(FEEDBACK WANTED) 100% Insured PPT bond (GLBSE)

Bitcoin Oz

hero member

Activity: 686

Merit: 500

Wat

Quote from: nimda on August 10, 2012, 11:05:56 AM

Quote from: ?? on ??

Quote from: nimda on August 09, 2012, 06:23:09 PM

Quote from: Bitcoin Oz on August 09, 2012, 06:12:45 PM

In what universe is a bond selling at 1.55 "100% insured" Huh

Yeah, well, some people prefer semantics over math. An investor in this bond will lose 35% of their initial investment in the event of a pirate default. I say that makes it 65% insured, but the "face value" is initially insured. Yuck. The term "face value" makes me sick.

No offense, but this is how things are done in the real world. The difference is, that in the real world the insurance company leaves "face value" out of the contract.

That's right, for every $100 you pay for car insurance, only $70-80 of it will ever actually see a repair shop. The rest is eaten by the insurance company. I know you might not like it, but that's the reality of it.

Yes, plenty of people think this way. But in the real world, of those extra $20-30, some go to profit and some go to the unlikely, high-damage cases. I pay my insurance $100, and some of that goes to help out the poor guy who got his car totaled. However, if it's not my fault in an accident, I can get the whole car back. If you want to make the analogy, this bond has a 35% deductible. That's ridiculous. Not to reveal personal information, but I don't have a deductible. Just weekly payments. GIPPT works that way; no deductible, just a reduced rate.

Now, find me a few real-world companies who claim "100% insured" and see what their terms say.

Seems like we would be paying an "excess" up front rather than after the accident happens

nimda

hero member

Activity: 784

Merit: 1000

0xFB0D8D1534241423

Quote from: ?? on ??

Quote from: nimda on August 09, 2012, 06:23:09 PM

Quote from: Bitcoin Oz on August 09, 2012, 06:12:45 PM

In what universe is a bond selling at 1.55 "100% insured" Huh

Yeah, well, some people prefer semantics over math. An investor in this bond will lose 35% of their initial investment in the event of a pirate default. I say that makes it 65% insured, but the "face value" is initially insured. Yuck. The term "face value" makes me sick.

No offense, but this is how things are done in the real world. The difference is, that in the real world the insurance company leaves "face value" out of the contract.

That's right, for every $100 you pay for car insurance, only $70-80 of it will ever actually see a repair shop. The rest is eaten by the insurance company. I know you might not like it, but that's the reality of it.

Yes, plenty of people think this way. But in the real world, of those extra $20-30, some go to profit and some go to the unlikely, high-damage cases. I pay my insurance $100, and some of that goes to help out the poor guy who got his car totaled. However, if it's not my fault in an accident, I can get the whole car back. If you want to make the analogy, this bond has a 35% deductible. That's ridiculous. Not to reveal personal information, but I don't have a deductible. Just weekly payments. GIPPT works that way; no deductible, just a reduced rate.

Now, find me a few real-world companies who claim "100% insured" and see what their terms say.

JoelKatz

legendary

Activity: 1596

Merit: 1012

Democracy is vulnerable to a 51% attack.

Quote from: sunnankar on August 10, 2012, 01:22:03 AM

When insurance is issued, a credit default swap (what the hell are you talking about car insurance for?), then the insurer agrees to pay the principal in the event the issuer fails or, in other words, defaults.

Maybe I'm just nit picking your simplification, but a credit default swap isn't really insurance and can be in any amount. It needn't bear any relationship to the principal. One can purchase a $50,000 credit default swap for a $1,000 loan and if the $1,000 isn't paid out, the CDS pays *its* face value, $50,000. They're somewhat more akin to gambling than insurance. (Though you can use them as insurance, of course, if you just happen to have an insurable interest that they match.)

Quote

Therefore, the price of the bond is 1.5ish indicating a .5 premium over the face value. The premium implies the market's valuation of the insurance, risk profile and general interest rate for bitcoins among other factors.

Certainly true. If someone, for example, bundled a CDS with a bond as a form of insurance, the price of the combined instrument would reflect the value of both the bond and the CDS and would tend to be slightly less than the sum of the two values.

sunnankar

legendary

Activity: 1031

Merit: 1000

Quote from: ?? on ??

No offense, but this is how things are done in the real world. The difference is, that in the real world the insurance company leaves "face value" out of the contract.

