Topic: [BTC-TC] Deprived Mining Speculation (DMS) - page 35. (Read 198958 times)

Thanks, that's what I was refering to. (Should have quoted it.)

In theory I agree with you - and if ALL investments were 100% BTC then I'd do that.  Problem is that it's highly unlikely we'll have the option to convert CIPHERMINE.B1 into BTC by then.  Even if we're promised it'll later become liquid it still can't truly be valued at full face value whlst it isn't tradable.  So some discount to its value has to be applied.

Easiest way around it to be totally fair would be to do all redemptions by sending cash plus a portion of CIPHERMINE.B1 - but we still have the problem of very small holdings too low to give even 1 CIPHERMINE.B1.

If I have the option of liquidiating it then yes - I'd give 100% NAV/U.  If I don't have that option then I'd probably have to give cash + some of them and then slightly under NAV/U for tiny holdings.

As you correctly point out - if the contract changes then it MUST be considered as being an effective closure/reopening, so the general rule is that anyone choosing to sell out should get precisely their fair share of NAV/U.  The 99% NAV/U was intended as a means to pay in all cash whilst reflecting the fact that a significant portion of assets weren't actually liquid (assuming I was satisifed there was every intent to honour the bond commitments).  Any time risk is passed to someone else there MUST be a cost associated with it.

EDIT:  Just realised in a previous post I'd referred to paying 99% of NAV/U + some bonds.  That is incorrect - if everything bar the bonds is in cash then one-time redemptions before moving would be at 100% NAV/U (excluding bonds) + bonds.  That much is definite.

Deprived, I really do not understand, why we should only get 99% of NAV/U? It's ok if people want to continue, but the ones who do not should be given the chance to get a fair deal.

The contract is quite explicit in terms of what will happen in unforseen circumstances.

Cease making new investments,
Liquidate investments where possible,
Cease selling new DMS.PURCHASE
Offer redemption at 100% (less any exchange fees) of NAV/U for DMS.PURCHASE and bundles of equal numbers of DMS.MINING and DMS.SELLING where it is possible to do so whilst retaining at least 50 days dividend cover in liquid BTC for the remaining DMS.MINING.


Either way, the fund is closing down. It may reopen on a different exchange, with very similar contract (but not quite the same), it may offer the redemption of Mining and Selling for Mining and Selling on the new exchange. That is all fine with me. You have proceeded with the first three steps, I believe you should with the last one as well. (I have read everything up until now and agree that we wait for the CL coins.)



Disclaimer: I own slightly above 6% of Mining and Selling. I bought the overpriced Mining only after the BTCT announcement of its closure, exactly because of this part of the contract.)

Yes, you are right SELLING dropped more upon the announcement.
Regards MINING, I think one reason could be that a lot of hashing power is supposed to be deployed in October and November. Another reason is that previously MINING price is mainly driven high by the speculation, so now the price decreases with the liquidity together. I still think it will recover once it is re-listed on an exchange with enough liquidity.

If you look at the graph of MINING, you'll see that it was already in strong decline before the BTCT announcement hit. The BTCT announcement mostly hurt the price of SELLING (which dropped to 0.0045 at some point, thanks for that btw!), which has mostly recovered since.

I think that the drop of MINING is more due to people readjusting their view on how things are to be valued than anything to do with the BTCT closure.

Yeah, at this stage if it becomes apparent we won't be able to relist then I'd wipe the order books, announce the split (and explain how I got the numbers), make MINING their full payment and SELLING a partial payment.

If it reaches a stage where relisting looks unlikely then I MAY:

1.  WIpe order books,
2.  Explain how I'd split if the fund closes,
3.  Reopen order books

Then people can make their own call on whether they want to trade based on what they believe the shares are worth if we continue or on what they believe they'll get if we close.

Right now I rate closure as unlikely - so it would do more harm than good for me to give numbers that most likely have no meaning.  But if closure becomes likely I'll definitely reconsider.

Comments on that general approach are definitely welcome - I don't want to distort the market, but nor would I want people buying one or the other of MINING/SELLING if I knew there was a high chance they'd get a lot less back from an imminent closure.  Right now I rate closure as low enough probability that the harm from disclosure outweighs the benefits.

Thanks. That makes sense totally.

Just wonder why DMS.MINING dropped so much. Maybe all people think the split will be beneficial to SELLING? But now it is quite clear relisting is almost decided, so I think the MINING price is a little bit under-priced.   (Admit now I am trying to push the MINING price up. Just a little effort to reduce the lost caused by my confusion, upon which I rushed to buy the MINING and pushed the price to a high level. )

Yes, it doesn't make sense to announce what a split would be before the final decission to close the fund has been made and trading has been locked.

