Author Topic: Forget Smartcoins, how about Dreamcoins?  (Read 25671 times)

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Offline Stan

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So let me get this straight:

-We create "Sumo" that has 1.05 the feed price of a basket of currencies
-Obviously there will be demand for this asset
-We need people to short it into existence, but the only reason to do that is to think that BTS will rise by greater than 5% per year vs the basket of currencies
-Since there is no reason to think bts will rise more than 10% each year since BTS isn't profitable and even BM has said increased network activity won't drive BTS market cap higher, no one will short it.
-We hope that a whale comes in and shorts a bunch of it?  Why would they do that?  Aside from the costs to enter the BTS ecosystem, they will be giving up 5% right off the bat.

Are we just hoping that speculators will see a whale investing in something and follow them?  Then we hope that enough people are coming into the system that the demand for BTS rises and outpaces the 5% premium on "sumo".  I have to be missing something because I can't see why anyone would ever short this product...

The theory is that if you start selling lots of dream coins you will need to buy lots of BTS to make them.  That will put buying pressure on the market which will cause the price to rise more than 5%.  Since you are leveraged 2x even a 5% gain would double your profits.  And the more coins you make the more the collateral in the earlier coins you made will be worth.

Thus the price of BTS becomes a more or less direct function of the demand for Dreamcoins.


Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline Stan

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I have to be missing something because I can't see why anyone would ever short this product...
That's what I've been saying. I ask: would the biggest proponents of this idea be willing to short it? Why would your short it instead of shorting BitUSD?

Because, spicy +5% hot dogs sell better than bland 0% hot dogs.
 
And once you have demand, you can make and sell more, which theoretically means that the appreciation of BTS would more than make up for the extra 5% it costs to make them.

...on the other hand, the effects could be limited to just this arm of the galaxy.

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Offline Chronos

I have to be missing something because I can't see why anyone would ever short this product...
That's what I've been saying. I ask: would the biggest proponents of this idea be willing to short it? Why would your short it instead of shorting BitUSD?

Offline lil_jay890

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So let me get this straight:

-We create "Sumo" that has 1.05 the feed price of a basket of currencies
-Obviously there will be demand for this asset
-We need people to short it into existence, but the only reason to do that is to think that BTS will rise by greater than 5% per year vs the basket of currencies
-Since there is no reason to think bts will rise more than 10% each year since BTS isn't profitable and even BM has said increased network activity won't drive BTS market cap higher, no one will short it.
-We hope that a whale comes in and shorts a bunch of it?  Why would they do that?  Aside from the costs to enter the BTS ecosystem, they will be giving up 5% right off the bat.

Are we just hoping that speculators will see a whale investing in something and follow them?  Then we hope that enough people are coming into the system that the demand for BTS rises and outpaces the 5% premium on "sumo".  I have to be missing something because I can't see why anyone would ever short this product... 

Offline okidoki

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I think there is almost a 100% chance that if Stan pitches this idea to enough whales, that eventually one will see this genious plan and wants to kick it off with his own money...

But it would be better to have the asset and feeds set up already, so that the whale could act directly and not having to wait a few weeks until this has been set up.

Offline bitsharesbrazil

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what I cannot stand is that bitshares is ready to be widely used in crypto space, the product is out there........we are going to create some new tech to delay our task to be used or we a going concentrate why we didnt went fullpower into altscene adoption...... its up to us to decide.
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Offline BunkerChainLabs-DataSecurityNode

I would think that in an environment where a whale was pouring capital into the system at an even modestly sustained rate there would be a WHOLE lot of piggybacking going on with other speculators riding the rising tide to introduce a Cambrean Explosion of products that diverse consumers would snap up.

That might get things in motion to where some sort of internal mechanism like you suggest could take over.  Essentially like a glider reaching an altitude where it doesn't need a whale tow plane any more.  From there on out an autopilot bot might ride the air currents indefinitely.

The bunker has a glider school right next to it.. I see them fly over head all the time and land right next to the bunker on the runway.. I am waiting for the day I find one crashed into the bunker.. hasn't happened yet.. my camera is on standby though.. regardless.. I never seen a glider go 'indefinitely' thats for sure... but it can go for a rather long time.. long enough to bootstrap other things perhaps.
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Offline fav

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again, just set it up and make an ANN what you need / goals. we'll see

Offline bitsharesbrazil

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take me in whatever way you guys choose regards to improve smartcoins, we have the system we need to make it happen.
bitcointalk ANN https://bitcointalk.org/index.php?topic=1084460.0
chat, post, promote it!!!!!!!! Stan help to improve OP!

Offline Stan

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I would think that in an environment where a whale was pouring capital into the system at an even modestly sustained rate there would be a WHOLE lot of piggybacking going on with other speculators riding the rising tide to introduce a Cambrean Explosion of products that diverse consumers would snap up.

That might get things in motion to where some sort of internal mechanism like you suggest could take over.  Essentially like a glider reaching an altitude where it doesn't need a whale tow plane any more.  From there on out an autopilot bot might ride the air currents indefinitely.
« Last Edit: June 22, 2016, 04:12:31 pm by Stan »
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Offline Empirical1.2

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Is there something about making it a basket that would make it more attractive to shorters/whales to create?
(Specific currencies that offered yield would be infinitely more popular than any sort of combo product imo.)


Other - BTS itself could also play the whale of sorts. If BTS was diluted at X% a year for SmartCoin yield. The yield would increase as BTS's value increased thereby incentivizing more and more SmartCoin demand. The yield could also dynamically adjust so that it would predominantly incentivize shorting in bear markets & vice versa based on trading above/below peg. (Yield harvesting in both scenarios would be positive as it removes BTS from CEX's, incentivizes shareholders to become familiar with the DEX & raises the SmartCoin CAP to potentially a market leader position which among other things would also make it the most lucrative for third parties to offer SmartCoin related products and services in and therefore most likely to bootstrap.)

If you want to take the island burn the boats

Offline Stan

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Your actual mileage may vary, but I'm looking for the right parameters and any other insights from this community's thinkers.  What breaks eventually?  When we run out of great-grandmas?

One problem might be that the whale would eventually wind up owning >51% of the supply, turning BTS into a privately controlled network.  The question is, would anybody care by that time?

I suppose that to keep the system going indefinitely a sufficiently benevolent whale might agree to a hard fork that created a way to make shares permanently non-voting.  Once she reached some %ownership she could continue to buy up non-voting BTS for the economic advantages without damaging the essential decentralized control characteristics...
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Offline EstefanTT

How much would a benevolent whale need to invest to make this happen? Does anyone have an idea?
With the current low volume, it wouldn't need a lot to move the price up and maintain it.

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Offline Louis

How much would a benevolent whale need to invest to make this happen? Does anyone have an idea?

Offline xeroc

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Given a stable demand for a coin of this type, would take a stable stream of BTS off the table, giving the upward draft in BTS price needed to become self-sustaining.
spot on!

With BTS becoming profitable and yielding a 5% on it's own .. this could be a safe bet for shorters!
All we need to do is get there!