Would you support 2% dilution to BitAsset Yield for a 6 month limited trial?

[sudo]

how many  normal people would like to use bitUSD  ……？？？？？？？？？
is the mobile wallet  easy  enough？？
is there more and more forum use bitUSD？

[Samupaha]

Yip, it's a worker that distributes BTS for BitUSD owners which BTS owners can mitigate via yield harvesting.

I appreciate your POV, however personally I refer to any expansion of the current supply as dilution. (While you can argue the current supply includes the reserve pool, it's the act of bringing that supply to market which dilutes shareholders today in practical terms & often much more than the headline figure due to fairly thin speculative demand supporting current price levels.)

I agree though the question is whether it will increase revenue/profit/users/BTS demand enough to justify the cost and hopefully I've made a strong enough case in this thread why that will be the case. (Like many POS minting type rewards the majority of the cost is fairly neutral/circular and goes back to existing shareholders so is unlikely to create large sell pressure, while at the same time increasing new demand for BitUSD which creates net new demand for BTS as well as removing BTS from centralized exchanges, making BitUSD the market leader by CAP and holders and possibly making BitAsset liquidity operations cheaper, which should all be valuation positive for BTS.)

I just think it's probably very counterproductive to even mention the word "dilution". It will create instant gut reaction for some people: "no way I'm going to approve that!" But if you instead talk about for example "an effective way of using development funds" you might get a much better reaction.

Shareholders need to understand that we have a constant rate of development funds coming out from the reserve pool. So the question is: what's the most effective way of using them? What projects will raise the price of BTS and what are just waste of money? And then approve only the profitable ones.

[Empirical1.2]

Do you think DASH Masternodes or PPC minting rewards are anti-free market? Most POS alts these days offer various rewards which can be mitigated by holders if they engage in the network positive behaviour the reward is attempting to incentivize.

This proposed inflation would encourage people to hold equal long and short positions in the DEX simultaneously in order to avoid dilution.  That doesnt sound like making bitAssets useful, it sounds like forcing BTS holders to take on risk and needlessly manage some positions just in order to not lose value.

I think this is one of the only potentially valid points you have made against the proposal.  @Empirical1.2, can you speak to the risk of having the simultaneously long and short positions advocated by your proposal?

Ander is right that if BTS declines you can be margin called or force settled. This would mean you either have to

A) Manage your overall position in a significant BTS decline

If you failed to do this and were force settled/margin called you'd have to sell some BitUSD and then re-short to rebalance your position. This process would add to liquidity though.

B) Short with more than 100% collateral. This is the lazy option, it reduces the effective yield you are getting but it makes it less likely you'll have to manage it. (However provided total BitUSD in circulation < 1/3 of BTS value, you could short with 200% collateral and not be affected by the yield worker proposal.)

This is a positive as BitAssets would become more collateralised/safe.

C) You could also apply tonyk's suggestion listed in the OP of giving some of the yield to shorts, so that shorting with more collateral incurs less of a loss and yield harvesting is made easier. This would also create some new shorting demand which adds to liquidity.

I'd be interested how risky others view it and how hard they feel it would be to manage that risk. Bytemaster for example describes yield harvesting as very low risk.

Under BitShares the BitAsset holders receive a yield simply by holding BitUSD. This yield was between 1% and 5% APR on average. Unfortunately, yield harvesting can happen at any time by someone shorting to themselves to gain a very low risk return... 

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

so this would be a "temporary" feature that would last only until the bond market was ready?

It could even be removed before then if it was not producing positive results.

@Empirical1.2:  How the yield harvesting fits in with a bond market is another good question and one that should be discussed further.  And I don't mean if the yield harvesting isn't working.  I mean if it IS working.  Do we continue it when the bond market is finally ready?   Do they complement each other?  Do they conflict?  Please walk me through that.

If there is no good reason to have both, then I would only be interested in the yield harvesting if it can be implemented a lot more quickly than a bond market (for instance, if it would take 1-2 months to implement yield harvesting, but 6+ months to implement bond market).   

The bond market would work similarly to lending at Poloniex I believe. So if you had BitUSD you may make a loan offer to someone who wanted gain BitUSD leverage. So this is how you could generate free market interest on your BitUSD.

So this would incentivise BitUSD demand (because people want interest) without any yield worker proposal.

