Author Topic: Marketing Fund to Subsidize BitUSD / BitBTC yield?  (Read 6302 times)

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Offline CLains

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We are already designing and building such a referral network.

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Offline Method-X

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    I would highly recommend taking a look at my proposal for a referral program. If you want BitUSD to spread virally, this is what needs to be done.

    Advertising > Users > Share value

    Advertising brings users which ultimately determines share value.

    I agree this is a good idea. Just need to make sure it pays for results like trading activity  and can't be easily gamed.   I think gaming sites give referrers a cut of their profits (profit sharing).  Residual income is a very powerful incentive vs one-time fees.

    I'm glad some people are starting to see the value in this idea. :)

    • Commissions would only be paid for referrals that generate income for the DAC (i.e. sales, fees, etc).
    • Most every online business offers a referral program.
    • There is no core difference between a traditional referral program (Amazon, Commission Junction, etc) and a DAC based referral program.
    • Tracking for a DAC based referral program would be more primitive than web based tracking (cookies vs. referral codes).
    [/list]
    « Last Edit: October 02, 2014, 01:37:35 am by MeTHoDx »

    Offline GaltReport

    I would highly recommend taking a look at my proposal for a referral program. If you want BitUSD to spread virally, this is what needs to be done.

    Advertising > Users > Share value

    Advertising brings users which ultimately determines share value.

    I agree this is a good idea. Just need to make sure it pays for results like trading activity  and can't be easily gamed.   I think gaming sites give referrers a cut of their profits (profit sharing).  Residual income is a very powerful incentive vs one-time fees.

    Offline Method-X

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    I would highly recommend taking a look at my proposal for a referral program. If you want BitUSD to spread virally, this is what needs to be done.

    Advertising > Users > Share value

    Advertising brings users which ultimately determines share value.

    Offline Empirical1.1

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    Idea - The 5% inactivity fee

    While I'm not a big fan of it, it may be needed for unclaimed stake and to incentivise voting and was part of the original BTSX design so it could be directed by BTSX shareholders for the best interest of BTSX.

    If you run some numbers on how much BTSX that could be and what BTSX could be worth July 20th next year, you get some pretty sexy amounts, maybe $5 million at least.

    My thinking says that if BTSX did decide to have a 5% inactivity fee, they may decide it's in the interest of BTSX holders if it went to incentivising BitAsset demand and they may decide it would be in their interest to use it to kickstart and bootstrap that BitAsset demand. (Obviously it should not be used in isolation or as a substitute for the other important points listed in this thread and should only start when we're close to getting other things in place necessary for bootstrapping BitAssets.)

    What if the inactivity fee was distributed to people who held BitAssets in the preceding year? Or if you really wanted to be sexy over a 100 day period starting soon.

    Every day you held 1 BitUSD you got 1 point and on July 20th next year the 5% inactivity fee could be distributed to points holders?

    I'm not great at maths, anyone have any idea how much demand that could stimulate? Other thoughts?









    Offline luckybit

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    Do you mean that AGS funds would be used to guarantee a min. yield?

    How about if it works like this: DACYieldFund / UniversalYieldFund

    You're a user and participant in Bitshares X. There is a BitsharesXYieldFund and a UniversalYieldFund.

    1) Anyone who donates to the BitsharesXYieldFund would do so voluntarily. There could be perks or reputation consequences for donating to the BitsharesXYieldFund. So suppose you donate $1000 in BitAssets to the BitsharesXYield fund? The fund would hold these BitAssets and when the price goes up the BitsharesXYield would be distributed to BitUSD holders.

    2) Assume someone donates to the UniversalYieldFund? This fund would exist as a network of DACs that contribute to this shared Yield fund. This could have all kinds of interesting effects and it could connect economically the DACs in the Bitshares ecosystem.

    So Bitshares Music, Bitshares Play, Bitshares X, could all be inter-connected through the UniversalYieldFund. Each DAC would contribute something as it is profitable to this fund and then when one of the DACs isn't profitable the fund would increase the Yield for a BitAsset in that DAC.

    Do you think any of these ideas could work? Bitshares X does has atomic cross chain transactions. It can technically implement this idea and it could have either a load balance effect or an effect where every DAC in the network assists other DACs. Sort of like a mutual aid society for DACs making it into more of a Bitshares family.

