Marketing Fund to Subsidize BitUSD / BitBTC yield?

[Empirical1.1]

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!

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.

[ripplexiaoshan]

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!

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?

[Gentso1]

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!

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.

[biophil]

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!

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

[mf-tzo]

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!

[Shentist]

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

[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.

[Ander]

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.

[sschechter]

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.

[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!

[Empirical1.1]

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. 

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. 

[CLains]

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. 

[sschechter]

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  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.

[Empirical1.1]

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.

[CLains]

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.