That's right, for every $100 you pay for car insurance, only $70-80 of it will ever actually see a repair shop. The rest is eaten by the insurance company. I know you might not like it, but that's the reality of it.

Not really usagi as you are conflating two issues: (1) capital at risk and (2) face value of the bond.

Bonds are issued with a face value for the principal and a duration. When the due date, consol bonds are abnormalities, comes then the issuer repays the principal. The price of the bond will trade in the market for a premium or discount depending on several different factors which may include general market conditions such as interest rates, credit worthiness of the issuer, etc.

When insurance is issued, a credit default swap (what the hell are you talking about car insurance for?), then the insurer agrees to pay the principal in the event the issuer fails or, in other words, defaults.

Therefore, the price of the bond is 1.5ish indicating a .5 premium over the face value. The premium implies the market's valuation of the insurance, risk profile and general interest rate for bitcoins among other factors.

This is simple Finance 101 stuff.

nimda

hero member

Activity: 784

Merit: 1000

0xFB0D8D1534241423

Quote from: Bitcoin Oz on August 09, 2012, 06:12:45 PM

In what universe is a bond selling at 1.55 "100% insured" Huh

Yeah, well, some people prefer semantics over math. An investor in this bond will lose 35% of their initial investment in the event of a pirate default. I say that makes it 65% insured, but the "face value" is initially insured. Yuck. The term "face value" makes me sick.

Bitcoin Oz

hero member

Activity: 686

Merit: 500

Wat

In what universe is a bond selling at 1.55 "100% insured" Huh

JoelKatz

legendary

Activity: 1596

Merit: 1012

Democracy is vulnerable to a 51% attack.

Quote from: nimda on August 02, 2012, 10:22:17 PM

It is refundable, however. I can sell the bonds to someone else later on. In fact, I expect a certain amount of liquidity.

Your argument is essentially that it's misleading to say something is "100% insured" when it's possible for people to lose money even if the terms of the insurance are met. I see both sides of this issue. Usually "100% insured" does mean you can't lose money, but there are certainly other cases where "100% insured" doesn't mean that, particularly ones where you "overpay" for the item that's insured.

Quote

News! I am selling bonds for 1 BTC with a face value of 0.001 BTC each. They pay 200% weekly interest and are 100% insured. A buyback can be placed at any time for the face value.

I think those bonds are just overpriced, not misrepresented. You simply wouldn't sell any of those bonds. But surely they're worth more than .001 BTC.

nimda

hero member

Activity: 784

Merit: 1000

0xFB0D8D1534241423

I for one welcome the new competition Grin

nimda

hero member

Activity: 784

Merit: 1000

0xFB0D8D1534241423

Quote from: ?? on ??

Quote from: nimda on August 02, 2012, 09:12:24 PM

Quote from: ?? on ??

Quote from: Shadow383 on August 02, 2012, 06:54:57 PM

My feedback on this would be that I like it, but if you're selling them at 50% above the insured price then they're 66.6% insured, not 100%
Also, I take it your insurance amount will not change with bond prices?

The face value is 1 BTC and that is 100% insured. If you pay .5 BTC for it, it is not 200% insured, you just got a good deal.

But if you pay 1.5 for it, and pirate defaults, then you lose 33%. Surely a bond which can cause a 33% loss of investors' money at any moment is not 100% insured. "Face value" is a worthless term, because bonds almost never cost their face value (even in the real world). It's like saying "I'll give you 200% PPS of 0.5 MH/s!!!11one"

Think of it as a nonrefundable fee to buy insurance. Insurance is not free, never has been.

The Bond will trade a different rates on the open market but the 100% insurance of the face value will not change.

I know these semi technical terms might be tripping you up but they do have meaning. I have expressed what this is correctly.

It is refundable, however. I can sell the bonds to someone else later on. In fact, I expect a certain amount of liquidity.

News! I am selling bonds for 1 BTC with a face value of 0.001 BTC each. They pay 200% weekly interest and are 100% insured. A buyback can be placed at any time for the face value.

mcris444

newbie

Activity: 58

Merit: 0

Lets just say the IPO is at 1.5
As long as pirate doesn't default before 9 weeks of investing, you will be 100% insured. After ~9 weeks, you would have made the .5 that is uninsured.

Personally, I am willing to take that risk.

nimda

hero member

Activity: 784

Merit: 1000

0xFB0D8D1534241423

Quote from: ?? on ??