Thanks for the clarification will leave my MINING and SELLING alone and not sell anything.

Right - but you seem confused over what "their amount" is.

As Rannasha pointed out, any closure would be because DMS can't  continue - not because of a vote by SELLING.  Under the contract the option I have (ignoring finding a new manager which obviously isn't practical) is to put up a vote with a proposed split and try to get both MINING and SELLING to agree it.

But if I do that, then I also have to stop paying dividends - as I can't have a 7 day long vote up with proposals that may not even be relevant a week later (if difficulty rises or falls by a lot).  And I can't even propose a split until I know what's happening with CL and CIPHERMINE.B1 - as I don't know how much there is to be split (though in theory I could get around that one by proposing an amount for MINING with SELLING getting the rest).

So at present we end up falling back on the final clause - that I have to decide the split myself.  Because the problem is that if I put up a proposal and it fails there won't be time to do a second one anyway.  So I'd end up having to decide myself - at which point I'd likely go with what I proposed (but was voted down on) anyway.  Which makes the vote pointless - as there's no way to act on (and get approval for) any revision to it.

IF the vote had indiciated most wanted to close then I MAY have considered halting all dividends and putting up a proposal for vote.  But as a clear majority wants to relist it seems rather silly to screw the market up and cause confusion when most likely we'll just be moving anyway.

EDIT: Just to be asolutely clear, no split I proposed or unilaterally imposed would be giving MINING anywhere NEAR 365 days of dividends.  And it won't be susceptible to market manipulation (by someone trying to move the price on low volume) either.  Once we've relisted (if we do) someone feel free to ask me how I was going to do it - and I'll explain it in detail.

Ok, fair enough. So how to split between Selling and Mining remains a secret, right? But anyway, I think most likely it will be relisted, so it does not matter.

In case of a split of the asset funds, the amount that MINING has been assigned would be paid immediately from BTC being held. Since part of the funds are still tied up in Ciphermine bonds, SELLING would only receive their full amount once those have been liquidated. In his post Deprived makes no statements on what "their amount" would be for MINING, only that it would be paid immediately.

Which by the way makes it contradict with the assumption that MINING gets 365 of days of dividend, since Ciphermine makes up ~20% of the funds capital, while 365 days of dividend is close to 90% of the NAV. So there isn't enough BTC to pay MINING in full if they receive 365 dividend days.

But Deprived has clearly said mining would be paid their amount in full immediately.

All of MINING/SELLING would be transferred exactly as they are.

Pairs of MINING/SELLING and PURCHASE would be able to be cashed out before the move (either all in cash or in cash + CIPHERMINE.B1).

PURCHASE may or may not get transferred - depending on what support the new exchange has.  If there's no way to automate transfers then its likely the new PURCHASE would be at a multiple (so 1 PURCHASE might equal 500 MINING + 500 SELLING) to get the manual swap level down to a managable level.  If that happened then all PURCHASE that weren't a multiple of that new value would be transferred over split into MINING + SELLING already (I'd edit the export file from BTC-TC to do it - so new exchange could just import it).

According to the contract, a vote to close under the "Buy Back Terms" paragraph of the contract requires a SELLING majority vote, while MINING doesn't get a vote. I believe that the current vote offers an option between relisting and closure under the terms of the "Unforseen Circumstances" paragraph, where the manager (Deprived) proposes a split, but that won't be the 365*Dividends for MINING split that would've occurred under normal closing circumstances.

Additionally, the current motions are explicitely only advisory, they're meant to poll interest not effect a binding change to the operation of the security.

No.  If DMS was closed now then MINING/SELLING would receive dividends based on market prices.

The 365-day payout to MINING is if SELLING vote to close - which isn't going to happen unless/until difficulty stops rising fast.

I'd rather receive my dividends once in three months and pay additional fee. And for me, fair distribution between S and M is more important than liquidity. But I understand that the reasons you have listed make it practically impossible. So let's hope for relisting.

If this does move to another exchange (which is looking he most likely outcome) can we transfer all shares or only MINING+SELLING pairs?

But in this case, according to your reallocation plan. All MINING holders will choose close, and all SELLING holders will choose relisting, cause otherwise all SELLING holders will lose a lot.

So now voting has no meaning at all, there's only one fair option, that is relisting.

I was too late to grap all those cheap DMS.MINING after your announcement. That means DMS.MINING will get 365 * the daily dividend at the last day, am I right? Without the voting of DMS.SELLING holders?

That means, there's no any reason for DMS.SELLING to have a lower price than the one of the moment when burnside announce the closing.