Can we reduce the current supply of BTS somehow?

[liondani]

Personally I think the best way to offer a POS minting reward that removes BTS from current supply is by offering yield on SmartCoins.
https://bitsharestalk.org/index.php/topic,21597.msg286581.html#msg286581

It will also create demand for SmartCoins and because BitUSD is less volatile than crypto, the yield required to attract BitUSD demand is much lower.

 

[CLains]

This is an infinitely better solution than trying to limit dilution for workers. Let workers work, let investors invest, and let speculators speculate. Finding a "good enough" solution here would provide great value to everyone.

[tbone]

Personally I think the best way to offer a POS minting reward that removes BTS from current supply is by offering yield on SmartCoins.
https://bitsharestalk.org/index.php/topic,21597.msg286581.html#msg286581

It will also create demand for SmartCoins and because BitUSD is less volatile than crypto, the yield required to attract BitUSD demand is much lower.

Yeah, this would be probably good idea, but it might take some time until we reach a consensus about exact model and implement it. In the mean time I think we could still do something simpler that even the antidilution gang can understand and accept.

Isn't free market the best idea?

What do you mean?

Bitshares is a DAC, so it's like a company. Shareholders want to see the value of their investment to go up. We should consider all possibilities how this can be achieved, whether it is offering products and services to customers, incentivizing smartcoin liquidity or locking BTS away from markets.

Dash is a case that proves that it is possible to raise the price of core token by locking it away from liquid markets. Is there any good reason why we shouldn't do the same?

I mean focus more on products and less on the (price of) shares.

Just some random thoughts here.

It's risky to have shares be a part of products (like what we did).

Once we have side chains, it's best to use SIDE.BTC etc as default collateral of all smart coins, or create new smart coins, let market select the best ones. After then, dumping and pumping of shares (BTS) won't impact liquidity of products (smart coins), and perhaps no price feeding is needed at that time. A new era, BitShares 3.0.

The goal of a company is to increase shareholder value.  If you want to focus on products, then in our case you have to realize the only way to fund development is through dilution.  So that means increasing share price is critical, especially when a large segment of the community is woefully ignorant and only understands "anti-dilution". 

Your suggestion to use only SIDE.BTC (instead of BTS) as collateral for BitAssets is off base.  First, you assume BTC will be stable.  But in fact BTC will likely NOT be stable.  Also, if BTC would be stable, then price-stable cryptocurrency wouldn't be one of the big use cases for fiat BitAssets.  And finally, as @Empirical1.2 already pointed out, adoption of BitAssets will increase demand for the collateral.  Why would we want to transfer that demand from BTS to BTC?

[Samupaha]

I mean focus more on products and less on the (price of) shares.

As a company(-like entity) Bitshares DAC has one goal that all shareholders agree: to make profit for shareholders.

Because Bitshares doesn't pay dividend to shareholders, only way to make the investment profitable is to get shareprice to go up. This is something that we should never forget.

By locking some BTS we can achieve two things at the same time: shareholders will be happy when the BTS price goes up and we will have more funds (measured in fiat currencies) to develop and make Bitshares even better. It's much easier to focus on products when share price is high.

It's risky to have shares be a part of products (like what we did).

Once we have side chains, it's best to use SIDE.BTC etc as default collateral of all smart coins, or create new smart coins, let market select the best ones. After then, dumping and pumping of shares (BTS) won't impact liquidity of products (smart coins), and perhaps no price feeding is needed at that time. A new era, BitShares 3.0.

If you use SIDE.BTC as default collateral then the more popular SmartCoins becomes the more demand there is for BTC... So you're mostly growing BTC demand with that strategy not necessarily BTS unless you earn fees from their transactions. (Even in a ninety percent BTS price decline, BitAssets still retained their value so they're designed pretty well in terms of using BTS as collateral.)

I will add to this that because foundations of Bitcoin are very weak, there is high probability that it's price will drop significantly in the near future (that's one reason why I'm interested in Bitshares so much). If the price of an asset is going to drop, it's not good asset for collateral. There will be very small incentives to borrow smartcoins into existence with bitcoin.

