Topic: [BitFunder] My name is Bond. MPOE Bond. ( Jan: 9.99%, Feb: 4.8% Mar: -23%) (Read 9044 times)

xkrikl, good questions btw...

Rini17, why do you keep calling this BS a "bond"?

Bond is a loan - loans are usually paid back with interest. If borrower (Popescu) loses money, it's not lenders (Your) problem per se, loan has to be paid back regardless of his losses.

You guys are giving your money to a spammer from Romania, who has zero! real life experience with options trading. To make it even more absurd, your money is gambled away by a software/script aka bot, written by that same same guy with no RL experience. 
Did you expect this magical bot to be smarter than buyers of those constantly underpriced options of his?

This is cold hard reality, that anything that purports to provide cover to btc/usd derivatives gets a loss occasionally btc-wise (otherwise it is a scam). Bitcoinica/bitfinex/icbit users get force liquidated, too, often much more than this 23% loss. I really did not expect this to go so badly, but anyway decided to split my investment again approx. 60% to bonds and 40% to call options, and went out unscathed. So I can confidently say it's not Mircea who profited from this.

It would be possible to change MPBPT so that it too tries to hedge using options, but it's really hard to come with solid strategy, that 60/40 one can fail spectacularly when price is stable.

- MPOE bond isn't USD denominated.
- in April the BTC/USD price didn't go in one direction only - still huge loss
- the bot is incompetent ... and the fact that when we've seen March results there was no way out for April investment makes this second loss painfull but expected
- question is if the bot's incompetence isn't intended ... and how much MP made on this
- I don't expect anyone covering these bonds which can simply be made to loose again
- at least I won't offer a single satoshi to cover this unless I'm reimbursed for these losses which I can't imagine

Usagi, if you have another wild theory about ART, please take it where it belongs (garbage can) and stop thread crapping.

BTW, usagi is not only investing blindly (he pissed away over 7000 btc of investors money in GLBSE)  but he ha no idea wtf "company value" means.  
Or more precisely, concepts "like currency" risk are completely alien to our beloved Japanese princess Oliver... oops.. usagi.

LOL

You're right that there is a lot of uncertainty here. For example, I thought they were invested into spreads on the price of bitcoins -- but it looks like I was wrong?

Anyways yeah, and S.DICE isn't the hottest investment these days either. Full disclosure, I am invested in both MPOE and S.DICE -- but not the bonds

You do realise MPOE bond isn't dollar denominated?  The problem is you're investing blind - you have no idea of the competence of the bot's algorithm (apparently insufficient as MP has been tweaking it), you're also investing blind for interest rates, and as you point out you tend to be exposed to severe market moves in one direction when writing options.

Given the trust in MP and other blindness involved it's difficult to see much rational value proposition here, unless monthly rates are extremely high (say 25% or more, even then you'd be down over the last year I think if you calculate the compounded return).  I suspect MP is going to have to stump up most of the capital going forwards; or perhaps there are still plenty of people lining up to play something with worse odds that Satoshi Dice.

If you invest money into something that is tied to US dollars and BTC rises in value, you will lose money priced in BTC. The same thing happenes whether or not you purchase a kiln in LTC (yes, ART on LTC-GLOBAL), an LTC bond denominated in BTC, mining hardware or mining bonds (i.e. BMF, CPA, GIGAMINING, YABMC etc.) or even the outright purchase of a call on BTC denominated in us dollars. That's why it was not logical to complain when your own company ART lost 99.5% of it's value.

Back in August IIRC, MPOE Bond lost 46%. Just like BMF. And now they lost like 30% and 25% back to back. C'est la vie. I think it's time that investors here face the reality that BTC is not a magical shield against investing into a US dollar denominated asset, and that when you invest in something you no longer hold BTC, but the asset you have invested in. So when people say that they lost money in something like MPOE Bond that isn't really true. They didn't gain or lose any MPOE Bonds. But the MPOE Bonds themselves are not worth as much as before. That's just a fact. And when you get served your .18 BTC on the dollar, you should say to yourself "Hey, that's worth $23 now, twice as much as I invested!". Not "Shit I just lost 80% of my money". One of these feelings is logical -- one is not.

