They should buy BTS and pay it out as SmartCoin interest including on their own IOU.USD.
Example Basket: IOU.USD, BitUSD, BitGold, BitSilver
Current BTS valuation $20 million
Company Z purchase 24 million BTS. Cost $200 000
They put the BTS in fund which directs 2 million BTS per month as yield possibly with a taper at the end.
Assuming the market is attracted by 10% p.a. on SmartCoins This will stimulate the rapid demand for 240 million BTS worth of the basket, tying up 500 million BTS. Including up to 60 million BTS, $500 000 worth of demand for their product. (though possibly less depending on their credibility if it's an uncollateralized IOU)
Increased SmartCoin demand increases BTS demand which raises the price of BTS so that the BTS they are directing to yield is able to incentivise an even higher $ amount of SmartCoins and IOU.USD creation.
Whereas if for example they offered a $50 sign up bonus for buying $100 IOU.USD it would cost them $200 000 to have customers create just $400 000 of their own product and have no impact on bootstrapping themselves or SmartCoins as people would claim the bonus and then sell their IOU.USD back. (This bonus would also have a positive impact on BTS price when they initially funded it but a negative price effect once people started dumping.)
Negative consequences of SmartCoin interest
1. SmartCoins would trade above the peg.
- Lower forced settlement to 95%.
- Introduce the liquidity subsidy already proposed. (let the subsidy stimulate the weak side of the order book around the peg, this will probably be the short side. Though it's possible the rapid increase in BTS value could balance out short and long demand.)
- Possibly direct some of the 2 million per month BTS to short yield.
2. Offering Yield on an IOU.USD could create up to $500 000 worth of IOU.USD demand even in a 4 SmartCoin basket that they only put $200 000 of BTS yield towards. Them selling this BTS or a larger amount as they expand could be a threat which is why I think given the benefits BTS should fund it itself.
Other:
They could increase/extend the promotion based on it's success &/or try something else.
Some form of unique identification may be necessary if you wanted to maximise the amount of unique individuals.Then you could also just pay yield for the first year and mimic teaser rate on savings accounts marketing strategy.
You could also stagger it so it starts at 500 000 BTS a month in yield and then slowly rises to 3 million a month, this could make the demand for SmartCoins increase more steadily over the period as opposed to creating a large % of the new demand very early on.
My traditional bank recently sent me two $50 Visa gift cards at 3 months and 1 year (if memory serves accurate) to keep a higher balance in savings with them. Further, I had to set an auto deposit to fund the account on an increasing basis.
Takeaway: Today I have a higher balance in savings with this bank and continue to utilize an auto deposit monthly to increase my savings. They rewarded me for learning how to save in their bank.
Perhaps this model can be adopted/modified by a partner willing to invest in BitShares users.
This is similar to the yield promotion. This got you to create an account and keep it with them for at least a year probably with >$1000.
Customers are fairly sticky & first year bonuses are very successful at creating long term account holders for a very low cost. In the UK it is/was controversial but very successful...
The Fair Banking Foundation reckons that 3.78 million savers over the past five years had money in accounts paying attractive short-term bonuses, but who failed to move their cash once the deal ended.
Hopefully we could keep ours going for many years during the growth phase and once it's fully tapered traditional banks will be well into negative territory and zero yield would actually be attractive especially once SmartCoins had greater utility and combined with all their other great features as well.
Topic: Thought Experiment (Read 7173 times)
