Lets bring " earn x% interest on 'anything' " back to Bitshares!

[virtualgrowth]

The idea of an asset with profit sharing built into the asset for holders sounds great.  Kind of like how banks offer a %.  But profit sharing is much better and if properly structured to keep growth in line without costing any part of bitshares too much will provide overall growth.

May be best if the profit percentage shared was ultimately a part of the profit earned from the trading fees from the trading of these "profit sharing assets".  This was the profit loop / cycle is kept in check and won't come out of balance.

Look forward to more in this community and the great ideas and possibilities that (may) exist!

[fav]

By the way, we really should not contemplate reducing the network's current 20% share of the fees.  That would be inflationary, which would decrease demand for BTS.  It would also make it more difficult to fund worker proposals.  If anything, we should increase the network's share, which would be deflationary and would also make it easier to fund worker proposals.  Both factors would help increase demand for BTS and help compound the effect of offering interest by contributing even more to the virtuous circle.

agree, just take 20% of referral income. that way registrars could still maintain 20%, marketers could get 20% and 20% interest

[tbone]

By the way, we really should not contemplate reducing the network's current 20% share of the fees.  That would be inflationary, which would decrease demand for BTS.  It would also make it more difficult to fund worker proposals.  If anything, we should increase the network's share, which would be deflationary and would also make it easier to fund worker proposals.  Both factors would help increase demand for BTS and help compound the effect of offering interest by contributing even more to the virtuous circle.

[tbone]

@Customminer -- I'm not sure over what period time those fees were accumulated.  But it can't possibly be since inception of BTS 2.0.  I don't even think that pool includes all fees currently being collected.  I mean, where is BTS on that list?  The overwhelming majority of fees are collected in BTS, not those other assets, right?  So we need some clarification as to what that pool is, exactly. 

But in the meantime, looking at the top 20 "most fees paid" list on cryptofresh, it appears we've generated at least ~17M BTS in fees since BTS 2.0 launched.  That's about 1M BTS per month.  Actually, it's more since this is only the top 20 accounts in terms of fees paid.  So I think it's pretty close to my guess of 1.2M BTS monthly.  Not to mention, the current monthly rate of fee collection should be higher than the monthly average over the last 18 months considering the substantial growth in transactions we've been experiencing.  On the other hand, a lot of the fees listed below may be from creating assets and therefore more "one-time" in nature (or at least more irregular). 

Anyway, this is just a bunch of guess work.  We need to know the actual rate of monthly fee collection.  But if my guess is even close, then this idea of redirecting a portion of referral rewards could fund substantial bitAsset demand without having to increase fees.  Even if I'm off by an order of magnitude, then this could still be worth pursuing considering, as @fav mentioned, it could kick off a virtuous cycle that could end up being substantial.

[fav]

I love the idea of being able to offer an interest rate of return on bitAssets.  OP's idea of redirecting some of the referral program's share of fees is an interesting way to accomplish it without reducing deflation (i.e. increasing inflation).  The question is how much of the desired effect will be realized if we reduce the referral program's share of fees from 80% to 60%?  To know that, we really need to know how much we're currently collecting in fees.

Looking at the cryptofresh reserve budget page (http://cryptofresh.com/reserve) , the following chart is shown:


Is this accurate? Are these stats since the launch of BTS 2.0 or are they representative of a few months?

where do the 20% for LTM upgrades go to? that number is missing for sure.

[R]

I love the idea of being able to offer an interest rate of return on bitAssets.  OP's idea of redirecting some of the referral program's share of fees is an interesting way to accomplish it without reducing deflation (i.e. increasing inflation).  The question is how much of the desired effect will be realized if we reduce the referral program's share of fees from 80% to 60%?  To know that, we really need to know how much we're currently collecting in fees.

Looking at the cryptofresh reserve budget page (http://cryptofresh.com/reserve) , the following chart is shown:


Is this accurate? Are these stats since the launch of BTS 2.0 or are they representative of a few months?

Regardless, assuming the 27,416 BTS represents 20%, 100% should be 137,080.

