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ineededausername

hero member

Activity: 784

Merit: 1000

bitcoin hundred-aire

Quote from: ?? on ??

If you do not scroll down the insert in ineedausername's post you miss the tl;dr summary:

Quote

As one example [of what the full chart shows] if you think Pirate has a 15% chance of defaulting you are expected to break even on bids under or at 1.12.

If you have a Pirate invite you should:

Code:

  bid under 1.04 if you have >2000 BTC
  bid under 1.12 if you have >500 BTC
  bid under 1.16 if you have >100 BTC

(note that those last three bid limits assume a 15% chance of defaulting, too)

Drifter

sr. member

Activity: 364

Merit: 252

^ Thanks for this

ineededausername

hero member

Activity: 784

Merit: 1000

bitcoin hundred-aire

Another table!

edit: OgNasty deleted from table at his request.

Code:

I've deleted the table pending better wording, as many people (or I!) misunderstood what exactly
the numbers in it meant.

Sukrim

legendary

Activity: 2618

Merit: 1007

Quote from: ?? on ??

The following chart shows how much monthly interest you will make given different winning bid amounts:

Code:

Your    Your    Eqiv-
Bid     28d     alent
BTC     Rate     APR
----    ----    -----
1.00     28%     364%
1.04     24%     312%
1.08     20%     260%
1.12     16%     208%
1.16     12%     156%
1.20      8%     104%
1.24      4%      52%
1.28      0%       0%

If I pay 1.20 and get 8% interest, I would get 1.20 + 1.20*0.08 = 1.296 BTC... Wink

Percentages can be confusing, I know.

@coinjedi: Thanks for the clarification, good to know I'll make another ~25 Bitcents with betco.in! Grin

PatrickHarnett

hero member

Activity: 518

Merit: 500

Public knowledge that my first deposit was 17 December (four months ago). My balance with Pirate has been pretty static for the last month or two and accounts for around 1/3 of the coins I have invested. I also have a couple of thousand in investments like GLBSE, and a diversified loan book covering 18 different people for terms from one week to six months (ranging from 50 to 1500 coins). So, insuring/backing these bonds is just another part of the portfolio.

So, yes, we have some decent sized accounts of long standing with Pirate.

imsaguy

vip

Activity: 574

Merit: 500

Don't send me a pm unless you gpg encrypt it.

You know me.

coinjedi

full member

Activity: 184

Merit: 100

Quote from: MrTeal on April 14, 2012, 12:50:35 PM

Quote from: Sukrim on April 14, 2012, 04:34:51 AM

Quote from: OgNasty on April 13, 2012, 10:07:23 PM

Quote from: filharvey on April 13, 2012, 07:16:48 PM

How close will this hit. My guess is around 1.1? Making 16% interest?

I'm curious as well. Perhaps a bet is in order?
http://betsofbitco.in/item?id=337

Seems like it's VERY easy to manipulate that bet though - all you need is to place a buy order at 1.1001 or something and you still will make 18 bitcents from the contract as well as win the bet with 100% certainty.

Depends on what the bet means. Is that the highest price that a bond is sold for, or the lowest? If the bet refers to the lowest price that is still accepted, then it would be much more difficult to manipulate.

I just put a clarification. It is the lowest price a bond is sold for.

Raoul Duke

legendary

Activity: 1358

Merit: 1002

Burt, sorry to rain on your parade, but, which is it? Fully insured or insured at 25%?
I see you throw the "fully insured" and after you say "25% insured" and I've seen it a couple times already on this thread... Make up your mind and don't confuse people. Just tell them outright that you'll only cover 25% in case Pirate defaults.

Nefario

hero member

Activity: 602

Merit: 513

GLBSE Support [email protected]

We will be adding functionality to force buyback of shares or assets that have this clause in their contract.

This will not be in the next update to GLBSE (by Friday) but the one following.

Sukrim

legendary

Activity: 2618

Merit: 1007

Another benefit would be that dividends show up clearly in the payout history, giving you more credibility and it might be easier to understand than some weird jumps in share value every few weeks. Also you reward earlier adopters (as they can decide to hold onto their shares). Damn, I should have studied something more closely related to the finance sector... Wink

marked

full member

Activity: 168

Merit: 100

Quote from: ?? on ??