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    Offline luckybit

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    I have been thinking that a good way to bootstrap interest in BitUSD is to have the yield subsidized.   A kind of promotion to encourage people to try it out.   

    We also need an honest way to account for "projected yield" but I don't know how to do that because there are too many variables:

    1) trade volume could increase generating increased fees and higher yield
    2) USD supply could increase decreasing average yield
    3) USD supply could decrease increasing average yield
    4) an unknown percent of USD never claims yield (turn over, short holding period)

    Without knowing all of these things it is impossible to predict exactly the yield in BitUSD..

    How about you give users a way to directly donate to the BitsharesXYieldFund? Then add that to the Yield as a way to market BitUSD. This way Yield can be privately funded by other DACs. If possible someday why not a UniversalYieldFund where DACs connect privately support the Yield of other DACs?

    Donating to the YieldFund should be a one way process. It should allow participants and eventually DACs to donate to the Yield of Bitshares X (and eventually other DACs). Atomic cross chain transactions might be able to do something beautiful if the process is refined.

    « Last Edit: October 02, 2014, 12:09:15 am by luckybit »
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    Offline GaltReport

    Quote
    1. pay your employees in bitUSD
    2. pay your contractors in bitUSD
    3. let the bitshares DNS, Votes, Music etc. integrate bitUSD payment from the start - as easy as possible
    4. establish an easy way to convert USD in bitUSD - this will bring new money in the system

    we need more purpose for bitUSD and everything else will follow

     Exactly! +5%

    Lot's of truth here!  +5%


    Edit: Fiat On-Ramps + merchant adoption + best interest we can give without inflation or spending marketing budget on.
    Their are 2 arguments at work here.
    1. give bitUSD value through utility like the above states
    2. add interest/yield to bitUSD

    Unless bytemaster knows something we don't and all ready has a plan for option 1 through a deal with a gateway/on-ramp I just don't see the logic of option 2. btsx reached the cap it is at today because of the value of the platform, why wouldn't we apply the same logic to bitUSD?

    Well there's money from long term shorts who dont mind competing on fees and not collateral. Assuming two equal systems the one that added the interest from the long term shorts would win, so I'm in favour if adding interest. 

    In terms of the marketing fund suggestion, I think, again assuming two equal systems, at whatever stage they are, if one had $1 million of promotional funds to subsidize BitYield for the first 6 months it could probably kickstart $20 million worth of BitAsset demand & as a result would most likely be the one that got bootstrapped. So I see the logic there.

    I think if you did this in isolation, that is, without any improvement in general BitUSD utility (i.e. converting to fiat and/or merchant adoption), it would not have a great effect.  Done in combination I would agree it could be beneficial.

    Edit:  First thing I did after buying BitUSD as a new user was try to convert to USD and it was not an encouraging experience.
    « Last Edit: October 01, 2014, 11:27:10 pm by GaltReport »

    Offline Empirical1.1

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    Quote
    1. pay your employees in bitUSD
    2. pay your contractors in bitUSD
    3. let the bitshares DNS, Votes, Music etc. integrate bitUSD payment from the start - as easy as possible
    4. establish an easy way to convert USD in bitUSD - this will bring new money in the system

    we need more purpose for bitUSD and everything else will follow

     Exactly! +5%

    Lot's of truth here!  +5%


    Edit: Fiat On-Ramps + merchant adoption + best interest we can give without inflation or spending marketing budget on.
    Their are 2 arguments at work here.
    1. give bitUSD value through utility like the above states
    2. add interest/yield to bitUSD

    Unless bytemaster knows something we don't and all ready has a plan for option 1 through a deal with a gateway/on-ramp I just don't see the logic of option 2. btsx reached the cap it is at today because of the value of the platform, why wouldn't we apply the same logic to bitUSD?

    Well there's money from long term shorts who dont mind competing on fees and not collateral. Assuming two equal systems the one that added the interest from the long term shorts would win, so I'm in favour if adding interest. 

    In terms of the marketing fund suggestion, I think, again assuming two equal systems, at whatever stage they are, if one had $1 million of promotional funds to subsidize BitYield for the first 6 months it could probably kickstart $20 million worth of BitAsset demand & as a result would most likely be the one that got bootstrapped. So I see the logic there.


