Interest on BitUSD - A Proposal for Review

[James212]

Accuracy isn't actually important for marketing. If you want to be accurate then Bitcoin mining isn't really mining, it's minting. Because you don't mine coins from the ground do you?

Maybe accurate isn't the right word - I'm actually talking about marketing.

When I hear "rewards" I think of a marketing gimmick. When I hear "dividends" or "interest" I think of banking. The better marketing decision may be to not use a "marketing" word.

I own a marketing firm here in Ontario, I've spent my entire adult life as a marketer...

Go with whichever has the most "perceived value". For me, it's unquestionably "interest". I put my wealth into something that has a high interest rate. I choose a credit card that gives me "rewards". The underlying incentives are totally different for each. BitUSD early adopters will park their wealth for the interest, not rewards.

Ultimately we're discussing semantics / psychology. The words we choose to describe our product are very important. If we use the wrong ones, someone else will use the right ones.

 

[GaltReport]

FYI... I have already implemented the rewards program   at the blockchain level.  I just need to add a few wallet operations and do some testing on a test-net, but it should be ready to go next week.

Anybody else get the feeling BM is changing the world with every stroke of the keyboard?

Who would have thought, the G*d D**n kid built a "bank"!!

[James212]

1) What are your thoughts on putting the "daily burn" toward BitUSD? This way, there is more electoral control over the interest rate.

2) Does this apply to all BitAssets or just BitUSD specifically?

Wouldn't that create unbacked bitUSD?

No, since you could use the burned BTSX to purchase bitAssets on the open market. It would be pretty cool, no? You'd have constant buying pressure for bitAssets.

Sent from my SCH-S720C using Tapatalk 2

So said another way the burn rate isn't sending shares off into oblivion but being donated to the network to pay out as dividends/interest to bitUSD holders? That's pretty interesting. It could't be all of it though as the burn rate is the only mechanism to reduce supply.

There is not need to reduce supply to provide value if you can increase the demand side much more by offering interest. 

[James212]

1) What are your thoughts on putting the "daily burn" toward BitUSD? This way, there is more electoral control over the interest rate.

2) Does this apply to all BitAssets or just BitUSD specifically?

Wouldn't that create unbacked bitUSD?

No, since you could use the burned BTSX to purchase bitAssets on the open market. It would be pretty cool, no? You'd have constant buying pressure for bitAssets.

Sent from my SCH-S720C using Tapatalk 2

So said another way the burn rate isn't sending shares off into oblivion but being donated to the network to pay out as dividends/interest to bitUSD holders? That's pretty interesting. It could't be all of it though as the burn rate is the only mechanism to reduce supply.

Yeah, so burn some and convert others to bitAssets. Some of the burn is implicit dividends for BTSX holders, some is explicit dividends for bitAsset holders.

Sent from my SCH-S720C using Tapatalk 2

Why is extra deflation even necessary? Even without the burn, BTSX is deflationary by default. Investing 100% of the burned shares into interest bearing assets would be much more strategically beneficial to adoption and therefore BTSX holders.

PS: Love your tagline!

  Agreed.  This is just like when a company is in a fast growth industry, they usually do not pay dividends because they can create better (more) shareholder value by investing the profits in to the business.   If BitshareX can create more value by using the fees/earnings (that are burned) to pay for interest and attract people to the network, then that is what should be done. 

[James212]

I am think of calling them "USD Rewards" like a credit card "rewards program".

Definitely call it interest.
It's already been done in the crypto community https://mcxnow.com/ .
So it's already accepted as interest.

Is the term "Rewards" already decided? To me that sounds more like frequent flier miles than money. Does the word "Reward" have certain legal advantages over dividend or interest?

Rewards is terrible. If every other exchange is calling it interest why should Bitshares X be the one to call it rewards?  It's actually not unusual for people to get interest on their cryptocurrency deposits.

dividends might be more accurate since it is a distribution of profit (fees). I agree the "rewards" sounds like a marketing thing. Interest and dividends sounds like a finance thing.