Quote from: Shadow383 on August 02, 2012, 06:54:57 PM

My feedback on this would be that I like it, but if you're selling them at 50% above the insured price then they're 66.6% insured, not 100%
Also, I take it your insurance amount will not change with bond prices?

The face value is 1 BTC and that is 100% insured. If you pay .5 BTC for it, it is not 200% insured, you just got a good deal.

But if you pay 1.5 for it, and pirate defaults, then you lose 33%. Surely a bond which can cause a 33% loss of investors' money at any moment is not 100% insured. "Face value" is a worthless term, because bonds almost never cost their face value (even in the real world). It's like saying "I'll give you 200% PPS of 0.5 MH/s!!!11one"

stochastic

hero member

Activity: 532

Merit: 500

I think more things need to stay away from Pirate's offering and it is better to put these insured funds into other things to diversify the bitcoin economy.

nimda

hero member

Activity: 784

Merit: 1000

0xFB0D8D1534241423

Quote from: Shadow383 on August 02, 2012, 06:54:57 PM

My feedback on this would be that I like it, but if you're selling them at 50% above the insured price then they're 66.6% insured, not 100%
Also, I take it your insurance amount will not change with bond prices?

Wow! Someone else can do math! Cheesy

Also, boy oh boy the "insured" pirate market has exploded. From 1 to 5 (YARR, GIPPT, Tygrr-something, Hashking's, and the original PPT.X) in what, a few weeks? Shocked

Hey, competition is good. It's just that I don't know if my analysis thread title can fit many more names Tongue

Shadow383

sr. member

Activity: 336

Merit: 250

My feedback on this would be that I like it, but if you're selling them at 50% above the insured price then they're 66.6% insured, not 100%
Also, I take it your insurance amount will not change with bond prices?

DeaDTerra

donator

Activity: 1064

Merit: 1000

Quote from: ?? on ??

Quote from: DeaDTerra on August 02, 2012, 04:53:58 PM

Quote from: ?? on ??

Some corrections as I see them,

YARR only pays 6% (not 7%) a week and I would pay 5.5%

I do not know that Pirate will default in the next few days. I will be placing 1 BTC per bond into Pirate so if he does default it is a massive loss for me. I would not only lose the 1 BTC pirate has but I would also lose the .5 BTC premium and the .5BTC of my own funds to cover. I'm clearly betting pirate will not default.

I will convert TyGrr.Bond-P to this if people have a decent amount. 3 or 4 shares, just sell and rebuy.

Pirate has said he thinks this will last 6 more months and as a Trust account I will not be at risk to have funds pushed out.

I am doing this because I do not like the other insurance options. YARR is backed by bonds and stocks and that is pretty safe but not like solid safe. We do not fully know how much the GLBSE assets will be worth if there is a pirate fail. Other people might know but how many of the bonds and loans and what not are indirectly pirate backed? Seeing the coins in the block chain is really safe IMO.

Now what DeadT is trying to market is just fail and I have talked to him about this. I do not know if he is still going to do it or not. Let us think about what is going on. He will take 100% of the coin you send him and then he will place it in escrow. That means he has 0 BTC left to send to Pirate. Also he needs to make 2.5% somehow so that escrow coins will be invested. How? Well what is the only way right now to make more than 2.5% ? Send the coins to pirate...

That is the problem here.. When you loan out the insurance money to people who then send it to pirate you get massive defaults.

The point of insurance is that you are sure it is there to pay out when you need it.

With this you will be sure 75% is there. You will just have to trust me to get the other 25% With the other bonds you will have questions. With DeadT he is only insuring 5% of it himself the rest is being sent to people who loan Pirate money.

It is just sillyness and honestly is why I am doing this. I'm trying to help out the BTC securities market and make it safer and more sound.

Thanks.

I am pretty sure that, it was not like that our conversation went Goat Wink

I remember that you were very interested in buying a couple of thousand, but ofc that was before vegas ^^
I am going through with it

, I have crunched the number and gone over it several time it works.
Why would I need to make 2.5% with the escrowed money?
Someone buys 1 bonds. That one btc is sent to pirate, another BTC is sent to ImsaGuy. The Pirate payment pays 7% and ImsaGuy pays around 1-2%. Then we pay out 2,5%. What in this calculation is impossible?
Yes I am only personally insuring 5%, the rest is insured by a well known and trustable lender called IneedAuserName

. But he will not have access to the coins used as backing they will be with Imsaguy as mentioned above.