These stats may be discouraging at the moment, but BTS is beginning to build up traction and we're seeing new TX/day records. The more popular BTS gets the higher the sum of collected fees will be & the more effective the 'x% on anything' will be.

Do we have additional sources for these statistics? Would anyone be able to dump the stats directly from the CLI?

Side note - cryptofresh states "Accumulated assets may be transfered, traded, or held, at the committee's discretion. They are not part of the Reserve Pool balance.", this means that the 'Bitshares cash flow' infographic is incorrect.

But let's just say for argument's sake we're currently collecting $10,000 (or ~1.2M BTS) in fees per month.  20% of that (redirected from the referral program) would be $2,000 per month or $24,000 per year.  That would support 1% annual percentage rate on $2,400,000 worth of bitAssets.  Or 2% APR on $1,200,000.  Or 4% APR on $600,000.

How about:
10% -> 'Reserve pool'
50% -> 'x% on anything'
40% -> Referral system

The referral system is great, but I don't view it as better than having a strong 'x% interest on anything' feature, plus it only goes to a small quantity of community members as opposed to all asset holders.

Each of those potential outcomes would represent a substantial increase in bitAsset demand.  But the numbers are based on a guesstimated 1.2M BTS per month in fees.  Is that even close to reality?  If so, we could be onto something here.  In which case the next question would be how to implement this.  It sounds like we would need the dividend feature.

Your estimated fees, according to cryptofresh, are nowhere near the current estimates. We need additional sources of information to confirm this is the case.

The Peerplays dividend feature is fully open source & uses the MIT license: https://github.com/BunkerChainLabsInc/peerplays-profitshare/blob/master/LICENSE.md

I'd vote for a worker proposal for implementing this.

[fav]

I love the idea of being able to offer an interest rate of return on bitAssets.  OP's idea of redirecting some of the referral program's share of fees is an interesting way to accomplish it without reducing deflation (i.e. increasing inflation).  The question is how much of the desired effect will be realized if we reduce the referral program's share of fees from 80% to 60%?  To know that, we really need to know how much we're currently collecting in fees. 

But let's just say for argument's sake we're currently collecting $10,000 (or ~1.2M BTS) in fees per month.  20% of that (redirected from the referral program) would be $2,000 per month or $24,000 per year.  That would support 1% annual percentage rate on $2,400,000 worth of bitAssets.  Or 2% APR on $1,200,000.  Or 4% APR on $600,000.   

Each of those potential outcomes would represent a substantial increase in bitAsset demand.  But the numbers are based on a guesstimated 1.2M BTS per month in fees.  Is that even close to reality?  If so, we could be onto something here.  In which case the next question would be how to implement this.  It sounds like we would need the dividend feature.

even if it's not that much YET. if you get interest it drives more users to bitshares, more users = more fees = more dividends. It'll create a positive circle, and can only get better if we get more features, in my opinion.

[tbone]

I love the idea of being able to offer an interest rate of return on bitAssets.  OP's idea of redirecting some of the referral program's share of fees is an interesting way to accomplish it without reducing deflation (i.e. increasing inflation).  The question is how much of the desired effect will be realized if we reduce the referral program's share of fees from 80% to 60%?  To know that, we really need to know how much we're currently collecting in fees. 

But let's just say for argument's sake we're currently collecting $10,000 (or ~1.2M BTS) in fees per month.  20% of that (redirected from the referral program) would be $2,000 per month or $24,000 per year.  That would support 1% annual percentage rate on $2,400,000 worth of bitAssets.  Or 2% APR on $1,200,000.  Or 4% APR on $600,000.   

Each of those potential outcomes would represent a substantial increase in bitAsset demand.  But the numbers are based on a guesstimated 1.2M BTS per month in fees.  Is that even close to reality?  If so, we could be onto something here.  In which case the next question would be how to implement this.  It sounds like we would need the dividend feature. 

[R]

I'm in favor of a Dividend method.

Seconded. It'd be great if there was an automated & scheduled dividend mechanism for MPA assets.

If we implemented dividends for MPA then also providing the functionality (by default disabled) to UIA would be great, not just redistribution of fees but the issuance of additional UIA as a form of interest (only plausible for UIA, not MPA/EBA as they require real backing value).