What happened here was not special. It was predictable. I myself sold out of CoinBr.MPBPT-O back in March because I saw it coming. I sold out at about 0.102 (at a profit). And, as much as I would love to say "ha ha" to MPOE-PR, the fact here is that this is not their "fault".

What happened is simple and easily explained. As the price rose, MPOE Bond wrote/sold and had executed more and more calls at a loss. Lesson learned: Do not invest in MPOE Bond if the price is expected to move in only one direction throughout the month. OTOH stable prices or volatile prices in a trading channel will likely be more profitable.

CoinBr.MPBPT-E April liquidated for 0.07650118 per share.

CoinBr.MPBPT-O May will not proceed with bond investment due to lack of interest (and no partner to enable us to meet 100BTC minimum). Raised funds were returned (0.1 BTC per share).

Further plans are under consideration.

Since MPOE bot uses average price from bitcoincharts, and it's unavailable, there are no quotes and checking the new pricing is not possible at the moment. However, this is also good opportunity for everyone to place your own options on MPEx. CoinBr users are welcome to inquiry via email, PM or irc, we can create options for you manually. Basic information.

So you are saying that the smartest Romanian on the planet, aka spammer Mircea Popescu, managed to write a "trading" bot, that lost another pile of BTC while trading options on the exchange he named after himself? Talk about vanity... LOL!

I think you guys need to give this pompous sociopath and narcissist another 10 000 BTC, so he can rip you off for the third time.
But... maybe Mircea Popescu dumb bot gets lucky this time? You never know.
Will greed and stupidity prevail?

Another wild month with price instability causing 36% EDIT: 23.5% (my mistake) loss to bondholders. MPOE statement.

The commentary mentions MPOE pricing model was now improved, and says:

As the sales of CoinBr.MPBPT-O May were weak so far, we have preliminary agreement with other parties to jointly buy May bonds. If they don't succeed, CoinBr.MPBPT-O shareholders will be refunded by 0.1 BTC per share on Monday.

That's correct EskimoBob. Please look at the whole sentence however, I mentioned that.

"MPOE does own bitcoin in the form of bondholders covering the losses".

Overall returns have being heavily negative. I'm not putting any coins in mpoe bonds.

Peter, getting acquainted with the elementary terminology is a must
Who ever wrote that https://bitcointalksearch.org/topic/m.782987 needs to do the same. LOL.

Problem is, MPOE owns NOTHING. BTC is borrowed from you with no obligation to return the principal nor interest earned. Basically you are the one who wrote all those cheap Calls while bot was playing with your BTC.

March 2013 MtGox BTC:USD market looked like this:


If bot wrote a Put option, you did OK because most of those probably never made any money for the buyers while writer keeps the premium.
If bot was writing Calls, most of those where "in the money" in matter of days or even hours and you basically sold your BTC at strike+premium-bot fee.

naked = not owning the underlying instrument.

In this case, MPOE does own bitcoin in the form of bondholders covering the losses.

What is naked? Maybe I just don't understand what you mean by naked?

They are naked but are covered by the bond holders, which is in BTC, so not naked?

I am not sure why you are having such a hard time understanding what is going on here? The people with btc buy the bonds to fund the bot's trading. If the bot makes money, then a portion of that is payed back with the principle to the bondholders (IIUC, the rest of the profit goes to MP?). If the bot loses money, then the bondholders get back less money than they paid in, like last month when they got back 0.77 btc for each 1.0 btc they put in.

Which securities is it you believe options are being sold on?

let me put you back to your misery...
If you do not hold the underlying _security_ while you sell a call option, you have sold a NAKED call. Period.

I'll put you out of your misery.

The calls and puts aren't naked - they're covered by the bond-holders money (with MP covering the rest when there's not enough raised from bondholders).  I'm puzzled what you thought the bonds were being sold for if the cash wasn't being used to cover the options - to give money away for free?. 

All settlements are in BTC - so BTC can cover both sides of the trade.

That's one question and statement, which, ironically, contains your answer.

2 simple questions:
1) Is this bot writing naked calls
2) If bot lost money, YOU (bond holder) loose your invested principal and promised %?

