?

This doesn't make sense if I just want to get Bitcoins on my Bitcoin wallet I go directly to the last step after I deposit money on the exchange...
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jakub

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Re: poll for the percent based transfer fee
« Reply #29 on: January 21, 2016, 07:13:50 pm »

Please give me an example of an existing system where you can move a large amount of money on pay-as-you-go basis without paying substantial transfer fees.
And please include:
- cost of covering the price volatility risk (so for bitcoin transfers add the cost of hedging volatility and converting from and to fiat)
- cost of maintaining a bank account (so for legacy systems add the monthly cost of keeping a business account with a bank)

The problem is that you don't transfer money in bitshares, you transfer tokens which represent money. To buy a bitcoin with fiat on bitshares you need:

- deposit fiat to gateway -> pay fee
- send fiat IOU to bitshares wallet ->  pay fee
- exchange fiat IOU for BTC IOU -> pay fee
- withdraw BTC IOU into gateway -> pay fee
- send BTC to bitcoin wallet -> pay fee

These fees add up. Ideally, it would be good if all transactions on blockchain were dirt cheap, but how do we motivate people to run witness nodes then? Is there any other way than paying them BTS?

That's exactly the point. The whole process is so damn complex at this moment that our internal transfer fees do not matter much - I'm talking here about big amounts, e.g. transferring 100k BTS.

If I transfer 100k BTS I don't really care if I pay 30 BTS or 100 BTS or 1 BTS, because:
- I pay huge fees at all the other steps anyway
- I'm mainly concerned about the complexity of the process, not about having to spend the extra 100 BTS

What would you prefer in case of transferring 100k BTS?
- pay 1 BTS for the transfer fee and have all the complexity and high fees on the gateways
- pay 100 BTS for the transfer fee and have cheap & easy gateways

Improving the gateway process is the key here, not lowering the transfer fees.
And the most important financial incentive for a gateway to come into existence is the referral program (e.g. OpenLedger is about to start this kind of fiat gateway business)

So we need these things:
- efficient gateways and liquidity.
- very low transfer fees for small tips
 
And we do not need low transfer fees for big amounts.
These people can afford to pay more and they will if the process is safe and smooth.