Personally I still see a lot of value in having a little yield on BitAssets through the method stated in the OP so BitUSD still has an advertisable USP (Yield) for  less sophisticated BitUSD holders for a fairly neutral cost to shareholders. (However we could see by the market reaction to doing it how valuable it was/wasn't to BTS value in practice.)

Also yes I imagine this proposal could be implemented within 30 days of being approved (not that I know anything about coding) whereas the bond market is not currently under development AFAIK and is surely 6+ months away.

[tbone]

so this would be a "temporary" feature that would last only until the bond market was ready?

It could even be removed before then if it was not producing positive results.

@Empirical1.2:  How the yield harvesting fits in with a bond market is another good question and one that should be discussed further.  And I don't mean if the yield harvesting isn't working.  I mean if it IS working.  Do we continue it when the bond market is finally ready?   Do they complement each other?  Do they conflict?  Please walk me through that.

If there is no good reason to have both, then I would only be interested in the yield harvesting if it can be implemented a lot more quickly than a bond market (for instance, if it would take 1-2 months to implement yield harvesting, but 6+ months to implement bond market).   

[tbone]

Do you think DASH Masternodes or PPC minting rewards are anti-free market? Most POS alts these days offer various rewards which can be mitigated by holders if they engage in the network positive behaviour the reward is attempting to incentivize.

This proposed inflation would encourage people to hold equal long and short positions in the DEX simultaneously in order to avoid dilution.  That doesnt sound like making bitAssets useful, it sounds like forcing BTS holders to take on risk and needlessly manage some positions just in order to not lose value.

I think this is one of the only potentially valid points you have made against the proposal.  @Empirical1.2, can you speak to the risk of having the simultaneously long and short positions advocated by your proposal?

[tbone]

Do you think DASH Masternodes or PPC minting rewards are anti-free market? Most POS alts these days offer various rewards which can be mitigated by holders if they engage in the network positive behaviour the reward is attempting to incentivize.

Well, DASH specifically is a scam.  

Regarding most PoS coins providing interest to forgers, this has a purpose of encouraging people to support the network. 
But BTS is DPoS so it doesnt need that.

You're using an overly narrow definition of what it means to support the network.  But the fact is that creation of BitAssets is critical, so incentivizing it DOES support the network.

[Empirical1.2]

so this would be a "temporary" feature that would last only until the bond market was ready?

It could even be removed before then if it was not producing positive results.

How will you know, that "positive" results (if you will have them) were produced by this feature?

It's obviously hard to directly relate cause and effect. However I would say some of the positive results we may see and may mostly attribute to this initiative, if they happened within 8 weeks of starting it...

1. Poloniex & BTC38 BTS wallets decrease significantly. (This is positive as BTS is over-exposed to them.)

2. Much more BitUSD demand on the DEX (short demand too, if we implement tonyk's variation) This is positive as it increases liquidity in all market conditions not just when BTC/BTS is declining and people want a USD hedge.

3a) BTS price increasing due to new BitUSD demand increasing.
b) BTS price increasing due to rapidly increasing our USD SmartCoin market share from 2.4% to a Market Leader position by USD CAP and unique users giving the market confidence BTS can bootstrap SmartCoins and thus increase BTS's valuation based on forward estimates of SmartCoin adoption as we go from least to most likely to rule/dominate the SmartCoin market over competitors.

If there were no other major features released like the bond market but BTS rapidly increased in value, say above $20/$25 million, all else equal, shareholders might infer that this initiative played a significant role.

4. Hard to quantify but may see many new businesses saying 'Hi we accept BitUSD, want to spend some here?' Which may happen less if it wasn't worth millions of dollars with thousands of holders thanks to this.

5. Hard to quantify but we may see increased use of the DEX in general as passive BTS shareholders move their BTS off exchanges and become familiar with SmartCoins thanks to yield harvesting.

I have also recommended that this worker proposal should not be started the same time as an expensive liquidity proposal so we can also see better which is producing results. https://bitsharestalk.org/index.php/topic,21547.msg280724.html#msg280724

While cause and effect are hard to judge, we all know how BTS & the DEX has struggled for 18 months and if there were positive BTS results like the ones above it may be attributable to this and It will be up to shareholders to individually evaluate as best they can.

[yvv]

so this would be a "temporary" feature that would last only until the bond market was ready?

It could even be removed before then if it was not producing positive results.

How will you know, that "positive" results (if you will have them) were produced by this feature?