If you could find the time to release a proper report for your ART scamsset that'd be great. Other mispreoccupations, misunderstandings and misdirections can take a second seat to "figuring out how to use accounting software" etc.

If bot lost money, YOU (bond holder) loose your invested principal and promised %?
Is this bot writing naked calls?

Happened earlier today in #bitcoin-assets (unrelated conversations removed):

All bitcoin investing requires a healthy amount of trust and risk.

There does seem to be an awful lot of "hope" and "trust" in this, um, scheme.

MP has said publicly that the bot hasn't been changed.  Who knows though, I doubt he's relishing another 23k hit.

The way things are headed (with the exchange rate) it looks like our bonds could possibly take another 30% haircut this month.

Hopefully, there are some radical adjustments being made to the bot's volatility pricing component.

That is not disclosed.


Entirely up to you to establish, all of this.

@MPOE-PR,

Your linked document included this intriguing statement ...


Correct me if I am wrong, but the MPOE bond holders cover the risk of the MOPE option pricing bot. As the theory of option pricing is well understood, I would like to know how the bot's volatility component is determined? I assume that the algorithm learns from the variation of the recent time series.

So what is the likelihood that the MPOE option pricing bot is still under pricing with respect the chances for another 3x run this month. As of seven days into this month of April, the USD/BTC price has close to doubled already.

If these "most people" trade MPOE options, then yes, it's true. My own personal investment was on both sides - both bonds and call options, and together I came out with some profit.

As to why the loss is unlikely or not. Because the bonds cover BTC/USD options, it is clear there is a loss when the price shows big volatility(and options profit). In March price went up more than 3x, beyond even highest 75$ strike offered then. It's up to investors to assess likelihood of something like this to happen again.

BTW, as everyone can write options on MPEx, we're pondering some diversification to not rely solely on MPOE's own trading bot, but add other implementation(s) as well that may be better tuned to limit investors' exposure. If this succeeds, will be properly announced when next batch of MPBPT is issued. But one needs also to consider that biggest exposure - 68k BTC - was provided by Mircea Popescu, of which he admitted 15k loss. Competing traders won't have this last resort backing.

Be careful, most people who are answering and giving you advice in this thread are making money when you lose money.

I imagine it will end up being higher this month, and certainly next month.

Does anyone else think that the MPOR should be substantially higher, given the big March loss?

Or rather, why is a repeat of that loss unlikely if that's the case?

April bond overview:
2028 MPBPT-E shares sold = 202.8 BTC investment made as follows:

Bond 1
Desired premium : 2.9 %
Amount:117 BTC

Bond 2
Desired premium : 4.69 %
Amount:85.8 BTC (plus 14.2 BTC CoinBr own investment, total 100BTC)

Same investment strategy as March.

The prospect was updated to more clearly reflect possible gain/loss. MPBPT-O May will be launched in few days.

Information doesn't rust. Older is usually better, since it had time to be debugged.

If you're hitting the paywall it just means you've done a lot of reading on the site. You get more free loads each week, or else you can buy some credits.

In this case however you're not losing anything, the comment is an integral English translation of the article, which is written in Romanian.

I see some old information in the comments at http://polimedia.us/trilema/2012/sa-ne-jucam-de-a-investitiile-n-bitcoini/#comment-78745 , and I get "... Paid Content This article is available for a fee. ...".

The entire thing was originally announced here. It is also found in the S.MPOE contract. What are you blocked from?

It's a bet that more options traders will bet incorrectly than the bot that writes them.

As I am currently blocked from accessing the free financial results for the bonds that I invested in, can you describe the situation that caused the MPOE bonds for March 2013 to suffer a 23% loss?

I suppose my anxiety with regard to future investment in MPOE bonds has to do with my lack of understanding as to exactly how MPOE uses the bond money to offset the trading risk of MPOE options, and what is the nature of the gamble that distinguishes MPOE bonds from conventional financial instruments of the same category.

My understanding was that the August 2012 loss was due to insider trading. What was the cause of the March 2013 loss? If it was simply the rapid growth of bitcoins, then is it true that MPOE bond is a bet against bitcoin volatility? That would not seem to be a good bet in the current situation obviously.

March results are here: http://polimedia.us/trilema/2013/mpoe-march-2013-statement/ Yes the blog us usually paid, but this post seems to be free.

