The Hero from BitShares Island

[yvv]

I don't think it's likely that HERO will pay effective returns of 5%. If you look very closely, HERO can only offer a maximum of 5% return; if it consistently trades above the price feed, it will offer lower returns. Sadly, if it trades above the price feed, it isn't 100% backed by BTS in collateral, which destroys one of its main value propositions.

Stan is talking like this thing is a free lunch (cue him telling me that he's not; judge for yourself), but it's rarely that simple. I don't frequent this forum much any more, but I've been posting about HERO over on Steemit:

https://steemit.com/bitshares/@biophil/will-hero-work-or-can-you-brute-force-the-free-market
https://steemit.com/bitshares/@biophil/who-will-pay-the-interest-on-hero

Here is an example when a person got completely confused by "5% return" claim. There is not 5% return, 1 HERO will always stay 1 HERO. 5% is a rate of increase of underlying peg index relative to USD.

[biophil]

I don't think it's likely that HERO will pay effective returns of 5%. If you look very closely, HERO can only offer a maximum of 5% return; if it consistently trades above the price feed, it will offer lower returns. Sadly, if it trades above the price feed, it isn't 100% backed by BTS in collateral, which destroys one of its main value propositions.

Stan is talking like this thing is a free lunch (cue him telling me that he's not; judge for yourself), but it's rarely that simple. I don't frequent this forum much any more, but I've been posting about HERO over on Steemit:

https://steemit.com/bitshares/@biophil/will-hero-work-or-can-you-brute-force-the-free-market
https://steemit.com/bitshares/@biophil/who-will-pay-the-interest-on-hero

[Permie]

Stan invoking Jesus Christ to incite FOMO...

Pretty extreme even by Stan's standards

Actually, no.  That was my mini sermon for the day. 
50% of my posts on Steemit over the past year are on that far more important topic, not BitShares. 

Very interesting posts they are too.
 

[Stan]

Saying that HERO pays interest is misleading, because it does not. If you have 1 HERO now, you'll have the same 1 HERO next year and next year and so on... It's buying power relative to USD is going to increase, because shorters are forced to pay more USD when you settle it. This is different from paying interest.

Correct.  Xeroc explains this in his Hero wiki.

[yvv]

Saying that HERO pays interest is misleading, because it does not. If you have 1 HERO now, you'll have the same 1 HERO next year and next year and so on... It's buying power relative to USD is going to increase, because shorters are forced to pay more USD when you settle it. This is different from paying interest.

[Stan]

Stan invoking Jesus Christ to incite FOMO...

Pretty extreme even by Stan's standards

Actually, no.  That was my mini sermon for the day. 
50% of my posts on Steemit over the past year are on that far more important topic, not BitShares. 

[lil_jay890]

Stan invoking Jesus Christ to incite FOMO...

Pretty extreme even by Stan's standards

[Stan]

The annual 5% comes from the shorters. Check out http://docs.hero.global/en/master/ for more details.

Thanks Robrigo

I would have hoped to see this kind of shareholder-relevant information linked to in the OP, Stan.
I guess intrigue and suspense is what you're going for, but isn't the whole point of that to increase the speculative value of BitShares to new investors?

Easy-access quick-to-digest information helps reduce the information asymmetry between the BTS in-crowd and the wider potential investor audience.

I suppose if you do in fact only wish to inform the in-crowd, those who will bother to investigate further on their own, then it makes sense.
Not necessarily bad.

I get the impression that you, Stan, want to see BTS rise in value based lots of customers using BitShares' products. Lots of BTS to be locked up in collateral in SmartCoins.
As opposed to Speculative investment.

Why not both?

The Wiki didn't exist at the time of the first article.
It will of course be featured in future articles.

As far as who gets first access to knowledge, think of it as a form of information share drop - I'm publishing it in forums frequented by our most loyal die-hard supporters first and they can disseminate it outward to the world from there.

I'm really just following the example of Jesus Chist who provided plenty of proof for those who wanted to believe and yet left lots of room for those who didn't want to believe to walk away.

But don't worry, by the end of this month everyone will have heard about it.

Those who acted on this information when it first went public have already received the moral equivalent of a 1000% share drop.   

That's the way it should be.

 

 

[Stan]

Could somebody clarify how HERO actually works?

If HERO will be worth 5% more next year than what it is today, where does this 5% of wealth come from?

Cheers

Best explanation is a Xeroc's wiki: hero.global.
http://docs.hero.global/en/master/peg.html

An excerpt:

Who pays the interest?

The shorters do! Those that are willing to lock BTS away as collateral for the HERO need to ensure that the value of their collateral grows by more than 5% every year. Since the minimum collateral ratio is 200%, most shorters speculate on the value of BTS to grow by at least 2.5% after a year which would covers their obligation to top up the collateral sufficiently.

Of course, the BTS token will still be volatile! Basically, by shorting HERO with 200% collateral and issuing a new token with face-value (together with margin calls and settlements) establishes a system in equilibrium.

One the one side, there is 200% of the volatility, while on the other side, there is none. This is the general concept behind market-pegged assets, or smartcoins. Those on the short side experience the volatility and epxect the collateral to rise in price, while those on the long side enjoy the stability of their token.

The HERO does the same, except that it forces the shorters to also hand over a fixed interest per year to the long side of the trades. Independent of the shorters making profit at all, they will need to provide the interest to the long position.

Thus, the HERO represents a Peer-2-peer free currency where shorts and longs are provided by individual traders across the planet with no central entity having control over the issuance process.

[Permie]

The annual 5% comes from the shorters. Check out http://docs.hero.global/en/master/ for more details.

Thanks Robrigo

I would have hoped to see this kind of shareholder-relevant information linked to in the OP, Stan.
I guess intrigue and suspense is what you're going for, but isn't the whole point of that to increase the speculative value of BitShares to new investors?

Easy-access quick-to-digest information helps reduce the information asymmetry between the BTS in-crowd and the wider potential investor audience.

I suppose if you do in fact only wish to inform the in-crowd, those who will bother to investigate further on their own, then it makes sense.
Not necessarily bad.

I get the impression that you, Stan, want to see BTS rise in value based lots of customers using BitShares' products. Lots of BTS to be locked up in collateral in SmartCoins.
As opposed to Speculative investment.

Why not both?

[robrigo]

The annual 5% comes from the shorters. Check out http://docs.hero.global/en/master/ for more details.

[Permie]

Could somebody clarify how HERO actually works?

If HERO will be worth 5% more next year than what it is today, where does this 5% of wealth come from?

Cheers

[Stan]

We are ready to participate and can start producing feeds for the HERO from our witness node blckchnd as soon as the list of feed producers is updated.

Super!
Love seeing have its intended meaning again!

[fav]

We are ready to participate and can start producing feeds for the HERO from our witness node blckchnd as soon as the list of feed producers is updated.

[blockchained]

We are ready to participate and can start producing feeds for the HERO from our witness node blckchnd as soon as the list of feed producers is updated.