Author Topic: Is Diluting BTS 2.5% for +5% BitAsset Yield very low cost to Shareholders?  (Read 12852 times)

0 Members and 1 Guest are viewing this topic.

Offline Empirical1.2

  • Hero Member
  • *****
  • Posts: 1366
    • View Profile
Lots of coins already offer POS minting rewards, which exchanges currently mint their balances and return the rewards to their customers which is presumably a much simpler process?

Quote
In case of 5% yield, this has to be perpetuated until the ponzi colapses.

On the contrary, BitAssets have had variable yield before ranging from 0-5% in BTS 1.0, it was removed in 2.0, nothing collapsed...

Quote
The yield can be only financed from the latecomer investors, when the marketcap will start to deflate, it's over.

It's also not a ponzi scheme, it's a redistribution scheme.


Whatever yield,  the dilution has to be fianced /compensated by new investors buying in,
otherwise the value of single BTS would go down and no one would like that.

This is not true imo. When PPC offers 1% minting rewards. It doesn't have to be funded by new investors coming in.
All existing coin holders have to do is put their coins into minting and the net result is neutral.

Similarly when BTS offers 2.5% minting rewards. It doesn't have to be funded by new investors coming in.
All existing coin holders have to do is put their coins into minting (yield harvesting) and the net result is neutral.
If you want to take the island burn the boats

Offline jtme

Lots of coins already offer POS minting rewards, which exchanges currently mint their balances and return the rewards to their customers which is presumably a much simpler process?

Quote
In case of 5% yield, this has to be perpetuated until the ponzi colapses.

On the contrary, BitAssets have had variable yield before ranging from 0-5% in BTS 1.0, it was removed in 2.0, nothing collapsed...

Quote
The yield can be only financed from the latecomer investors, when the marketcap will start to deflate, it's over.

It's also not a ponzi scheme, it's a redistribution scheme.


those POS coins do not generate yield on derived assets, so they can provide whatever fixed yield they
want.

in BTS  1.0 the yield was financed from shorters, it was a bit ponzi too, but not so evident.

Whatever yield,  the dilution has to be fianced /compensated by new investors buying in,
otherwise the value of single BTS would go down and no one would like that.

Offline Empirical1.2

  • Hero Member
  • *****
  • Posts: 1366
    • View Profile
This is nothing more than a proposal for elaborate ponzi scheme - or it will
be perceived so by many. The yield can be only financed from the latecomer investors,
when the marketcap will start to deflate, it's over.

There is not a problem with demand , there is a problem with supply
NO one will be incentivized by this to short and sell USD especialy after
they can get 5% yield on it.

It will not move bts from exchanges - exchanges will simply implement shorting
and yield harvesting for those who keep bts at them.

At least BM proposal for Subsidizing Market Liquidity is for jumpstarting of
liquidity. Eventualy later the subsidy can be removed. 
In case of 5% yield, this has to be perpetuated until the ponzi colapses.

Quote
It will not move bts from exchanges - exchanges will simply implement shorting
and yield harvesting for those who keep bts at them.

Lots of coins already offer POS minting rewards, which exchanges currently mint their balances and return the rewards to their customers which is presumably a much simpler process?

Quote
In case of 5% yield, this has to be perpetuated until the ponzi colapses.

On the contrary, BitAssets have had variable yield before ranging from 0-5% in BTS 1.0, it was removed in 2.0, nothing collapsed...

Quote
The yield can be only financed from the latecomer investors, when the marketcap will start to deflate, it's over.

It's also not a ponzi scheme, it's a redistribution scheme.

You're taking X% from BTS via dilution and saying you can have it back if you yield harvest. So it's fairly self sustaining even if no new money comes into the system. However at the very least, it creates BitAssets, increasing our CAP & number of BitUSD holders from 2% Crypto USD market share to the market leader.

Uphold  $2 million
Tether   $1.4 million
Nubits   $0.78 Million
BitUSD  $0.098 Million 

However it should also increase new BitUSD demand but in order for them to get their variable yield, hopefully >5% , over the course of a year, they'll have to buy $1 of BTS today. This increased BTS demand potentially increases the BTS price which potentially changes market sentiment to the point more people want to take a leveraged position on BTS via shorting. While it seems ponzi-ish the system doesn't collapse once a saturation point is reached or even if it doesn't work in the first place as it's not a set $ amount that is funding returns but a set %, which can also be mitigated by yield harvesting.

