2.5 Years Ago...

[Empirical1.2]

The maker proposal pays actual trading fees to liquidity providers and not future fees!

To me the MAKER proposal seems to suggest offering a share of future fees in exchange for providing liquidity.

An instantaneous reallocation does little more than shift the equilibrium price. Instead we propose to redistribute future market fees generated after a market has been bootstrapped to the risk takers that facilitated the growth of that market.

Understanding by Example

If a particular asset issuer defines their DECAY rate such that 50% of all MSHARES are allocated in the first year, then someone who provides 100% of the liquidity would earn 50% of all future market fees in exchange for liquidity provision.

If the market starts out small with $10K / 24hr volume, and then turns into a $30M 24/hr volume then the market fees of 0.2% will yield $30,000 per day, half of which would belong to the individual who provided a meer $10K of liquidity in the first year. Meanwhile those who provide $10K of liquidity once $30M of volume is reached will get a very small number of MSHARES.

Assuming a market provides a useful function for traders, these incentives should easily encourage early adopters to bootstrap the market.

https://github.com/cryptonomex/graphene/issues/475

& personally I don't think you can really bootstrap the market in this way because when future BTS price expectations are neutral to negative like now, shorts will again be reluctant to come close to the peg.

[xeroc]

The maker proposal pays actual trading fees to liquidity providers and not future fees! (I was wrong)

[Empirical1.2]

There is no way to reward people who are "SHORT" because the blockchain cannot know whether or not someone is short.

OK, I would have thought because the blockchain knows which accounts to margin call/force settle that the blockchain knows which accounts are short and by how much. (If a person has a corresponding long position that the blockchain doesn't know about I don't think that's a problem for the reasons stated in my reply to Xeroc above - They are adding to the BitAsset CAP, removing BTS from exchanges & temporary circulation. Their effective yield is greatly reduced due to fees and total collateral required compared to genuine shorts who got their order filled & we only have to provide the variable yield when BTS price expectations are neutral to negative as we saw in BTSX days when the reverse is true there is plenty of shorting demand & during that period incentives would be wasteful.)

You can pay people interest for open orders kept on the books that ultimately get filled.  Doing so will improve liquidity. The further the order is from the settlement price the longer someone will have to wait to have it filled and hence interest is only paid to those who commit to holding the currency *AND* providing liquidity.

That makes sense, I don't know if paying them out of future fees ad infinitum is worthwhile though because when BTS short to medium term price expectations are neutral to negative Shorts won't want to come close to the peg again but the trading fees that could incentivize them would be going to MAKERS for past services rendered.

[Pheonike]

Interesting,

So could the blockchain reward people who keep orders within say 3% of the settlement price. When an order is filled,  some fraction of the fee the system get is distributed to every who has an open order within that that percentage. Maybe increase percentage to 5% for lifetime members. Of course the amount of the fee received is proportion to how large and how long the order has been open.

[bytemaster]

There is no way to reward people who are "SHORT" because the blockchain cannot know whether or not someone is short.

You can pay people interest for open orders kept on the books that ultimately get filled.  Doing so will improve liquidity. The further the order is from the settlement price the longer someone will have to wait to have it filled and hence interest is only paid to those who commit to holding the currency *AND* providing liquidity. 

[Empirical1.2]

My bad you're right. Interest should be paid to bitasset creators. I was just placing in the same bag as holders but they're completely different things. I agree with you on that. There should be an incentive for bitasset creators.

@BunkerChain Labs maybe apply that idea to shorters!

I can create bitassets without contributing to either the markets nor liquidity .. simply by borrowing at a 5x ratio and NOT selling.
How is that supposed to be profitable? Instead I think we need MAKER to pay liquidity providers!

You mean 5x collateral?

It depends whether we can only pay yield on the first 100% of collateral and also charge 0.2% trading fees as described in my post.

If the yield was say 8% per annum on your first 100% of collateral...

Then borrowing at 5x ratio and taking a 1x long position.You would be locking up 6X BTS but only receiving the yield on 1X, so your yield would only be 1.3% a year. If you paid 0.2% fees on each side, it would take months to make it even a tiny bit worthwhile.

If you wanted to do that great, you would be HODLing a lot of BTS, keeping it off the centralized exchanges and out of circulation & you would have added to the BitAsset CAP, which is also important because in terms of investor & business perception, this is what we're competing against..

Uphold: $2.06 Million
Tether: $1.4 Million
Nubits: $0.74 Million
BituSD: $0.1  Million

Our USD product has 2.5% of existing Crypto Market Share so it's hard to credibly say we can see ourselves changing the world. Increased BitAsset creation would help that. 

[xeroc]

My bad you're right. Interest should be paid to bitasset creators. I was just placing in the same bag as holders but they're completely different things. I agree with you on that. There should be an incentive for bitasset creators.

@BunkerChain Labs maybe apply that idea to shorters!

I can create bitassets without contributing to either the markets nor liquidity .. simply by borrowing at a 5x ratio and NOT selling.
How is that supposed to be profitable? Instead I think we need MAKER to pay liquidity providers!

[Akado]

It would be great to get back to a dividend because I really want to see a bitshares bank. I would stitch over in a heartbeat.

agree, dividends were the most interesting features and a great marketing point.

this. can't dividends come from the fee pool? the same fees that the committee just collected to bring more liquidity. we can't do everything at the same time but maybe an idea to consider in the future? or allocate some percentage of those fees as interest.

That was our strongest selling point at the time I believe. It was taken away because of delegate pay, well, we don't have that anymore and we have the fee pool. That fee is to be used to improve liquidity. Interest is an incentive for people to create and hold bitassets.