    Offline Gentso1

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    Quote
    1. pay your employees in bitUSD
    2. pay your contractors in bitUSD
    3. let the bitshares DNS, Votes, Music etc. integrate bitUSD payment from the start - as easy as possible
    4. establish an easy way to convert USD in bitUSD - this will bring new money in the system

    we need more purpose for bitUSD and everything else will follow

     Exactly! +5%

    Lot's of truth here!  +5%


    Edit: Fiat On-Ramps + merchant adoption + best interest we can give without inflation or spending marketing budget on.
    Their are 2 arguments at work here.
    1. give bitUSD value through utility like the above states
    2. add interest/yield to bitUSD

    Unless bytemaster knows something we don't and all ready has a plan for option 1 through a deal with a gateway/on-ramp I just don't see the logic of option 2. btsx reached the cap it is at today because of the value of the platform, why wouldn't we apply the same logic to bitUSD?

    Offline xeroc

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    With payment processors, do we see them incorporating BitUSD as the standard currency as opposed to the actual BitShares-X?
    I HOPE so .. BTSX is just a token and not a currency .. shouldn't therefore be used as such ..

    Offline Final_Acclaim

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    With payment processors, do we see them incorporating BitUSD as the standard currency as opposed to the actual BitShares-X?

    Offline GaltReport

    Quote
    1. pay your employees in bitUSD
    2. pay your contractors in bitUSD
    3. let the bitshares DNS, Votes, Music etc. integrate bitUSD payment from the start - as easy as possible
    4. establish an easy way to convert USD in bitUSD - this will bring new money in the system

    we need more purpose for bitUSD and everything else will follow

     Exactly! +5%

    Lot's of truth here!  +5%


    Edit: Fiat On-Ramps + merchant adoption + best interest we can give without inflation or spending marketing budget on.
    « Last Edit: October 01, 2014, 09:32:38 pm by GaltReport »

    Offline sschechter

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    Yup. But if the promotion wasn't successful in increasing demand or merchant adoption (for other reasons such as bugs in the client, lack of usability for the average user, etc.), then it would be a big waste of money. It would just be a wealth transfer from the funder (either I3 if they are using their marketing fund or BTSX holders if they fund it through inflation) to the other members in our community who chose to hold BitAssets. I think it is way too premature to be thinking about this plan (and by the time it is not premature, hopefully the DAC revenue will be large enough that it can sustain 5% yields by itself). There are much bigger barriers to adoption right now that have nothing to do with the lack of high yields on BitUSD. We need a better client. We need a lightweight client. We need better cold storage methods with the ability to sign transactions offline. We need good multisig security so people don't have to even worry about losing the money in their hot client. We need more exchanges and on-ramps for easily getting fiat into (and also out of) the system. These are all orders of magnitude more important right now than an extra 4% yield.

     +5% +5% +5%
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    Offline arhag

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    What BM is doing is on one hand try to convince people that the price of BTSX is going to be higher, on the other hand, try to convince people that it's better to sell btsx to bitUSD. Isn't this conflicting?

    Absolutely agree. BitUSD should (eventually) be useful even without any interest/yield. The whole point of this great innovation called BitAssets was to get price stability so we can have an actual cryptocurrency. Well that and traders speculating on short term price changes of various BitAssets and BTSX relative to one another. But I think most of the demand would come from people using it like a currency. Why would someone want price stability? So that their purchasing power isn't reduced because of volatility. If you aren't purchasing anything in the short term, you don't really care about short-term volatility. If you are just holding for the medium/long term and you really believe in this technology, you would want to hold (or short if possible) BTSX for maximum gain.

    Demand for BitUSD will increase once we have goods/services we can actually spend it on. This won't happen until we get some merchant adoption. Having a reasonable yield on top is a really nice addition because it is more than you would get holding that money in your bank savings account, making it more attractive for the regular person to hold their currency as BitUSD in BitShares X rather than as USD in a traditional bank. But BitUSD with yield is still not a substitute for savers holding the majority of their cryptowealth as the high growth BTSX in the medium/long term (at least, this is true in the growth phase of the DAC).

    I think the idea is that it would kickstart adoption and bootstrap BitAssets and create a market third parties and merchants would want to interact with, so that when the promotional period ended, the BitAsset ecosystem would be self sustaining.