The market will be aware that it's variable and removable just like it's been removed in the past, if it works the net result is a market leader position in terms of BitUSD CAP and number of users and hopefully ultimately a bustling BitUSD economy due to third parties offering products, services, payments and other via BitUSD as they are attracted by the size of that market and number of users, all with BitUSD sitting in their account they can send anywhere in the world in 3 seconds.  Just the way Bitcoin gained 100 000 merchants despite the fact that 70%+ was hoarded and hadn't moved for 6 months + http://www.ofnumbers.com/2014/11/22/approximately-70-of-all-bitcoins-have-not-moved-in-6-or-more-months/

Even if the price declined and the yield was much lower, or even if you removed it and it went to zero, it would still be more favourable than taking your USD balance back to a bank which are expected to have negative rates well below 1% in the near future http://www.zerohedge.com/news/2016-02-10/something-very-disturbing-spotted-morgan-stanley-presentation-slide  (as well as less privacy, more capital controls etc.)

Do you view all POS minting rewards like DASH, PPC etc. as Ponzi schemes?
« Last Edit: February 21, 2016, 11:14:01 am by Empirical1.2 »
If you want to take the island burn the boats

Offline jtme

This is nothing more than a proposal for elaborate ponzi scheme - or it will
be perceived so by many. The yield can be only financed from the latecomer investors,
when the marketcap will start to deflate, it's over.

There is not a problem with demand , there is a problem with supply
NO one will be incentivized by this to short and sell USD especialy after
they can get 5% yield on it.

It will not move bts from exchanges - exchanges will simply implement shorting
and yield harvesting for those who keep bts at them.

At least BM proposal for Subsidizing Market Liquidity is for jumpstarting of
liquidity. Eventualy later the subsidy can be removed. 
In case of 5% yield, this has to be perpetuated until the ponzi colapses.

Offline Empirical1.2

  • Hero Member
  • *****
  • Posts: 1366
    • View Profile
control bitAsset  bitcny bitusd……
dump bts
Lack of collateral
bts fucked over
bitCNY bitUSD holder win
all  fucked

1. Sudo 100 000 BTS - 2.5% dilution = 97 500 BTS  :'(

2. Sudo Buy 50 000 BTS BitCNY + Sudo Short 50 000 BTS BitCNY = No dilution = Big BitCNY  :D

从一个小种子强大的树干可能会增长

If you want to take the island burn the boats

Offline sudo

  • Hero Member
  • *****
  • Posts: 2255
    • View Profile
  • BitShares: ags
control bitAsset  bitcny bitusd……
dump bts
Lack of collateral
bts fucked over
bitCNY bitUSD holder win
all  fucked

Offline Empirical1.2

  • Hero Member
  • *****
  • Posts: 1366
    • View Profile
They offered the liquidity maker for free. Yield wasn't part of the offer.

Yeah it's probably best not to do them at the same time so people aren't confused as to which measure is actually producing the best most cost-effective results.

The liquidity operation requires an additional 2-2.5 BTC of new BTS demand per day to be self sustaining.
I'm also not sure that it won't be slightly gamed and also whether it will be enough of a USP over Uphold/NuBits to attract that level of new demand every day initially. I still think overall it will be a net positive but not a significant one and would probably prefer if it was started for half the cost.

The yield operation is fairly circular in cost in that any shareholder can mitigate the cost by yield harvesting and it has the tangible benefit of removing BTS from exchanges, making BitUSD the leader by CAP and number of users and gives BitUSD a USP no-one else has atm.
So I think the cost/benefit ratio is huge and when people see those metrics increasing and when we can tell everyone hey BitUSD offers  +5%, the net BTS gains will be very big indeed. So it's probably best it's not started at the same time as the liquidity operation because people would be unclear which measure was being successful at increasing the value of BTS.

I also think now that it's been laid out we'll see competitors offering it BitAsset yield very much the same way as I mentioned they offer POS minting, in that it's a fairly circular/neutral cost that can be easily mitigated. So I predict competitors will add it this year & we'll be forced to anyway to stay competitive. But just like with existing competitors we won't be the market leader with attention and network effect that comes from doing it first so by then its impact will be fairly muted so hopefully we can end up testing it before then.