[Empirical1.2]

Personally I think the best way to offer a POS minting reward that removes BTS from current supply is by offering yield on SmartCoins.
https://bitsharestalk.org/index.php/topic,21597.msg286581.html#msg286581

It will also create demand for SmartCoins and because BitUSD is less volatile than crypto, the yield required to attract BitUSD demand is much lower.

Yeah, this would be probably good idea, but it might take some time until we reach a consensus about exact model and implement it. In the mean time I think we could still do something simpler that even the antidilution gang can understand and accept.

Isn't free market the best idea?

What do you mean?

Bitshares is a DAC, so it's like a company. Shareholders want to see the value of their investment to go up. We should consider all possibilities how this can be achieved, whether it is offering products and services to customers, incentivizing smartcoin liquidity or locking BTS away from markets.

Dash is a case that proves that it is possible to raise the price of core token by locking it away from liquid markets. Is there any good reason why we shouldn't do the same?

I mean focus more on products and less on the (price of) shares.

Just some random thoughts here.

It's risky to have shares be a part of products (like what we did).

Once we have side chains, it's best to use SIDE.BTC etc as default collateral of all smart coins, or create new smart coins, let market select the best ones. After then, dumping and pumping of shares (BTS) won't impact liquidity of products (smart coins), and perhaps no price feeding is needed at that time. A new era, BitShares 3.0.

If you use SIDE.BTC as default collateral then the more popular SmartCoins becomes the more demand there is for BTC... So you're mostly growing BTC demand with that strategy not necessarily BTS unless you earn fees from their transactions. (Even in a ninety percent BTS price decline, BitAssets still retained their value so they're designed pretty well in terms of using BTS as collateral.)

The Yield Promotion is also fairly self funding, example...

If you buy 100 Z Shares we'll give you 5 free Z Shares per year as part of a temporary promotion.

20 people say yes please. This creates buying demand for 2000 Z Shares. But we will create 100 Z shares worth of sell pressure over the following year to fund their bonus.

Provided just one new person takes part in the following year, his 100 Z Shares of demand will offset the sell pressure of the bonus for those 20 people.

So in that example, until such time as new demand for that promotion is growing at less than 5% a year, the promotion is self funding.
At that point you curtail/close the promotion.

So assuming all else being equal, customers will choose the BitUSD with yield vs. one with no yield, you will become market leader and attract lots of self funding demand for BTS for many years to come with such a promotion. By then you will have bootstrapped SmartCoins and banks will probably be charging negative interest. So a private, no interest BitUSD will still be very attractive.

Studies show 80% of people hadn't moved their money for over 3 years since their teaser rate bonus ended anyway.
https://www.fca.org.uk/static/documents/market-studies/cash-savings-market-study-final-findings.pdf
 

[abit]

Personally I think the best way to offer a POS minting reward that removes BTS from current supply is by offering yield on SmartCoins.
https://bitsharestalk.org/index.php/topic,21597.msg286581.html#msg286581

It will also create demand for SmartCoins and because BitUSD is less volatile than crypto, the yield required to attract BitUSD demand is much lower.

Yeah, this would be probably good idea, but it might take some time until we reach a consensus about exact model and implement it. In the mean time I think we could still do something simpler that even the antidilution gang can understand and accept.

Isn't free market the best idea?

What do you mean?

Bitshares is a DAC, so it's like a company. Shareholders want to see the value of their investment to go up. We should consider all possibilities how this can be achieved, whether it is offering products and services to customers, incentivizing smartcoin liquidity or locking BTS away from markets.

Dash is a case that proves that it is possible to raise the price of core token by locking it away from liquid markets. Is there any good reason why we shouldn't do the same?

I mean focus more on products and less on the (price of) shares.

Just some random thoughts here.

It's risky to have shares be a part of products (like what we did).

Once we have side chains, it's best to use SIDE.BTC etc as default collateral of all smart coins, or create new smart coins, let market select the best ones. After then, dumping and pumping of shares (BTS) won't impact liquidity of products (smart coins), and perhaps no price feeding is needed at that time. A new era, BitShares 3.0.

[Samupaha]

Personally I think the best way to offer a POS minting reward that removes BTS from current supply is by offering yield on SmartCoins.
https://bitsharestalk.org/index.php/topic,21597.msg286581.html#msg286581

It will also create demand for SmartCoins and because BitUSD is less volatile than crypto, the yield required to attract BitUSD demand is much lower.