    Yup. But if the promotion wasn't successful in increasing demand or merchant adoption (for other reasons such as bugs in the client, lack of usability for the average user, etc.), then it would be a big waste of money. It would just be a wealth transfer from the funder (either I3 if they are using their marketing fund or BTSX holders if they fund it through inflation) to the other members in our community who chose to hold BitAssets. I think it is way too premature to be thinking about this plan (and by the time it is not premature, hopefully the DAC revenue will be large enough that it can sustain 5% yields by itself). There are much bigger barriers to adoption right now that have nothing to do with the lack of high yields on BitUSD. We need a better client. We need a lightweight client. We need better cold storage methods with the ability to sign transactions offline. We need good multisig security so people don't have to even worry about losing the money in their hot client. We need more exchanges and on-ramps for easily getting fiat into (and also out of) the system. These are all orders of magnitude more important right now than an extra 4% yield.

    Offline Empirical1.1

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    1. pay your employees in bitUSD
    2. pay your contractors in bitUSD
    3. let the bitshares DNS, Votes, Music etc. integrate bitUSD payment from the start - as easy as possible
    4. establish an easy way to convert USD in bitUSD - this will bring new money in the system

    we need more purpose for bitUSD and everything else will follow

     Exactly! +5%

    Yeah. I am getting a little tired of all these really hack-y "solutions" to bitAsset yield. I think putting subsidies into bitAsset yield would be pretty lame. They would stimulate demand only as long as they were being paid, and as soon as the promotional period ended, demand for bitAssets would dry up again. Just keep working on getting a solid product and getting merchant adoption. Yield will be icing on the cake when it's all said and done.

    Or, implement drltc's plan for shorts to pay interest to longs.

    Sent from my SCH-S720C using Tapatalk 2

    I think the idea is that it would kickstart adoption and bootstrap BitAssets and create a market third parties and merchants would want to interact with, so that when the promotional period ended, the BitAsset ecosystem would be self sustaining.

    I personally think it makes a lot of sense and I'm personally for throwing the kitchen sink at incentivising BitAsset demand, but I'm 100% against inflation. 

    1. I would maximise interest by making long term shorts compete on fees & put all BTSX currently burned into BitYield too.

    2. Do Mf-tzo steps 1-4

    3. Unfortunately there's no shortcut to

    - creating a stable, robust client (One that would function well for a few months even if a meteor hit I3)
    - DPOS that is decentralised (The market believing the developer stake is influencing but not controlling delegates. So it would involve focusing on getting more non-voting stake into play - voting week, make registering new account easier, encouraging using BTC38 & bter but not keeping too much on them.)
    - The peg just having a bit of a track record. 

    The above would create faith that BitAssets are fairly safe for the next year.
    (The difference in interest required for BitAssets with vs. without that faith is huge imo.)


    Also I don't think we've seen other BitAssets in action yet, I think BitGold and BitSilver demand could surprise and help bring attention to, promote BitAssets too.





    Offline ripplexiaoshan

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    Quote
    1. pay your employees in bitUSD
    2. pay your contractors in bitUSD
    3. let the bitshares DNS, Votes, Music etc. integrate bitUSD payment from the start - as easy as possible
    4. establish an easy way to convert USD in bitUSD - this will bring new money in the system

    we need more purpose for bitUSD and everything else will follow

     Exactly! +5%
    In order to do the above don't we need some sort of gateway where bitUSD can be traded for hard cash until a greater adoption happens?
    I agree with the above, we need to give bitUSD value and a direct bitUSD to fiat exchange so that employees and merchants can actually use it.


    Personally I think BM is fighting in a wrong way.

    To encourage people to hold bitUSD, you need to convince people that holding bitUSD is better than holding BTSX. That means either let people believe that the price of BTSX is going down, which is not the current situation nor what BM wants,  or, bitUSD need to be more useful than BTC, BTSX, etc.., such as gaming or gambling that only supports bitUSD.

    What BM is doing is on one hand try to convince people that the price of BTSX is going to be higher, on the other hand, try to convince people that it's better to sell btsx to bitUSD. Isn't this conflicting?
    BTS committee member:jademont

    Offline Gentso1

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    Quote
    1. pay your employees in bitUSD
    2. pay your contractors in bitUSD
    3. let the bitshares DNS, Votes, Music etc. integrate bitUSD payment from the start - as easy as possible
    4. establish an easy way to convert USD in bitUSD - this will bring new money in the system

    we need more purpose for bitUSD and everything else will follow

     Exactly! +5%
    In order to do the above don't we need some sort of gateway where bitUSD can be traded for hard cash until a greater adoption happens?
    I agree with the above, we need to give bitUSD value and a direct bitUSD to fiat exchange so that employees and merchants can actually use it.