You mean MP's blog?

Is it true that we have to pay to see the financial results for the bonds we invested in?

Sadly, the rocket growth of bitcoin took its toll from MPOE lenders: they lost over 23% on March bonds.

Only consolation can be if you bought some MPOE call options on CoinBr, all of them were exceptionally profitable.

Update: MPBPT-O liquidated at 0.07679501 per share. Examples in description will be updated to more clearly inform investors that loss is possible.

         Approves.


http://en.wikipedia.org/wiki/John_Forbes_Nash,_Jr.

I just had a proper look at the bonds list.

Here's the list:


    198xX3n8ov4ejgEsWjt3SpPRkDuieL3EHA 120.00000888
    1dNhiuBxKFjkxi5uWYhKzyy3rr65nMkDo 100.00000888
    1D7YtrxnyK3ug3Rvp9jX66T8kVzWww9Jr8 4478.46233504
    1NTfLJi1AZgzeXNHF5Gx1sAmRj6RBE7qxe 100.00000888
    1Pk9FAH7dCGBZ1mw5HbU9AgAvYhrQnFZFp 100.00000888
    1Mn65Q9Xm6NBoPdF8ppS3AzgRLt92ZKtTq 100.00000888
    16yqE5GW2iLnXvCX3SHe6r5UbRFAuARond 2`157.00762056

The last one is the one that was cut off - so that one must have bid 4.8% too.  We know that's the one that was cut off for a few reasons:

1.  I'm pretty sure the list is done from lowest to highest requested rate.
2.  We know none of the others were the cut-off point (all the ones ending in 888 obviously got full allocation and the 4467.xx one submitted exactly same amount previous month so clearly didn't get cut off).

If we then look at January list we see:

198xX3n8ov4ejgEsWjt3SpPRkDuieL3EHA 120.00000888
1D7YtrxnyK3ug3Rvp9jX66T8kVzWww9Jr8 4`478.46233504
1Mn65Q9Xm6NBoPdF8ppS3AzgRLt92ZKtTq 100.00000888
16yqE5GW2iLnXvCX3SHe6r5UbRFAuARond 2`261.23910617
1swAzHw1zTWqoi5184VinvUxLWnBskPVW 3`708.33297766
1CqQiHmp2T3TWXZx3J7yueDxH5rVnZ9A94 1`726.89016169
1A2hqHVSUERAT3t1yJ7ggYCQccvH6pZGZm 1`904.91150845

Notice that the one that was cut-off this month occurs before the last three larger investors - indicating (if I'm correct about hte lsit being in requested-rate order) that he asked for less than 3 of the other 4 large investors (who presumably invested again this month but didn't have their funds used).  Whilst it's possible he copied your rate it seems highly unlikely that a regular investor would change to exactly same rate as a small investor (changing to 1 satoshi less is always better).  I think it's just coincidence that he picked same rate as you - a round number just below the expected average.

IF 3 largish investors missed out in Feb there has to be a good chance they'll bid lower this month (or that at least 2 will - it's entirely possible the last one who bid 9.99 in Jan in a 2nd bid from someone, equally it could be someone who's fairly risk-averse and doesn't want their funds used unless the potential return is high).

March bond overview:
2046 MPBPT-O shares sold = 204.6 BTC investment made as follows:

Bond 1
Desired premium : 2.9 %
Amount:117.1 BTC

Bond 2
Desired premium : 4.69 %
Amount:87.5 BTC (plus 12.5 BTC CoinBr own investment, total 100BTC)

If only first bond gets used, CoinBr own investment will be excluded from dividend payment and the result will be computed for all shares:
(117.1 + bond 1 net gain + 87.5)/204.6 BTC. That would mean over 1.6% MPBPT net result in case MPBOR ends up at 2.9%. But as thousands of MPOE options sold already and there are strong expectations both bullish and bearish that both support option trade, it's unlikely for this worst case to happen. (Of course, there's also the worst worst case MPOE will lose as a whole, but that won't be affected much by our desired premiums).