Some people have bid to buy shares of PPT at very low prices. This just ties up funds they could be using to bid on other things - like PPT.A

I had a bit of a WTF moment when I saw the ticker for PPT, and mine was the order at 0.001.

It seemed like a good idea at the time to make 100,000% i didn't want to be too greedy and go for a milllion, or have more than 1 share...

marked, who has no hope of ever getting it unless something seriously goes wrong.

wachtwoord

legendary

Activity: 2324

Merit: 1125

With normal bonds the coupon (interest) is transferred to the bond holder every time a payment is due. On the date of the final coupon, the principal is returned as well.

With these bonds there is only one coupon date so it would make most sense to issue a dividend of 1.28 on the final day, rendering the remaining bond valueless (no interest payments nor principal left --> 0 value). After that you would just give out new bonds with another code and start the process anew.

This would also create an incentive for GLBSE to create a way to cleanup these zero value left over bonds to stop their system becoming a mess

Sukrim

legendary

Activity: 2618

Merit: 1007

Quote from: ShadowAlexey on April 15, 2012, 03:59:53 AM

Quote from: ?? on ??

As to your concern for the people who might be on vacation during an early buy back event, if we are unwinding the bond offerings we will be leaving the buy orders on the accounts for a very long time in order to give the bond holders plenty of time to sell their bonds. In this scenario we would also be working with GLBSE to locate and refund all the bond holders directly in to their accounts.

I just dont get,why not to pay all cost of order as a dividend, so you would have no more obligations on this,and then buy it back at very small rate?

For liquidation a final dividend might be the way to go, for normal operations not, as it then is better to just keep the shares and get the next 1.28 6 weeks later.

On the other hand you might make more profit by allowing asset owners to keep their shares and paying 0.28 as dividend every 6 weeks... as you earn an extra 0.14 per share in the meantime by holding onto the money.

This means you could change it to:
1) Offer 2000 shares @1.00 BTC each
2) 28 days later: Pay out a dividend @0.28 BTC each and put up a buy offer @ 1.00 BTC each
3) 1 week later: Cancel buy offer
4) 1 week later: Offer all bought back shares @1.00 BTC each (selling to the highest bidders at the time), continue at 2)

Whoever is lazy enough to just stick with it and leave the money in, gives you an additional 1-2 weeks of keeping the BTC they invested for free (1 week if you consider they could withdraw + buy shares in PPT.x+1, 2 weeks if they don't even reinvest their dividends). Also IPO bidding might get higher (though people could also be tempted to sell instead of you as a down forcing factor...) with this, at a theoretical cap @1.14 (above this it would make more sense to hold onto shares for the additional 2 weeks and sell them instead of you as the operators).

ShadowAlexey

donator

Activity: 968

Merit: 1002

Quote from: ?? on ??

As to your concern for the people who might be on vacation during an early buy back event, if we are unwinding the bond offerings we will be leaving the buy orders on the accounts for a very long time in order to give the bond holders plenty of time to sell their bonds. In this scenario we would also be working with GLBSE to locate and refund all the bond holders directly in to their accounts.

I just dont get,why not to pay all cost of order as a dividend, so you would have no more obligations on this,and then buy it back at very small rate?

PatrickHarnett

hero member

Activity: 518

Merit: 500

Quote from: exahash on April 14, 2012, 10:11:50 PM

Quote from: ?? on ??

We think we have a way around this - see if you can game it:

On the day and hour the bonds mature we issue a buy order for all the outstanding bonds for 1.28 BTC each. This will buy all the bonds except 1) those bonds that are not currently up for sale and 2) those bonds that may be listed for more than 1.28.

There is then a one week buy back period. This gives everyone a chance to get their bonds listed and sold.

What if you decide to buy back early?

The OP mentions the possibility of your buying back on day 15 at 1.15. All those people who bought, immediately put in a sell for 1.28, and went on vacation for a month will be SOL?

Seems like a mechanism to forcibly recall all shares is really in order.