    Offline biophil

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    Quote
    1. pay your employees in bitUSD
    2. pay your contractors in bitUSD
    3. let the bitshares DNS, Votes, Music etc. integrate bitUSD payment from the start - as easy as possible
    4. establish an easy way to convert USD in bitUSD - this will bring new money in the system

    we need more purpose for bitUSD and everything else will follow

     Exactly! +5%

    Yeah. I am getting a little tired of all these really hack-y "solutions" to bitAsset yield. I think putting subsidies into bitAsset yield would be pretty lame. They would stimulate demand only as long as they were being paid, and as soon as the promotional period ended, demand for bitAssets would dry up again. Just keep working on getting a solid product and getting merchant adoption. Yield will be icing on the cake when it's all said and done.

    Or, implement drltc's plan for shorts to pay interest to longs.

    Sent from my SCH-S720C using Tapatalk 2

    Support our research efforts to improve BitAsset price-pegging! Vote for worker 1.14.204 "201907-uccs-research-project."

    Offline mf-tzo

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    Quote
    1. pay your employees in bitUSD
    2. pay your contractors in bitUSD
    3. let the bitshares DNS, Votes, Music etc. integrate bitUSD payment from the start - as easy as possible
    4. establish an easy way to convert USD in bitUSD - this will bring new money in the system

    we need more purpose for bitUSD and everything else will follow

     Exactly! +5%

    Offline Shentist

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    I have been thinking that a good way to bootstrap interest in BitUSD is to have the yield subsidized.   A kind of promotion to encourage people to try it out.   

    We also need an honest way to account for "projected yield" but I don't know how to do that because there are too many variables:

    1) trade volume could increase generating increased fees and higher yield
    2) USD supply could increase decreasing average yield
    3) USD supply could decrease increasing average yield
    4) an unknown percent of USD never claims yield (turn over, short holding period)

    Without knowing all of these things it is impossible to predict exactly the yield in BitUSD..

    as much as i respect you bytemaster, but i think you are fighting the wrong battles at the moment.

    sure it is to complicated, but the reason are your own rules.

    i would do it as simple as possible

    1. just pay yield daily to every bitUSD in existence
    2. you could publishes average yield in past 3/6/12 month and expected yield 3 month

    i am not a fan to pay different yields, makes it so much complicated

    AND

    you should seek a purpose of bitUSD, then everything will fall in place. At the moment the need of a stable crypto is not needed for traders or investors, so you need a group of people who want to solve a problem.

    1. merchants - need stable currency

    so, to talk to merchants to accept bitUSD is a tough way, but maybe we have a better solution. we should make bitUSD the needed currency in the bitshares ecosystem for paying everyone included.

    1. pay your employees in bitUSD
    2. pay your contractors in bitUSD
    3. let the bitshares DNS, Votes, Music etc. integrate bitUSD payment from the start - as easy as possible
    4. establish an easy way to convert USD in bitUSD - this will bring new money in the system

    we need more purpose for bitUSD and everything else will follow

    Offline theoretical

    We also need an honest way to account for "projected yield" but I don't know how to do that because there are too many variables:

    BitUSD that comes in from yield -- fees, short interest, whatever -- should go into a buffer fund.

    Every block, some tiny percentage of the buffer fund goes into the "accrued yield fund."  Thus, with no future network income, the buffer fund would decay exponentially with some predictable half-life we can set.  Let's set it to one month.

    A distribution event from the accrued yield fund will occur when the accrued yield fund has accumulated to 0.01% of the eligible BitUSD.  Eligible BitUSD are those that haven't moved since the last distribution event.  Iterating through every immobile BitUSD balance is a technical issue with this approach, but we can avoid it with a clever implementation [1].

    Transparently showing projected yield can be based on the buffer fund's income.  You can also show a single APY number for the income in a year based on the assumption that the buffer fund's income on future days will be equal to its average per-day income over the last 30 days.  Then also show the range of what will happen if the income goes up or down by one standard deviation.