We had seen MPBOR for previous months consistently end up in the 4.9-9.9% range (please note that MPBOR can be different than net result - like November MPBOR was 9.9%, but net result was a loss), so decided going just a notch lower is pretty safe. Looks like we did indeed risk our bond being unused, although without MPOE revealing the distribution it's hard to tell. We'll heed this warning.

I am not trying to get into conspiration theories. Just thinking maybe we inadvertently provided other bondholders a number to latch on.

The conspiracy theory breaks down as the information would only be useful IF the people using it could predict what demand for bonds would be.  Setting it at 4.8% if demand was for a higher quantity would be potentially giving up on cash, similarly if demand was lower then they wouldn't get anything.  Though it is a bit of a coincidence that it ended on exactly that - either yours was highest bond paid or someone else DID choose 4.8%.  It makes no sense for someone to pick 4.8% because you did - 4.799% makes far more sense.

I'm a bit puzzled why you picked 4.8% anyway.  Are you really SURE that if the final rate ended up at 4.7% your investors would prefer to get nothing than risk their capital?  Because that's what setting a rate of 4.8% means - that you'd rather not invest than take any lower.

I'd have thought you should just be setting your rate at somewhere around 2% - so investors funds get used any time it'll cover your premium + the max 1% selling fee.

It's possible that nobody else put up at 4.8%.

It just STOPPED at 4.8%, because that's how much coins MPOE needed this month.

That doesn't mean anyone else has put it at 4.8%, nor anyone else listened to you..

What were the odds for exactly this to happen,considering that in the past most bondholders went somewhere between 4.9 - 5%, not 4.8? I think it was certainly something for me to comment on. And what were the odds of other bondholders watching this thread and getting influenced, no magic involved?

The coins needed stopped at your 100 BTC @ 4.8%. The people who chose 4.9% didn't get their coins used. People didn't magically decide to copy your interest rate, it just stopped there. If MPOE needed some more bitcoins then the rate will be 4.9% or 5% or whatever.

You got lucky cause if you set it any bit higher you'd get 0% returns.

Anyway, not a good sign if you don't even comprehend how it works..

Of course, but of these 7155.47 BTC only 100 was from MPBPT-E. There were plenty of others that could have decided to request any other interest rate, not exactly 4.8%. Quite a coincidence, don't you think?

Doubtful.  The total exposure was MUCH less this month, so the higher interest rates never triggered.

7`155.47 BTC max exposure this month vs 60`807.41 BTC max last month.

Very interesting how February interest rate unfolded, it is possible market reacted to our announcement to set our request to 4.8%, despite MPBPT-E was among smallest players. So this time we will announce it only after bond will be bought.

At the moment 178.2 BTC was raised in MPBPT-O for March bonds, bid still open till tomorrow evening.

added few ","
Not really. I guess you have no idea who popescu really is

This post makes no sense and is mostly off-topic?

Pervert and a woman beater, mircea popescu, needs coin to finance his options bazaar.
He has the required funds (or is he just bragging?), but he is so afraid of the risk, he is actually willing to pay absurdly high rates to third party and use their money instead.
I guess this shit must be riskier than you two scumbags from mpex care to admit. If it was all so safe and sound, why borrow if you have the coin?
PS! PR-fluff please, sing that stupid "he has better investments" bullshit song to your pervert master.

I think you are spot-on with the 2nd paragraph: there was a 25% floater in Dec iirc, then it got removed and there was none in Jan.

Yeah maybe saying it was "gaming" it wasn't the most accurate terminology.  More accurately, perhaps, I was surprised to see that none of the big investors were taking a pretty simple (and cheap) step to ensure they left no cash on the table if capital requirements weren't met (without resort to MP himself).

If the floater is a small percentage of invested capital then the loss is so small when it isn't used (less than you'd immediately think - as the cost is offset to an extent by not paying losses on it if there's a losing month) that capital requirements only need to exceed total offered funds once every few years.  Of course if multiple investors start doing it then we get a second-level of gaming - where some could risk NOT doing it and rely on others actually doing it to get the benefits without the small cost.

@Deprived I see now what you mean. Sure, for those months where capital requirements exceed total bonds posted it pays to have a high floater and ensure you soak up all available profit (notice that in no case can the bonds make more than what MPOE makes), with the drawback that when capital requirements do not exceed total bonds posted, that high floater makes nothing.