 
« Last Edit: February 20, 2016, 09:54:23 pm by Empirical1.2 »
If you want to take the island burn the boats

Offline abit

  • Committee member
  • Hero Member
  • *
  • Posts: 4664
    • View Profile
    • Abit's Hive Blog
  • BitShares: abit
  • GitHub: abitmore
+5% +5% +5%, great, good idea, i like it, just do it!

My man  8)  +5%

I'd like to say: don't waste time on that guy. Most of his posts are same, no matter what the OPs are talking about.
As a side effect, most of replies to his posts are ignored by me (I may have missed something).
BitShares committee member: abit
BitShares witness: in.abit

Offline Pheonike

They offered the liquidity maker for free. Yield wasn't part of the offer.

Offline mint chocolate chip

Let's not forget, developing this idea will not come cheap. That is a significant reason to consider the proposal by BM where he offerred to develop and implement it for free.

Offline Pheonike

I am thinking when shorting there can be an option to receive the short asset or the equivalent in treasury bills. We can call it the "SmartBond".


Offline Zapply

  • Jr. Member
  • **
  • Posts: 48
    • View Profile
  • BitShares: Zapstar
I'm all for yield, but i think it should be separate from this liquidity project.  I think the idea of setting up a treasure bill or bond that only accepts bitassets or initially just bitusd should be used for yield. When people create bitassets they either sit on them or sell them back into the market. Why not have a bond/bill for people to place their newly created bitassets into that can generate a return for them.

 Better yet, have the option at short creation to send thenewly crerated bitassets directly to a bond/bill.
This is good

Offline Pheonike

I'm all for yield, but i think it should be separate from this liquidity project.  I think the idea of setting up a treasure bill or bond that only accepts bitassets or initially just bitusd should be used for yield. When people create bitassets they either sit on them or sell them back into the market. Why not have a bond/bill for people to place their newly created bitassets into that can generate a return for them.

 Better yet, have the option at short creation to send thenewly crerated bitassets directly to a bond/bill.
« Last Edit: February 20, 2016, 05:28:09 pm by Pheonike »

Offline tonyk

  • Hero Member
  • *****
  • Posts: 3308
    • View Profile
This is why tonyk's idea initially sounded like genius, making BitUSD the center of the trading universe. As has been pointed out, it suffers from other concerns that make that approach a non-starter IMO.
Do you mind posting in the thread in question, the concerns you find significant and make the idea a 'non-starter'? Thanks
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline Thom

I believe a key reason for removing it was yield harvesting which made BitAsset yield approach zero & with a lot people hoarding.

Providing yield on USD doesn't work because of yield harvesting, people would create USD and sit on it until the rate of return approahed 0.
/quote]

Huh?

I mean, what did he THINK would happen? You offer an incentive and people move in that direction. The yield worked perfectly to attract buyers of BitUSD / BTS. Why else would you promote BitShares as an alternative to a bank? It serves a least 3 purposes:

1) It increases BitShares marketcap
2) It de-funds the banking cartel.
3) It helps people preserve their wealth from a shaky and corrupt banking system.

Granted, item 2 is not even a drop in the bucket, and would have virtually no affect on the "health" of the mainstream financial system, but it IS aligned with our long term goals and philosophy to be an alternative to mainstream banks. It isn't a short term goal.

Whether or not you provide savings incentives doesn't improve liquidity directly. For that you need to have a variety of products or services people want to trade for, and BitAssets are just one tool for those trades. Look at BitAssets as currency and it's clear you must have some to trade, but what are you trading for? The currency is the the medium to facilitate trade, BitAssets being just one of them. This is why tonyk's idea initially sounded like genius, making BitUSD the center of the trading universe. As has been pointed out, it suffers from other concerns that make that approach a non-starter IMO.

Seems to me with the advent of stealth just around the corner we have an opportunity to attract a lot of capitol into the system if we offer some type of yield. As was pointed out earlier if the yield rate is a parameter the committee / shareholders can set it could be tweaked as necessary.

How does BitShares stack up against the competition as a safe haven for wealth? What level of dividend / yield does DASH offer? What about others?
Injustice anywhere is a threat to justice everywhere - MLK |  Verbaltech2 Witness Reports: https://bitsharestalk.org/index.php/topic,23902.0.html