    You could even show a graph of what the APY over time will be if the current funding level continues, if the income goes up or down one standard deviation, if the income doubles, halves, or goes to zero.

    [1] We don't want to iterate through every immobile BitUSD balance on every distribution event.  So instead we merely record the block number at which the distribution event occurred, and move the 0.01% to a third fund, the distribution fund.  Then whenever a BitUSD balance requests its yield, you check how many distribution events occurred since it last moved (minus one, since it wasn't eligible for the first distribution event).  Then pay from the distribution fund 0.01% times the amount of BitUSD times the number of distribution events.

    Besides solving the technical problem, this implementation also provides honest accounting of untouchable BitUSD, which are currently very hard to figure out.  The distribution fund can be immediately claimed by longs at any time.  The accrued yield fund and buffer fund are untouchable right now -- but the longs are assured that BitUSD will move from them into the distribution fund, in a timely manner, according to a simple, predictable, transparent algorithm.

    « Last Edit: October 01, 2014, 06:11:33 pm by drltc »
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    Offline Ander

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    I don't think we should do this, because it looks kindof like a ponzi scheme.  (Its actually kindof a reverse ponzi, using funds from original investors to pay new investors?)  I think people will just see "they are using investment funds to pay higher interest" and think "ponzi", and then not investigate further.


    We should work on increasing demand for bitAssets by fixing the bugs that are preventing people from using them, improving the user experience, making it less complicated/educating people, and finding partners who want to accept bitUSD, thus increasing the demand. 

    Paying extra interest out of funds that were invested into BTSX is not sustainable, it is not a free market solution.  The yield on bitUSD should represent real profits, being paid to holders.  It should not be artificially inflated through the dilution of BTSX, which would simply make bitUSD buyers wonder when the bonus interest is going to be cut off, at which point they will dump.
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    Offline sschechter

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    We simply inflate BTSX 5% the first 12-18 months, then we get a stable 10%+ return on bitAssets, as they require 2x BTSX as collateral. If we hover around 100 million market cap, this is the same as spending 5 million dollars to market bitAssets. 5% a year inflation is a trifle in this space that only a complete moron would cry about - 10x increase would be imminent if we include the proposal in a global marketing campaign.

    This is your opinion and pure speculation. You cannot guarantee a 10x increase.  You cannot even guarantee a 5% increase.  You also cannot guarantee that arbitrarily inflating the share supply to appease rent seekers will not chase serious investors away, invite bad press, etc.  Marketing funds should be for marketing, not bribing.
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    Offline theoretical


    I agree that supercharging BitAsset yield is a great way to boost demand for our product and help us market it.

    I'd suggest simply making the shorts pay interest -- that was the original plan!

    If I read this correctly, you're talking about some form of dilution, or massive infusion of I3 funds, merely to boost BitUSD yield.

    We haven't even tried making shorts pay interest.

    And lots of the BitUSD in the yield fund's current implementation is actually untouchable -- it'll never be paid out, due to the way the yield fund implemented!
    BTS- theoretical / PTS- PZxpdC8RqWsdU3pVJeobZY7JFKVPfNpy5z / BTC- 1NfGejohzoVGffAD1CnCRgo9vApjCU2viY / the delegate formerly known as drltc / Nothing said on these forums is intended to be legally binding / All opinions are my own unless otherwise noted / Take action due to my posts at your own risk

    Offline Empirical1.1

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    We simply inflate BTSX 5% the first 12-18 months, then we get a stable 10%+ return on bitAssets, as they require 2x BTSX as collateral. If we hover around 100 million market cap, this is the same as spending 5 million dollars to market bitAssets. 5% a year inflation is a trifle in this space that only a complete moron would cry about - 10x increase would be imminent if we include the proposal in a global marketing campaign.

    Then I sir, am proud to be a complete moron.

    I guess it is the other way around, really. The solution of simply giving away money to new customers is too stupid, too retarded to be entertained seriously by the merely intelligent. It takes a special kind of moron to see it.  :D

    I'm an advocate of maximising the yield & BitAsset demand in every conceivable way possible, even taking burned BTSX fees and giving them to BitYield and also making long term shorts compete on interest. And ELI5 explaining the trade where you short and take the other side of your trade to maximise your interest.  I am ALL ABOUT maximising BitAsset demand.