Actually that is a fair point. It was designed to cover the event where the pass-though suddenly stops. It doesn't protect someone who buys above the "forced buy rate, and it is greatest at the start of the round. i.e. if the average sale price is 1.10 and we do a buy-back on day two, there would be a lot of pissed off people.

I think Burt can re-word to tighten the circumstances, but the potential remains (at some stage in the future) for Pirate to change his business.

exahash

sr. member

Activity: 278

Merit: 250

Quote from: ?? on ??

We think we have a way around this - see if you can game it:

On the day and hour the bonds mature we issue a buy order for all the outstanding bonds for 1.28 BTC each. This will buy all the bonds except 1) those bonds that are not currently up for sale and 2) those bonds that may be listed for more than 1.28.

There is then a one week buy back period. This gives everyone a chance to get their bonds listed and sold.

What if you decide to buy back early?

The OP mentions the possibility of your buying back on day 15 at 1.15. All those people who bought, immediately put in a sell for 1.28, and went on vacation for a month will be SOL?

Seems like a mechanism to forcibly recall all shares is really in order.

schnell

sr. member

Activity: 266

Merit: 250

Quote from: ?? on ??

Quote from: schnell on April 14, 2012, 07:36:05 PM

Burt, I understand the ppt.a, b and everything, but what is the ppt(no extra letter) that is selling?

Ah yes, I meant to mention that - especially the bids that have been placed. That is the company that is issuing and backing the PPT.x bonds. It is privately held by the 5 lenders mentioned above. We each buy shares in this company at 100 BTC each. The BTC collected in this company just stays there as insurance against a total default by Pirate. It is not deposited in any Pirate related account as that would defeat the entire purpose of the funds.

So far we have sold 5 shared for a total capitalization of 500 BTC. By our own rules this allows us to sell 500 x 4 = 2000 BTC in bonds. In other words we have set aside enough BTC inside of PPT to pay back the bond holders 25% of their investment in case of a default. You will notice that another 5 shares will be purchased before the next round of 2000 bonds, then another 5 shares, etc.

Some people have bid to buy shares of PPT at very low prices. This just ties up funds they could be using to bid on other things - like PPT.A

Ah, nice idea.

Sukrim

legendary

Activity: 2618

Merit: 1007

Quote from: ?? on ??

We think we have a way around this - see if you can game it:

I buy all 2000 shares and never release them back to you again, effectively blocking trading with this asset.

On the other hand you earn more from someone not selling back his/her shares than anything else (noone in their right mind will bid above 1.28 for a share), so it's actually in your interest to make it not easy to get the money back automatically...

As far as I get your current plan is:
1) Offer 2000 shares @1.00 BTC each
2) 28 days later: Buy 2000 shares @1.28 BTC each
3) 1 week later: Cancel buy offer
4) 1 week later: Offer all bought back shares @1.00 BTC each, continue at 2)
right?

schnell

sr. member

Activity: 266

Merit: 250

Burt, I understand the ppt.a, b and everything, but what is the ppt(no extra letter) that is selling?

schnell

sr. member

Activity: 266

Merit: 250

Quote from: Sukrim on April 14, 2012, 04:55:24 PM

I also thought about the "bond recycling", but as far as I know, there's no way for you to force users to sell you their shares back. Also you can not just hand out 0.28 BTC as far as I understood, as you want to make your cut by selling 1 BTC shares for > 1 BTC each week.

You could create new shares and keep a buyback offer open, this is exploitable however:
Let's say you sell 2000 shares and 4 weeks later buy back 1877 of them @1.28. You then have an open buy order for 123 shares @1.28. Then, to get back to 2000 shares emitted, you issue 123 more share, totalling to 2123 shares, sell 2000 shares and most likely this buy order will be fulfilled quickly, but not by the sleepyheads that did forget to sell their shares in the first place.

If possible with GLBSE, you could ask them to destroy the shares after paying the final dividend, they might need a way to liquidate assets anyways. Perhaps a feature request for a "liquidate asset" button (paying a final dividend and destroying all shares or returning them all to the issuer) might be in order?

+1 TO THIS FEATURE

Topic: . - page 35. (Read 67488 times)