While I think forced settlement should be at less than 1-1, I agree with BM that due to the forced settlement function, dividends might make BitAssets trade above the peg....

Attempting to boost the value of BitUSD with yield is counter productive once the new approach to BitAssets is internalized and shorts know they can be force settled at the price feed at any time. Under these rules BitUSD already has a floor and paying yield on BitUSD would only serve to raise BitUSD above the floor and break the peg.

https://bitshares.org/blog/2015/06/08/lessons-learned-from-bitshares-0.x/#socialized-yield-is-broken

I think in the current market conditions the dividend needs to be paid to shorts to bring them closer to the peg.
https://bitsharestalk.org/index.php/topic,21125.0.html

My bad you're right. Interest should be paid to bitasset creators. I was just placing in the same bag as holders but they're completely different things. I agree with you on that. There should be an incentive for bitasset creators.

@BunkerChain Labs maybe apply that idea to shorters!

[BunkerChainLabs-DataSecurityNode]

It would be great to get back to a dividend because I really want to see a bitshares bank. I would stitch over in a heartbeat.

agree, dividends were the most interesting features and a great marketing point.

this. can't dividends come from the fee pool? the same fees that the committee just collected to bring more liquidity. we can't do everything at the same time but maybe an idea to consider in the future? or allocate some percentage of those fees as interest.

That was our strongest selling point at the time I believe. It was taken away because of delegate pay, well, we don't have that anymore and we have the fee pool. That fee is to be used to improve liquidity. Interest is an incentive for people to create and hold bitassets.

I brought this up in discussion last night with someone else.. there was some kind of programmable issue with the whole setup from what they recalled. I suggested exactly what you just said.. taking the fees from the system (a portion anyways) and then distributing them perhaps to balances that are vesting for a certain period. This would effectively make for a 'savings' type of account within an account. I am not a fan of locked up BTS.. but if people want to store their value in a Smartcoin it makes sense this way to offer interest based on our usage.

The spin off 'should' be.. those that do take advantage of it are incentivized to get others trading on the DEX.. the more they do, the higher their interest/dividend payout is going to be. It would be pretty easy to extrapolate a % based on vesting amount and fees being generated.

The downside to this though is that we got half the committee looking to drive fees pretty much to zero. Which means the returns on such a setup might end up being really really small.

It is also going to require some extra work on the GUI to make it clear to people how to put their balances into 'interest bearing savings'.

Thoughts?

[Empirical1.2]

It would be great to get back to a dividend because I really want to see a bitshares bank. I would stitch over in a heartbeat.

agree, dividends were the most interesting features and a great marketing point.

this. can't dividends come from the fee pool? the same fees that the committee just collected to bring more liquidity. we can't do everything at the same time but maybe an idea to consider in the future? or allocate some percentage of those fees as interest.

That was our strongest selling point at the time I believe. It was taken away because of delegate pay, well, we don't have that anymore and we have the fee pool. That fee is to be used to improve liquidity. Interest is an incentive for people to create and hold bitassets.

While I think forced settlement should be at less than 1-1, I agree with BM that due to the forced settlement function, dividends might make BitAssets trade above the peg....

Attempting to boost the value of BitUSD with yield is counter productive once the new approach to BitAssets is internalized and shorts know they can be force settled at the price feed at any time. Under these rules BitUSD already has a floor and paying yield on BitUSD would only serve to raise BitUSD above the floor and break the peg.

https://bitshares.org/blog/2015/06/08/lessons-learned-from-bitshares-0.x/#socialized-yield-is-broken

I think in the current market conditions the dividend needs to be paid to shorts to bring them closer to the peg.
https://bitsharestalk.org/index.php/topic,21125.0.html

[Akado]

It would be great to get back to a dividend because I really want to see a bitshares bank. I would stitch over in a heartbeat.

agree, dividends were the most interesting features and a great marketing point.

this. can't dividends come from the fee pool? the same fees that the committee just collected to bring more liquidity. we can't do everything at the same time but maybe an idea to consider in the future? or allocate some percentage of those fees as interest.

That was our strongest selling point at the time I believe. It was taken away because of delegate pay, well, we don't have that anymore and we have the fee pool. That fee is to be used to improve liquidity. Interest is an incentive for people to create and hold bitassets.

[fuzzy]

Yeah, I wish I knew how make a GUI that took advantage of our ability to have the first decentralized zero counterparty risk automatic dividend paying bond market.

But at least we have the ability, we just need a coder.  Gee I wonder if there are any computer geeks who would like to make money by cornering the BitShares bond market the same way that Onceuponatime cornered the stealth transactions market.

maybe if we would get ff our asses and put tokens into the hands of developers to there who could see the potential.  unfortunetely it seems we prefer to spend most of our time talking about rather than reaching out to them...which doesnt get results.

[tonyk]

It would be great to get back to a dividend because I really want to see a bitshares bank. I would stitch over in a heartbeat.

But also look at what we have now - 3 second transaction times. I'd saywe're better placed now despite the mkt cap. I just think we have presentation issues.

Do you recall why it was taken away in the first place?

"Dilution" to pay delegates.

I think so ...yee.
When you think about it, pretty unfortunate actually.

PS I think empirical (version o.oo1) liked that move the most /s... so he must remember it vividly.

[fav]

It would be great to get back to a dividend because I really want to see a bitshares bank. I would stitch over in a heartbeat.

agree, dividends were the most interesting features and a great marketing point.

[sittingduck]

It was taken away to prevent harvesting