Accuracy isn't actually important for marketing. If you want to be accurate then Bitcoin mining isn't really mining, it's minting. Because you don't mine coins from the ground do you?

We are speaking in metaphors. The metaphors don't have to be real world accurate they just have to get the point across in the most simple to the point way. All this legalese financial speak is just going to confuse people. Talk of rewards will make people think it's a video game with points.

 

[James212]

I am think of calling them "USD Rewards" like a credit card "rewards program".

Definitely call it interest.
It's already been done in the crypto community https://mcxnow.com/ .
So it's already accepted as interest.

Is the term "Rewards" already decided? To me that sounds more like frequent flier miles than money. Does the word "Reward" have certain legal advantages over dividend or interest?

Rewards is terrible. If every other exchange is calling it interest why should Bitshares X be the one to call it rewards?  It's actually not unusual for people to get interest on their cryptocurrency deposits.

 

[oldman]

SO THIS WHAT THE  IS ABOUT! I just got it. You guys were originally positioning the 5% to BTSX holders, not BitAsset holders.

Moving the 5% incentive to BitAsset holders is strategically much better. People who invest in crypto are growth investors, they don't care much about stability or 5% interest. Moving the 5% incentive to BitAsset holders attracts an entirely new demographic.

As demand for BitAssets grow, the value of BTSX will grow as well. It's a perfect win-win.

This is genius!

was ALWAYS for BitAsset holders... we just didn't quite know how to implement the rewards

don't call it rewards.

why not interestfees or shareinterest and short interest?

Drumroll..... bitInterest.

Not a legally defined term, fits with the ecosystem and communicates the intent with clarity.

"Investors earn 5% bitInterest on bitUSD holdings"

Edit: bitEarnings might also be highly marketable... bitIncome, bitDividends, etc.

Shentist already came up with that. 

you call it bitUSD and here is no problem?

then call it bit%  - bitinterest - btsinterest - bitUSD%

"If you hold bitUSD for a long time the collected fees from the market transaction will be paid back as an (insentive, reward, interest, dividend) to the bitUSD holders. This will slowly increase the holders bitUSD amount. The future will tell how much of gain you will get from holding bitUSD but we expect something between 2-5% every year".

Oops... right you are! 

Kudos to Shentist... this seems to be the ideal term.

Is there any reason it can't be used, legally or otherwise?

[Ggozzo]

SO THIS WHAT THE  IS ABOUT! I just got it. You guys were originally positioning the 5% to BTSX holders, not BitAsset holders.

Moving the 5% incentive to BitAsset holders is strategically much better. People who invest in crypto are growth investors, they don't care much about stability or 5% interest. Moving the 5% incentive to BitAsset holders attracts an entirely new demographic.

As demand for BitAssets grow, the value of BTSX will grow as well. It's a perfect win-win.

This is genius!

was ALWAYS for BitAsset holders... we just didn't quite know how to implement the rewards

don't call it rewards.

why not interestfees or shareinterest and short interest?

Drumroll..... bitInterest.

Not a legally defined term, fits with the ecosystem and communicates the intent with clarity.

"Investors earn 5% bitInterest on bitUSD holdings"

Edit: bitEarnings might also be highly marketable... bitIncome, bitDividends, etc.

Shentist already came up with that. 

you call it bitUSD and here is no problem?

then call it bit%  - bitinterest - btsinterest - bitUSD%

"If you hold bitUSD for a long time the collected fees from the market transaction will be paid back as an (insentive, reward, interest, dividend) to the bitUSD holders. This will slowly increase the holders bitUSD amount. The future will tell how much of gain you will get from holding bitUSD but we expect something between 2-5% every year".

[wesphily]

is this post why the ask side of bitusd dried up?

[James212]

I am think of calling them "USD Rewards" like a credit card "rewards program".

This makes me think gimmick and I don't think investors would take it seriously. My personal experience with reward programs is that are designed to entrap and extract.