Yeah, this would be probably good idea, but it might take some time until we reach a consensus about exact model and implement it. In the mean time I think we could still do something simpler that even the antidilution gang can understand and accept.

Isn't free market the best idea?

What do you mean?

Bitshares is a DAC, so it's like a company. Shareholders want to see the value of their investment to go up. We should consider all possibilities how this can be achieved, whether it is offering products and services to customers, incentivizing smartcoin liquidity or locking BTS away from markets.

Dash is a case that proves that it is possible to raise the price of core token by locking it away from liquid markets. Is there any good reason why we shouldn't do the same?

[Empirical1.2]

Isn't free market the best idea?

If Smartcoin adoption is worth a lot too BTS shareholders then spending a little BTS to encourage that SmartCoin adoption is +EV. (Now that we have dilution.)

Banks for example will offer a first year teaser rate that isn't normally justified because of the value to the bank of that customer.

https://www.fca.org.uk/static/documents/market-studies/cash-savings-market-study-final-findings.pdf

(80% of customers don't switch accounts for up to three years after the yield promotion is over)

So a yield promotion is a great way to create a large customer base for a low cost. Those customers must also buy BTS first (For BitUSD) to receive a little yield over time. So unlike other initiatives where you spend BTS and hope to create BTS demand later, this creates BTS demand from the outset.

[abit]

Isn't free market the best idea?

[Empirical1.2]

It's more profitable for dash owners to lock it up and get rewarded rather than trade on exchanges: they get an interest for the collateral and dash price goes up because there is less to sell.

What would be the best way for Bitshares to implement something like this?

This is similar to part of what BM suggested, having up to 15% dilution for investors who lock up funds paid for by speculators.
http://bytemaster.github.io/article/2016/01/04/The-Benefits-of-Proof-of-Work/

Personally I think the best way to offer a POS minting reward that removes BTS from current supply is by offering yield on SmartCoins.
https://bitsharestalk.org/index.php/topic,21597.msg286581.html#msg286581

It will also create demand for SmartCoins and because BitUSD is less volatile than crypto, the yield required to attract BitUSD demand is much lower.
 

[Samupaha]

Recently there was a hangout with a guy from Dash. One really interesting concept was masternodes that Dash has. Especially the collateral that is demanded for masternode seemed to be very successful idea.

Every masternode has to have 1000 dash that they lock for so long as they are a masternode. This has been very helpful for dash price because it has sucked a lot of dash away from market liquidity.

It's more profitable for dash owners to lock it up and get rewarded rather than trade on exchanges: they get an interest for the collateral and dash price goes up because there is less to sell.

What would be the best way for Bitshares to implement something like this?

First and most obvious option is of course that we will have a worker that will pay interest for accounts that have locked a certain amount of BTS. And of course there will be the old antidilution argument... but in this case, the funds from reseve pool are not going to liquid markets, they are going to be locked away from markets.

Those funds are not increasing the current supply and they incentivize people to reduce current supply. That would be pure win for everyone. In addition that will incentivize people to move their BTS from exchanges to their own wallets. So the "antidilution" argument doesn't apply in this case.

Couple of questions:

- Should there be a minimum amount of BTS that is entitled to the interest? 1000 dash is approximately 1 000 000 BTS.

- How often interest is paid? Once a month? When funds are unlocked?

- How much is the interest?

- Is there some minimum time for locking? If user unlocks before that, they need to pay a fine, which is added to the interest pot and divided for those who keep their funds locked?

Another possibility is "savings club" that @Empirical1.2 suggested a while ago.

Users will deposit assets to an account where they sit for a year (or some other time). When year is over, they need perform "proof of life" to get their assets back. If they don't, they lose the assets and those are divided for other users as an interest. So it's like a mild form of gambling.

Originally Empirical proposed that this would be for BitUSD but I think it would work best with BTS. We want BitUSD to be liquid, so there is not much reason to lock it away from markets. Instead we want BTS to be locked away from current supply to make it more valuable.

This could be funded with fee backed assets so there is no need to use reserve pool funds.