    Inflation though will kill BTSX and will probably kill BitShares imo. Even the inflation in Bitcoin is only acceptable because it is part of a pre-defined system, if Bitcoin changed it's inflation model, even by current shareholder consensus it's value would crater imo. 

    Edit: The reason is the amount of certainty investors need about their future equity in DACs & systems that currently have no legal recourse is insanely high. You hear 'forking' being thrown around a lot, but it's not really an option for the independent investor if the developer block supports another option. So their best protection is investing in a pretty iron-clad inflation system and also ones where the initial developers have enough stake to be motivated & influence but not enough to control the DAC. (Unfortunately in practice voter apathy makes that amount in question quite low.) Without that high degree of certainty investment would crater imo.

    If I wasn't so heavily invested in BTSX, I'd actually encourage it just to demonstrate the point. Like if NXT cloned BitAssets and said,  'I have a great idea, let's inflate our share supply by 5% to give out yield on NXT-BitAssets', I would literally egg them on and tell them what a genius idea it was just so I could eliminate the competition.

    I could be wrong though, we can try start a thread on Bitcointalk - 'BitShares inflating BTSX supply by 5% to pay great yield on BitAssets!' and see if we get a hugely positive response.

    Edit: I think the fault is people are comparing DAC's to systems that work in Bricks and Mortar companies. In Bricks & Mortar companies you can give founders or a few shareholders large percentages and probably use inflation a lot more routinely as though flawed there are laws and regulations in place around them. With DAC's shareholding needs to be more decentralised with a pretty iron-clad pre-defined system of inflation or lack thereof. Once DAC's are more established and the systems around them more familiar that may change, but right now this is all kryptonite imo. Though perhaps there's a test case not as critical as BTSX it could be tested on?

    Edit: One more part of my thought process, though I might not be articulating it well...

    Looking at Bitcoin. I think third party DAC's that sit on top of & interact with Bitcoin may be able to get away with messing with inflation by consensus if they are properly decentralised & established, but I don't think Bitcoin could.  (Decreasing its' inflation might be possible, especially as the current model is so atrocious- but just the notion that it's supply structure could be changed at any time - would risk the faith and certainty that it could be trusted as a long term foundation and base of an ecosystem.)   

    If the World Gold Council decided that by turning limestone into gold and increasing the supply this year, they could maximise Jewellery sales, while decided by consensus and perhaps even short term positive (unlikely) it would destroy the notion & value of gold as a base for an entire ecosystem revolving around it. (If any human group could change its supply, even by consensus.)

    I don't think you can make the share supply more than 2 billion BTSX even by consensus without destroying BTSX's long term potential to be a base of a decentralised banking & BitAsset ecosystem, which I believe is our goal. 
    « Last Edit: October 01, 2014, 07:04:23 pm by Empirical1.1 »

    Offline CLains

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    We simply inflate BTSX 5% the first 12-18 months, then we get a stable 10%+ return on bitAssets, as they require 2x BTSX as collateral. If we hover around 100 million market cap, this is the same as spending 5 million dollars to market bitAssets. 5% a year inflation is a trifle in this space that only a complete moron would cry about - 10x increase would be imminent if we include the proposal in a global marketing campaign.

    Then I sir, am proud to be a complete moron.

    I guess it is the other way around, really. The solution of simply giving away money to new customers is too stupid, too retarded to be entertained seriously by the merely intelligent. It takes a special kind of moron to see it.  :D

    Offline sschechter

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    So we pay people to achieve a certain yield in hopes of driving up the volume until we actually achieve that yield?  A training wheel of sorts?  What happens when the promotion period ends and we don't hit our goal?  What if yield drops to 3%, or back even to 1.5%.  That would make it look worse than now, and the returns artificial.  People did not like the idea of  +5% because it sounded too good to be true and a Ponzi scheme.  What will we be called when we just pay you an arbitrary rate of interest to use our product?  NuBits? I do not like this proposal. There has to be a better way than this.  This proposal is to marketing what prostitution is to dating.
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    Offline Empirical1.1

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    We simply inflate BTSX 5% the first 12-18 months, then we get a stable 10%+ return on bitAssets, as they require 2x BTSX as collateral. If we hover around 100 million market cap, this is the same as spending 5 million dollars to market bitAssets. 5% a year inflation is a trifle in this space that only a complete moron would cry about - 10x increase would be imminent if we include the proposal in a global marketing campaign.