'Interest' is universally understood and will require no explaining, a critical point when releasing a new product to a global audience.

The bitUSD5 concept will be met with heavy scepticism upon release, no one will believe it is not a scam/ponzi. Best not hand out ammo.

Of course, once there are a couple years of ROI on the books (proof of concept) the flow of wealth will be unstoppable.

 

[James212]

There is no need to represent a fixed interest rate.

This will be interpreted more as deposit interest and folks are accustomed to banks changing the rate frequently.

Per my last, all that is needed is to market the interest as 'receive up to  5% interest on bitUSD holdings' and then show a graph of historical interest rates.

Who among us wouldn't buy bitUSD with that kind of offer?

Imagine merchants being able to earn interest on their float... imaging APPL being able to get 5% on their cash pile.

I hate the phrase 'up to' personally, I hope it works and I am the odd man out.

1) What are your thoughts on putting the "daily burn" toward BitUSD? This way, there is more electoral control over the interest rate.

2) Does this apply to all BitAssets or just BitUSD specifically?

I think it should apply to all bitCurrencies. As for bitGold/bitSilver, my first reaction is -'NO'.

 

[James212]

Just so we're clear: This is not interest it is a dividend. The holders of bitUSD are participating in a revenue sharing plan. Also, paying out half the revenue as a dividend and retaining the other half as the insurance fund sounds good. The theory that people will look at their dividends as insurance if something bad happens I don't think will fly. The dividend is earned revenue and they'll be upset if they find one day that it needs to be used to bail out the market.


Other than those points I LOVE this idea. It makes a truly compelling case to hold bitUSD.

It has a lot of the elements of a dividend, I agree. I am thinking how to represent it to the people. 'The interest is not truly fixed, but for the last mo/3 mo/ etc it was X%' I do not know, do not like that way too much neither.

There is no need to represent a fixed interest rate.

This will be interpreted more as deposit interest and folks are accustomed to banks changing the rate frequently.

Per my last, all that is needed is to market the interest as 'receive up to 5% interest on bitUSD holdings' and then show a graph of historical interest rates.

Who among us wouldn't buy bitUSD with that kind of offer?

Imagine merchants being able to earn interest on their float... imaging APPL being able to get 5% on their cash pile.

I'm more for the 10% that Bytemaster mentioned.  It helps better to attached USD given that the network is still unproven and may have unknown risks

[oldman]

SO THIS WHAT THE  IS ABOUT! I just got it. You guys were originally positioning the 5% to BTSX holders, not BitAsset holders.

Moving the 5% incentive to BitAsset holders is strategically much better. People who invest in crypto are growth investors, they don't care much about stability or 5% interest. Moving the 5% incentive to BitAsset holders attracts an entirely new demographic.

As demand for BitAssets grow, the value of BTSX will grow as well. It's a perfect win-win.

This is genius!

was ALWAYS for BitAsset holders... we just didn't quite know how to implement the rewards

don't call it rewards.

why not interestfees or shareinterest and short interest?

Drumroll..... bitInterest.

Not a legally defined term, fits with the ecosystem and communicates the intent with clarity.

"Investors earn 5% bitInterest on bitUSD holdings"

Edit: bitEarnings might also be highly marketable... bitIncome, bitDividends, etc.

[Shentist]

earnings would also be better

[Method-X]

SO THIS WHAT THE  IS ABOUT! I just got it. You guys were originally positioning the 5% to BTSX holders, not BitAsset holders.

Moving the 5% incentive to BitAsset holders is strategically much better. People who invest in crypto are growth investors, they don't care much about stability or 5% interest. Moving the 5% incentive to BitAsset holders attracts an entirely new demographic.

As demand for BitAssets grow, the value of BTSX will grow as well. It's a perfect win-win.

This is genius!

was ALWAYS for BitAsset holders... we just didn't quite know how to implement the rewards

don't call it rewards.

why not interestfees or shareinterest and short interest?

Just stick with  "", the interest part is implied.

Problem solved.