I wouldn't call this "gaming" it though, I would call it working as intended. Capital requirements should not exceed total bonds posted, and if they do interests should be giving a clear signal that more BTC is needed.

No, it was discontinued in August, effective September.


A cap could be introduced again in the future, of course, but currently it's not being entertained.

Lets take your example where there's 3 guys A,B and C all putting in 5k.

At the moment (i.e. not doing what I propose) their bids would have been:

A = 5000 @ X
B = 5000 @ Y
C = 5000 @ Z

Where X,Y and Z represent whatever values they otherwise believe are best for them to bid.  I'd NEVER suggest bidding at 0% - as the investment is NOT risk-free.  What X,Y and Z are (or should be) is a different discussion - but in general it should be the lowest rate at which you'd prefer your capital to be risked rather than unused.

If A was to do this on his own then instead of bidding 5000 @ X he'd make 2 bids:

4900 @ X
100 @ 500% (or any rate large enough to ensure grabbing all profits)

If the demand for capital doesn't exceed available bond capital then only  4900 of his capital would be used and his profit (or loss) would be 98% of what he'd have got had he just bid all 5000 @ X.  So the WORST outcome of this scenario is losing 2% of profits.

If demand for capital exceeds available bond capital then the bonds get ALL the capital.  For this to be profitable for A, the gains when insufficient capital is offered need to exceed the 2% of profits he loses when sufficient capital is offered.

But now consider if A, B and C collude to a very limited extent - by combining to make the 100 bid.  Then the bids look like:

A = 4966 @ X
B = 4966 @ Y
C = 4966 @ Z

(A+B+C) 100 @ 400%

Each of them now only has to throw in 33.3333 BTC for the high bid - ensuring they all get the lot if insufficient capital is offered.  That only costs each of them under 1% of profits when sufficient capital is offered in return for guaranteeing a scoop when when there's a shortfall.  Does the benefit from this more than cover that?  Well take a look at the last 2 months and you tell me?  Remember - I suggested this BEFORE this month.  How would the real equivalents of A,B and C have done this month had they done something like this?  How many months of giving up under 1% (or 2% if done solo) of profits does that cover?

Mircea Popescu as creditor of last instance used to set maximal rate and I don't remember him officially saying he discontinued that forever. So if someone requests insane rate like 1000% I guess he can step in and set the cap.

Let's see, how would that work? Guy A with 5000 BTC, guy B with 5000 BTC, guy C with 5000 BTC. Bonds structure:

4900 BTC @ 0%
4900 BTC @ 0%
4900 BTC @ 0%
100 BTC @ 5%
100 BTC @ 10%
100 BTC @ 15%

Now f(BTC) = % does something like this: (0 , 14700] -> 0%; (14701, 14800] -> 5%; (14801, 14900] -> 10%; (14901, inf) -> 15%. That make any sense to you?


I'm not so sure it can be gamed at all, but if you don't feel like explaining it theoretically you can always do a demonstration I guess.

What I can't work out is what the large investors are doing.

I mean if someone is putting thousands of BTC in (which some are) then how hard is to figure out that rather than put it all in at X% (where X% is the lowest rate they'd prefer to risk at rather than not bear the risk) they should put all except 100 BTC in at X% and the last 100 BTX at 100% or 1000% or whatever - to guarantee getting the whole pot when there's insufficient capital offered for the rate to be capped.

As 100 becomes a smaller pecentage of their total committed capital they need a smaller chance of capital being exhausted for this to be profitable.  If they know other investors then this 100 BTC max-rate block could be privately shared between them reducing the cost to them of ensuring a scoop (where insufficent capital is offered) even further.

That's why I was surprised at absolutely no cap on rate - as when one individual can submit different bids it's very easy to game (yet noone seems to have bothered doing it).

Hire smoothie 

Another opinion can be that interest rate currently tends to increase over time because demand for options grows faster than capital provided by bondholders. But it's no clear trend, too... LOL, maybe I should hire a salesman to create some hype instead Anyone?

So this high January month should be viewed as an outlier, with earlier months' returns being more probable, unless something unexpected happens, in which case nobody knows what the result will be.

