Author Topic: Smartcoins on an interest/dividend paying asset?  (Read 1320 times)

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Offline hoanghuynh

Smartcoins on an interest/dividend paying asset?
« on: January 20, 2018, 04:42:11 am »
Would it be possible (theoretically) to have a smartcoin based on(e.g its underlying asset is) an interest bearing asset? I ask because I'm quite interested in this force settlement thing - which is akin to a bank converting it's deposits to equity. If banks were equity funded, and we used smartcoins where the underlying asset are the shares in the bank we could have a very interesting banking model with no bank runs (because of this force settlement)! The capital requirements of today (e.g. 5% of your assets risk-weighted or some kind of VAR metric) would be replaced with a margin requirement.

Offline Gleepower

Re: Smartcoins on an interest/dividend paying asset?
« Reply #1 on: January 21, 2018, 05:45:06 pm »

Offline Gleepower

Re: Smartcoins on an interest/dividend paying asset?
« Reply #2 on: January 21, 2018, 05:51:20 pm »
If you had asset which tracked the dollar had as its underlying a share in a bank, then a borrower of this asset would get dividends from (collateral - feed_price * debt) units of the share and the smartcoin owner would get feed_price * number_owned units of the share.

One problem if you wanted to have bank deposits which pay interest would be to when you make the payments since if you make the payments every year, then the price of the smartcoin will rise closer to the dividend date, and drop instantly after the dividend is paid, which defeats the point of the smartcoin tracking the dollar.


Offline Customminer

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Offline biophil

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Re: Smartcoins on an interest/dividend paying asset?
« Reply #4 on: January 25, 2018, 08:00:43 pm »
If you had asset which tracked the dollar had as its underlying a share in a bank, then a borrower of this asset would get dividends from (collateral - feed_price * debt) units of the share and the smartcoin owner would get feed_price * number_owned units of the share.

One problem if you wanted to have bank deposits which pay interest would be to when you make the payments since if you make the payments every year, then the price of the smartcoin will rise closer to the dividend date, and drop instantly after the dividend is paid, which defeats the point of the smartcoin tracking the dollar.

One very simple way to hack this is already in operation with HERO, a smartcoin which tracks BitUSD +5% APR. Here's some information: http://docs.hero.global/en/master/

I wrote about some issues with it on Steem: https://goo.gl/nguw6E
« Last Edit: January 30, 2018, 06:10:18 pm by biophil »

Offline xeroc

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Re: Smartcoins on an interest/dividend paying asset?
« Reply #5 on: January 26, 2018, 07:16:55 am »
Here's some official stuff: http://docs.hero.global/en/master/

That's not "official" .. it's just a page that factually documents what's actually going on.
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Offline biophil

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Re: Smartcoins on an interest/dividend paying asset?
« Reply #6 on: January 30, 2018, 06:10:31 pm »
Here's some official stuff: http://docs.hero.global/en/master/

That's not "official" .. it's just a page that factually documents what's actually going on.

Fair enough, I edited it.