Topic: [DVC] Really Simple Currency-Backing Bot (Read 393 times)

Here is a really simple - maybe even "simplistic" - currency-backing bot strategy idea:

Suppose you have a currency, lets call it DeVCoin, for example, that you would like to have some value.

Suppose, further, that you have some kind of revenue-generator also, lets say for example a wiki with adsense ads on it. You could call it something like Devtome, for example.

Suppose even further that you know that 200,000,000 of your currency - lets call that 200 million DVC - is entering the market each month.

Finally, let us suppose that there exists an exchange where you can exchange the type of currency the ads bring in for your currency that you would like to make "valuable".

So, okay, each month you need to be prepared to buy 200 million DVC, so that none of the 200 million coins coming onto the market that month will seem "valueless".

Now we plug in the revenue from our ads. For example suppose your ads bring in, after all operating expenses, fifty somethings. Lets call them dollars, denoted with a $ sign.

Now we have a simple bit of arithmetic we can do: we have $50 available and 200 million DVC that need to be capable of being sold, in case someone turns out to want to sell them.

It would be really nice if the exchange used for this let you place offers that do not have a duration at which they auto-expire, so lets assume that once we place an offer it won't go away unless someone buys it all or we cancel whatever is left of it.

So, we place an order to buy 200 million DVC for $50.

Next month, we can simply do the same again. And just keep on doing so each month.

If we are really lucky, or really good at managing/operating our revenue generator, we might even find that over time we have more and more dollars available each month with which to try to buy the 200 million DVC that are entering the market each month. But if not, no worries, whatever offers we can afford to place will just sit there on the exchange year after year, decade after decade, until either someone does take us up on them or we launch another revenue-generator with which our first revenue-generator can team up to try to make, between them, offers high enough that folks do start taking us up on them. (In which case, maybe, not sure if its worth the bother, we could consider cancelling our old single-revenue-generator-based orders and replacing them with dual-revenue-generator-based orders?)

So far of course that seems like a pretty stupid bot, maybe a bit too simplistic to be practical.

So maybe we do need to make it at least a little bit more complicated.

Suppose, for example, that people snap up all our offers as fast as we make them. Would that be a problem? Surely if we had been doing all this from the original launch of our currency that would mean no one else but us actually has any of our currency, we have bought it all as fast as it was minted. Hmm.

Okay, suppose for some reason - even a really stupid reason - we somehow got butterfingers and allowed some of our currency to slip from our grasp. Like, maybe we paid our hosting bill with some or something like that. Oops, that month there was more than the normal 200 million DVC entering the market! There was 200 million plus our hosting bill!

Can we just plug that new/different "how many enter the market" value in as that month's amount entering the market and go on using the same formula? Simply offer our net revenue of the month in dollars for two million plus our hosting bill DVC on the exchange? Would that work?

-MarkM-