Seems pretty unlikely.


On the balance of things kinda looks like somebody (the puts guy) was trying to momentum-trade. The trend reversed suddenly and they had to cover towards the end of the day at a ~15ish % loss. Had the trend continued they might have made some pretty decent bank. There was another large player paying ~5% to insure ~30k BTC via calls.


Very true.

January was looking like a boring month, until BTCUSD jumped up. That would likely adversely affect MPOE results, but such risk is mostly calculated in and it's likely the rate would stay in 4-5% territory. Then on Wednesday night serious whale action (over 10k BTC) on MPEx occurred - commentary. What was the exact intent is unclear, but the scheme seems to have failed and the money has stayed with MPOE, while also simultaneously raising the MPBOR. So... nobody knows what happens next month, the situation can change in matter of hours.

With returns so high, it must be a ponzi

Wow, that turned out pretty nice. I wonder if next month will be as good?

MPOE announced January results. It ended up in profit, that means bondholders will receive full bond offered rate for this month: 9.99%. Thus we are pleased to announce every share of CoinBr.MPBPT-O will be liquidated at a price of 0.10999 in few hours.

Due to technical reasons, asset will be invisible during this time.

If you plan to reinvest in February, CoinBr.MPBPT-E February is staying open till tomorrow - Saturday evening (UTC). After this deadline, you may have to buy at market (presumably higher) rate, or wait for March offering.

Noticed a few trades of CoinBr.MPBPT-O at 0.12 . Would like to comment on it, since it seems grossly overvalued compared to the profit expectation. From the past performance, most likely profit from MPOE bonds is around 5%. Thus, CoinBr.MPBPT-O would liquidate at 0.105/share in the end of January and buying at 0.12 may result in a net loss.

It's not really so complicated, one has to just remember we will be offering every month fresh new MPBPT shares with prices under or at 0.101 . So when thinking about buying price, it's necessary to take only one month's expected profit into account, not anything further than that.

While the January bonds are sold and are busy covering MPOE options, window for funding February bonds opens - the CoinBr.MPBPT-E asset on BitFunder.

First round of CoinBr.MPBPT-O has shown that rewarding early buyers works, so it's offered again - first moment buyers will get best price! Check the order book.

Price in December was stable, closing at nice 13.37 USD/BTC and that brought solid profit both to bondholders - 4.99% and shareholders. December MPOE statement.

Only approx. 48 hours left to closing of the January offer! Afterwards, you will be able to buy CoinBr.MPBPT-O January 2013 shares only if someone else will be willing to part with them

Opening of CoinBr.MPBPT-E for February 2013 is scheduled on January 1.

Promotional offer sold off!  

So something like "last month's effective rate"? That may work.

As we are going to be only a small fish so far, we  won't do any elaborate strategies. Just set the rate conservatively, if the deadline was today, we'd go for 4.8%.

Yes, the minimum is 100, so I guess at least initially he'll be working on one single block.



In fact the optimum strategy for bond purchasers collectively is for someone (not for everyone) to ask high, but for each individually to ask low. On analysis this situation is slightly different both from the prisoner dilemma (where indeed best strategy collectively is for everyone to x but best strategy individually is for each to y) and from the classical disaster of commons (where best strategy for each individually is to take most and give least). Maybe Bitcoin has just created its very own game theory situation.


Actually quite the opposite, if you look at the 1st graph above. Most of the time raised capital covered needs. The exceptions are last month, when needs suddenly spiked up 335%, and April, where needs spiked up 330% (merely this stability in spikes seems remarkable to my eye). The bondholders quickly covered the difference in May, and May-Oct there's no red (ie, creditor of last resort contribution).

What possibly throws you off is the period before Mar 2012, but quoting from the article introducing the bonds:


Bond interest asked was originally limited at 2%, then this limit was raised to 5% on macroeconomic data, and after August proved that presumptions of macroeconomic stability were muchly exaggerated the ceiling was removed completely. It is possible it may come back but from what I gather somewhat unlikely. At any rate for now there's no maximum.