    Then I sir, am proud to be a complete moron.

    Offline CLains

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    We simply inflate BTSX 5% the first 12-18 months, then we get a stable 10%+ return on bitAssets, as they require 2x BTSX as collateral. If we hover around 100 million market cap, this is the same as spending 5 million dollars to market bitAssets. 5% a year inflation is a trifle in this space that only a complete moron would cry about - 10x increase would be imminent if we include the proposal in a global marketing campaign.
    « Last Edit: October 01, 2014, 03:34:56 pm by CLains »

    Offline santaclause102

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    I like the intention to have something fixed yield savers can rely on.

    But I would say this (if my question in the previous post can be answered with yes):
    1) The problem is not that the yield is too low. Problem is more that the system is too new and people that ask for FIXED yields normally are conservative and would either
    a) Want to understand the system fully (difficult but maybe possible with a lot of good analogies and without exaggerated future outlooks / promises which just create resistance and doubt) or
    b) Want some authority they trust to "confirm" that it is safe. Those sources of trust are: "scientists", banks, big companies / merchants accepting bitusd, marketers they trust (not saying that this should be so, it is just my observation; for many ppl trust in an institution correlates with TV time and size).
    2) Yield could be stated as "*average yield of the last month extrapolated to one year*.
    3) People might say: "They have to subsidize their yield because there really is non"
    Subsidized yields might also disguise the actual nature of the real yield.

    I personally trust things when I can see trough them and when things are presented to me as they are. The yield could be best described by "trading fee yields". This makes sense to everyone and does not generate the "this must be a scam, they have more interest on USD than established banks and they created the usd from nothing" response.

    But there are two sides to every coin... So the question is: How much yield per year would we have at current trading volume?  Is the height or the unpredictability of the yield the problem?

    Offline arhag

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    I only support this if we first have ways of prioritizing which BitAsset yields we care about, what the yield caps for each should be, AND an ability to convert the value from fees from one BitAsset that we don't care to subsidize into BitAsset yields for the BitAsset we do care to subsidize (e.g. convert BitBTC market fees in excess of its 1% yield into BitUSD to top off the 5% BitUSD yield). Otherwise, I would hate to see BTSX inflation go towards BitAsset yields haphazardly (e.g. stupidity like 5% yield to all BitAssets). Or did you mean doing all of this manually by having the delegates purchase and burn BitAssets with their inflated BTSX stake rather than having the DAC automatically manage it?

    Also, can we just use a simple linear yield (who cares if people want to spend transaction fees for compounding) so that the accounting is simpler (although I think drltc has a more complex solution that could allow for continuous compounding interest)? Meaning BitUSD funds in the reserve fund can be moved into a yield fund every block by an amount equal to a variable percentage of issued BitUSD (all except the ones in the reserve and yield funds) at the time of the block. Then the variable percentage is accumulated over each block and that sum is known for any given block. Then a transaction being moved simply requires adding a percent yield on the balance (and deducting the corresponding amount from the yield fund) where that percentage is calculated as the difference between the sum at the current block at which it is being moved and the sum at the block in which the transaction was created. This way the yield on all BitAsset balances increases monotonically. The per block percentage would of course still be variable because of all the unknowns you mentioned. However, if you really want to subsidize it to some fixed percentage, you could make sure there was enough BitAssets in the reserve fund to be able to pull out the same targeted per block percentage by first keeping considerable padding (which could also act as a black swan fund) and making up for deficiencies in refilling that fund from bid-ask overlap and BitAsset tx fees by simply buying the BitAsset on the open market with the inflated BTSX.
    « Last Edit: October 01, 2014, 01:55:34 pm by arhag »

    Offline santaclause102

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    Do you mean that AGS funds would be used to guarantee a min. yield?

    Offline bytemaster

    I have been thinking that a good way to bootstrap interest in BitUSD is to have the yield subsidized.   A kind of promotion to encourage people to try it out.   

    We also need an honest way to account for "projected yield" but I don't know how to do that because there are too many variables:

    1) trade volume could increase generating increased fees and higher yield
    2) USD supply could increase decreasing average yield
    3) USD supply could decrease increasing average yield
    4) an unknown percent of USD never claims yield (turn over, short holding period)

    Without knowing all of these things it is impossible to predict exactly the yield in BitUSD..
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