[fav]

I'm in favor of a Dividend method.

I like the idea of dividends compared to OBITS buyback, but as far as I remember there was an voting in OBITS and idea of buyback was the winner.

yeah, but this is not about obits.

[valtr]

I'm in favor of a Dividend method.

I like the idea of dividends compared to OBITS buyback, but as far as I remember there was an voting in OBITS and idea of buyback was the winner.

[nmywn]

You can borrow (0%) and make profit yourself. Be your own bank, truly.

[fav]

I'm in favor of a Dividend method.

[沂蒙小调]

 

[R]

Yo,

One of the major selling points of BTSX for me back in 2014 was the 5% (or x%) on 'anything' marketing (that and sharedrop theory). The idea that I could store MPAs/UIA in effectively my own bank and get better interest rates than that FIAT banks were offering was a powerful message that had me (and a lot of other users) sold.

I realise that in the migration from BTSX (BTS 0.x) to BTS 2.0 we removed 'socialized yield', however I believe that the removal of profit sharing though asset fee yields was a mistake.

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

The following quotes are from the above link.

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 and undermining goal of encouraging people to buy and hold BitUSD. The yield was funded from transaction fees and by interest paid by shorts.

The funding of yield through fees was successful despite the fluctuating rates (1 - 5% APR AVG).

The issue was that users were able to 'yield harvest' by shorting to an alt account, effectively cheating the system.

An alternative distribution mechanism to paying interest by shorting is required.

Peerplays has the ability to distribute 'dividends' to users that hold the peerplays tokens, we should be doing something similar for tokens on the BTS DEX. Hopefully peerplays dividend/profit-sharing code is somewhat compatible with Bitshares (it's using graphene after all).

Relevant peerplays docs:
http://www.peerplays.com/news/how-does-the-profit-sharing-function-work/
https://peerplays.com/docs/Peerplays_Whitepaper.pdf

As we stated previously, undercharging for transactions is bad for business and BitShares was effectively earning nothing for all transactions of BitUSD because 100% of the income generated from fees was paid out to BitUSD holders as yield and nothing was left over to cover network expenses.

We now gather 20% of fees into the reserve pool (which also contains over 1 Billion BTS), which goes towards workers and witnesses.

80% of fees go towards the referral system.

I would propose that we re-evaluate the distribution of fees between the reserve pool, referral system and asset holders. We could burn through a chunk of the reserve pool, but this would be temporary as we would eventually need to reintroduce such fees to build the reserve pool back up. I think it's most fair to take a chunk of the fees from the referral system.

Infographic showing current BTS cashflow:
https://i.imgur.com/uLxEMat.png

While Socialized Yield is broken, BitShares 2.0 offers a far better alternative: Collateralized Bonds. Collateralized Bonds enable arbitrary shorting between any two assets, guaranteed interest, and no risk of being force settled. This system privatizes the yield to individual bonds and the terms and leverage available can be far more flexible. In effect, BitUSD becomes cash and a Bond becomes a Certificate of Deposit.

The concept of "Collateralized Bonds" did not make it into Bitshares 2.0, so in effect we cut asset holders out of fee redistribution without providing a replacement source of income for holding assets on the Bitshares DEX. I believe this may be a reason why we had a downtrend when switching from 0.x to 2.0 (disregarding merge drama).

Does anyone have any further information on this collateralized bond market? I could only find the following:

https://bitsharestalk.org/index.php?topic=16752.0
https://bitshares.org/technology/collateralized-bond-market/

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Edit:
Recent related threads:
"New Bitshares Dividend Idea" https://bitsharestalk.org/index.php/topic,23706.0.html
"Dividend feature" https://bitsharestalk.org/index.php/topic,21476.msg279498.html#msg279498
"Incentivize SmartCoin collateralization" https://bitsharestalk.org/index.php/topic,23707.0.html

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What do you think? 

Best regards,
CM.

Content replicated: https://steemit.com/bitshares/@cm-steem/lets-bring-earn-x-interest-on-anything-back-to-bitshares
Useful info: http://cryptofresh.com/reserve