That aside, simply having a 1000% interest as the 100 BTC capper of a 10, 50, 100k BTC train of bonds all charging < 1% is obviously not a winning strategy by itself, as it will make all the BTC if and when the needs exceed capital, but it won't make very much otherwise. The agreement in the Board is that the only optimal strategy and only stable strategy is for each individual player to bid exactly the interest rate that he judges adequate on the market as he knows it. They don't have formal proof for this yet (it has been sought on and off for a little over half a year so far).


Yeah well I saw that, but was curious if anything more elaborate was contemplated.

From the BitFunder asset Description:

Is this what you were looking for?

Was wondering that myself.  Think it depends a bit how many chunks of bonds he can buy (isn't there some minimum block?) and what he knows about other people's bidding strategies.

Game-theory wise it's almost a classic Prisoner's Dilemma scenario - where optimum strategy for bond purchasers collectively is if EVERYONE bids very high but the optimum for any individual prospective investor is to bid the lowest rate they're willing to accept.

One thing's for sure - as a good portion of the time (including last month) the raised capital didn't cover needed capital there needs to be ONE block of bonds from someone asking whatever the maximum allowable rate is.  Were I investing in this, and if I knew others who were, then I'd be looking to collectively fund a bid at 100%, 1000% or whatever the max allowed is - so if all funds are needed it's guaranteed bonds get all of any profits.

If this offering ends up just tiny then really it should probably bid very low (like 2% or something to cover the 1% markup plus trade fees) - and let the big boys bid the rate up.

Since MPOE bonds contain user serviceable parts (the interest rate), any word on what strategy you will be using?

MP released historical data for the bonds that made me realize spreadsheet published by me was wrong for October 2012. Fixed & added data for January and February.

If 007 were named MPOE, after the self introduction of 007, the bad guy would  have already laughed to death and it would be the End of the movie.

It is meant that there is a cooperation - CoinBr is the "issuer" or operator, Bitfunder provides the trade platform. So the MPBPT can be bought only on bitfunder.com.

Graphs!





Lots of words too. MPOE bonds historical data.

Awesome idea.  Love it.

Cool - so there's no fixed mark up: you'll charge whatever you think the market will bear.  That's fine - and a perfectly sensible and transparent way to do it.

No complicated calculation is involved, it stems directly from the market price - if you buy 1BTC (10 MPBPT shares) worth of bonds quickly, you will pay 0.95 BTC + small bitfunder fee. If you wait till only shares priced @ 0.101 BTC are available, you will have to pay 1.0101BTC - and that 0.0101BTC is exactly the margin. It may be slightly less, depending on your volume on bitfunder.

Then, in the end of January, if MPOE breaks exactly even, you will get 1BTC back.

So what's your own cut on it?  i.e. if I buy 1 BTC worth of bonds and MPOE-O breaks exactly even, how much do I get back?

Your post mentions trader margin (which I assume to mean your markup) but doesn't say what that is (if fixed) or how it's calculated (if variable).

Other than that seems a sound idea.  Anyone investing needs to read up on how that capital is used (and profits calulcated) before investing - so a link to that may have been a good idea (there's nothing dodgy about it - it's just not what a lot of investors will be used to, as it actually makes sense).

This is actually a good idea.

BitFunder and CoinBr have launched exclusive offering for one of consistently most profitable bitcoin investments, the MPOE Bonds. To accomodate the nature of this underlying investment, every month the assets will go through three phases:

1. Fundraising
Bond shares will be offered at fixed price of (bond nominal price)+(trader margin). In the end of this phase, initial offer will be withdrawn and raised funds so far will be used to buy MPOE bonds.
2. Free trade
Further trade will be possible only with shares that were bought in step 1.
3. Liquidation
Liquidation process will mirror the liquidation of original bonds, the principal +yield or -loss will be converted to bitcoins. You will be able to invest into other asset for the next month. Between liquidation of a asset for one month and ending of fundraising for next month will be almost 24 hour grace period so you can invest immediately. This short perion is given by original MPOE rules. We are considering the best way for automatically carrying the investment over to the next month , it is likely it will be solved before February offering comes.

The details and dates of these phases are in each asset's description.

CoinBr.MPBPT-O will invest to MPOE bonds for January, March,May, etc..
CoinBr.MPBPT-E will invest to MPOE bonds for February,April,June, etc..