[Empirical1.2]

When compared to the high cost BTS shareholders are paying in other areas that they can't recoup, create direct selling pressure & isn't likely to increase product demand, I think this is very lucrative to at least attempt on a trial basis

Just because its not as big of a mistake as the merger dilution doesn't make it good.

Of course  But as this cost is largely circular in that it can be mitigated and mostly go back to existing shareholders, like other POS incentive schemes, the actual amount that would be lost/create selling pressure is very low while at the same time it would create new BitUSD demand and by extension BTS demand almost immediately and so hopefully increase the value of BTS. (Unlike other developments that make BTS more attractive and feature rich but don't directly increase demand enough to offset their cost in the short term especially when a lot of the BTS used to fund it must be sold to meet expenses.) So that combo I believe makes it BTS price positive very quickly as opposed to other initiatives which at least in the short term are not, was the point I was trying to make.

[Ander]

When compared to the high cost BTS shareholders are paying in other areas that they can't recoup, create direct selling pressure & isn't likely to increase product demand, I think this is very lucrative to at least attempt on a trial basis

Just because its not as big of a mistake as the merger dilution doesn't make it good.

[Empirical1.2]

so this would be a "temporary" feature that would last only until the bond market was ready?

It could even be removed before then if it was not producing positive results. 

[giant middle finger]

so this would be a "temporary" feature that would last only until the bond market was ready?

[Empirical1.2]

Do you think DASH Masternodes or PPC minting rewards are anti-free market? Most POS alts these days offer various rewards which can be mitigated by holders if they engage in the network positive behaviour the reward is attempting to incentivize.

Well, DASH specifically is a scam.  

Regarding most PoS coins providing interest to forgers, this has a purpose of encouraging people to support the network. 
But BTS is DPoS so it doesnt need that.

This proposed inflation would encourage people to hold equal long and short positions in the DEX simultaneously in order to avoid dilution.  That doesnt sound like making bitAssets useful, it sounds like forcing BTS holders to take on risk and needlessly manage some positions just in order to not lose value.

In doing so you would receive all the benefits listed in the OP and people who made the effort would likely receive value  in excess of the amount their BTS was affected (Provided BitAssets in circulation < 1/2 BTS market value.)

This would also hopefully create new demand for BitUSD which would increase new demand for BTS and so increase the value of BTS.

When compared to the high cost BTS shareholders are paying in other areas that they can't recoup, create direct selling pressure & isn't likely to increase product demand, I think this is very lucrative to at least attempt on a trial basis

[Zapply]

I think this is a terrible idea that does nothing but steal value from BTS bulls (people who hold BTS), and give it to BTS bears (people who hold bitUSD instead of BTS). 

This will not achieve the goals you want of encouraging bitasset adoption, rather it will reduce the incentive to hold BTS, reduce the value of BTS, take money away from bulls and give it to bears.

You can still maintain your current BTS position by yield harvesting. Being long BitUSD and short BitUSD at the same time.

So it doesn't take any value from BTS holders provided they yield harvest. However this would remove BTS from the centralized exchanges and make most shareholders owners of BitAssets while still maintaining their current overall BTS positons. 

(Provided total BitAssets in circulation < 1/2 of BTS market capitalization, then directing funds to yield can be mitigated by yield harvesting as far as I understand.)

So you are forced to take a bunch of margin positions that are opposite each other in order to avoid having your money stolen from you? 

How is that the free market?    What happens if the price moves a bunch in one direction and one of your positions gets margin called, then it moves back where it started?

Build real utility that makes people want to use bitAssets, rather than introducing a tyrannical rule system that forces them to. 

If you implement this, the people you are trying to force to buy bitAssets will not buy bitAssets, they will sell all their BTS and leave the project.
 

The key is take something will grow value in time backed something Asset will lost value in time

[Ander]

Do you think DASH Masternodes or PPC minting rewards are anti-free market? Most POS alts these days offer various rewards which can be mitigated by holders if they engage in the network positive behaviour the reward is attempting to incentivize.

Well, DASH specifically is a scam.  

Regarding most PoS coins providing interest to forgers, this has a purpose of encouraging people to support the network. 
But BTS is DPoS so it doesnt need that.


This proposed inflation would encourage people to hold equal long and short positions in the DEX simultaneously in order to avoid dilution.  That doesnt sound like making bitAssets useful, it sounds like forcing BTS holders to take on risk and needlessly manage some positions just in order to not lose value.