Forget Smartcoins, how about Dreamcoins?

[xeroc]

just do it, we can talk later

On a permission-less ledger like BitShares, we don't need to talk at all

There is one general issue I am having when people promise a +5%apr. Not that is sounds fishy and people are going to think its a pyramid scheme - that doesn't need to be the case after all.
The problems I am having result in the 'exponential' behavior of a promise. The value (depending on how you define value) rises by 5% per year gives an equation of 1.05^time which is clearly linear and, as exponentials do, 'escalates quickly'.
There needs to be a very good reasons to think that
a) there is enough backing for that claim
b) the backing is used to buy BTS so that it grows > 5% per year. Otherwise shorters lose out.

Assuming there was a big company that does this and keeps these promises, then shorting would be a
no-brainer for everyone that has BTS, because "the other company is making it happend for you" and takes
care of the 5%+ increase in BTS value each year. They may very well be willing to do so because of the
advantages that come with BTS and bitDREAM:
* permission-less ledger
* ultra-fast
* scalable
* collateralized stable tokens
* global order books
* 24/7 trading

If some company that has the money to do this AND is trusted to keep the promises, then BTS will go through the roof (not an investment advise!)

[mike623317]

I love this idea.

[fav]

just do it, we can talk later

[ebit]

Raise Smartcoin settle cost ,protect the shorter.Then more people will create it.
If OPEC choice Sumo,I choice too.

[Chronos]

BitUSD and "Sumo" serve the same stable-coin market, but shorters would prefer to short the weaker asset, USD, which means more USD would exist. And we have only anemic quantity of USD in existence, about 112000 tokens, so I would expect Sumo to cannibalize it and have fewer tokens in existence.

In short (haha pun), shorters wouldn't create it, so it would be a non-starter. They would prefer to short a fiat peg instead, which is what we actually need to get liquidity juiced up.

Disclaimer: I could be wrong.

[Stan]

Nice thought experiment, but I think the original model, were shorters paid interest to longs in bitUSD or bitEUR was much better. This should be reintroduced in my opinion... as an alternative at least to the current interest-free bitUSD... perhaps the bondmarket as well.

I understand the logic behind this... but people would not like to see such experiments and they might not understand it, as the whole project is already called an experiment...

Certainly it would not be called an experiment by the time it was presented to the General Public.

At that point, it would all be boiled down to a menu of smart coins with various defined behaviors.
The average consumer would be presented with a simple list of coins they could buy:

bitUSD tracks the value of the US dollar.
bitGold tracks the spot price of gold.
bitSumo appreciates against a basket of currencies by 5%.

You buy these coins like you buy any CD and hold them as investments.
They each can be explained in about as much text as a product on Amazon.



They could certainly be explained as a 5% CD.  The only difference is the black swan protection against any single currency suddenly collapsing - a real probable scenario in the next few years.

I'm not sure there is any difference between what we are saying other than how it is explained.  My proposal is simply implemented by publishing the price feed formula as a function of other price feeds. 

How is what you are saying different and why would it be better?

[okidoki]

Nice thought experiment, but I think the original model, were shorters paid interest to longs in bitUSD or bitEUR was much better. This should be reintroduced in my opinion... as an alternative at least to the current interest-free bitUSD... perhaps the bondmarket as well.

I understand the logic behind this... but people would not like to see such experiments and they might not understand it, as the whole project is already called an experiment...

[Stan]

Who would use a currency that functions like an inflation proof certificate of deposit guaranteed to appreciate against the best of the world currencies by ?

Um, all the money currently deposited in retirement accounts or passbook savings accounts earning near zero or negative interest.

Naturally, in the current doldrums where BTS is not reliably appreciating nothing much is happening.

But suppose, as the stated thought experiment, that some whacko rocket scientist were to allocate a million dollars to generate liquidity for the, um, Whacko which is a MPA with a definition equation representing the ideal dreamcoin. 

Would there be a market for the dreamcoin?
Would that release of a megabuck worth of the Whacko onto the market take enough BTS out of circulation to start a virtuous upward price spiral that becomes self-sustaining?

Would such growth justify shorting into that demand where the speculator gives up 5% of the annual appreciation such a coin might stimulate?

[Chronos]

Why not make it? Because nobody would short it.   

[ebit]

Let me have a look ,does it solve any problem?increase trading volume?who will use it?

[Stan]

There is nothing that says that a MPA price feed has to be attached to a real currency or commodity is there?

What would happen if we postulated a fictional currency with a desirable price feed behavior defined by well specified equation as a function of time instead of pegging it 1:1 to some market feed?  Why not peg it to grow 1.05 to 1 annually and offset the reference currency's historic inflation rate or something?

Thought experiment:

Define an imaginary "Sumo" to have a value equal to the perhaps weighted Sum (USD, CNY, EUR) + 5% per year.  Now its price feed relative to that basket is defined in advance for as far into the future as the reference currencies exist.  Or perhaps the "Maxo" is defined as the price feed of the strongest SDR currency at any given time .

We could create a "bitSumo" or "bitMaxo" that would behave like that fictitious "dreamcoin" currency and, viola, now we have a currency that will always outperform a specified basket or the best fiat currency by 5%.

Just dial the equation into Xeroc's bot to keep your favorite artificial currency collateral topped off to its completely predictable performance relative to the price feeds of it's poor, hapless, fiatic competitors.

Why track poorly behaving fiats and commodities when you can dream up you own ideal coin behavior?