So please stop the slandering Goat it's unnecessary...
//DeaDTerra

Slander?? What is Imsaguy going to do with the borrowed funds to pay off the 2%? We all know he is well known for borrowing coins and sending them to Pirate.

My guess is, and yes its is a guess not a fact, that your insurance money will end up with Pirate.

I'm doing this because people now have an option to know where the insurance money is.

I was going to buy your bonds when I thought the insurance money was going to be stored offline or in the hands of someone I trusted.

I'm not trying to attack you and do with you the best of luck. It might end well for you anyway as I don't think Pirate will default.

Peace

Yes if you would have posted this on my asset page, or sent me a pm or such then I would have been fine with it. But posting it in your own asset to shit talk my asset so people buy yours, now that's not really nice now is it ?
Imsaguy makes a majority of his interest rate from mining, and has a low pirate exposure

Of course they do and I have been clear where they go from the start.

We will see, I have no intention of letting our insured funds reach pirate, I will keep track of them and make sure that all parties, is aware of what's expected and required of them!

Best of luck to you as well, May your investments prosper and Pirate never default xD

//DeaDTerra

DeaDTerra

donator

Activity: 1064

Merit: 1000

Quote from: ?? on ??

Some corrections as I see them,

YARR only pays 6% (not 7%) a week and I would pay 5.5%

I do not know that Pirate will default in the next few days. I will be placing 1 BTC per bond into Pirate so if he does default it is a massive loss for me. I would not only lose the 1 BTC pirate has but I would also lose the .5 BTC premium and the .5BTC of my own funds to cover. I'm clearly betting pirate will not default.

I will convert TyGrr.Bond-P to this if people have a decent amount. 3 or 4 shares, just sell and rebuy.

Pirate has said he thinks this will last 6 more months and as a Trust account I will not be at risk to have funds pushed out.

I am doing this because I do not like the other insurance options. YARR is backed by bonds and stocks and that is pretty safe but not like solid safe. We do not fully know how much the GLBSE assets will be worth if there is a pirate fail. Other people might know but how many of the bonds and loans and what not are indirectly pirate backed? Seeing the coins in the block chain is really safe IMO.

Now what DeadT is trying to market is just fail and I have talked to him about this. I do not know if he is still going to do it or not. Let us think about what is going on. He will take 100% of the coin you send him and then he will place it in escrow. That means he has 0 BTC left to send to Pirate. Also he needs to make 2.5% somehow so that escrow coins will be invested. How? Well what is the only way right now to make more than 2.5% ? Send the coins to pirate...

That is the problem here.. When you loan out the insurance money to people who then send it to pirate you get massive defaults.

The point of insurance is that you are sure it is there to pay out when you need it.

With this you will be sure 75% is there. You will just have to trust me to get the other 25% With the other bonds you will have questions. With DeadT he is only insuring 5% of it himself the rest is being sent to people who loan Pirate money.

It is just sillyness and honestly is why I am doing this. I'm trying to help out the BTC securities market and make it safer and more sound.

Thanks.

I am pretty sure that, it was not like that our conversation went Goat Wink

I remember that you were very interested in buying a couple of thousand, but ofc that was before vegas ^^
I am going through with it

, I have crunched the number and gone over it several time it works.
Why would I need to make 2.5% with the escrowed money?
Someone buys 1 bonds. That one btc is sent to pirate, another BTC is sent to ImsaGuy. The Pirate payment pays 7% and ImsaGuy pays around 1-2%. Then we pay out 2,5%. What in this calculation is impossible?
Yes I am only personally insuring 5%, the rest is insured by a well known and trustable lender called IneedAuserName

. But he will not have access to the coins used as backing they will be with Imsaguy as mentioned above.

So please stop the slandering Goat it's unnecessary...
//DeaDTerra

JoelKatz

legendary

Activity: 1596

Merit: 1012

Democracy is vulnerable to a 51% attack.

Quote from: silverbox on August 02, 2012, 07:02:11 AM

1 to 5.8 is a 480% increase, not a 4800% increase.

I knew from my original "order of magnitude" sanity check that it had to be less than 1,000% but just couldn't find my error. I went over all the calculations several times, but not that last conversion to percentages. It seems so obvious now that you point it out. Thanks.

BinaryMage

hero member

Activity: 560

Merit: 500

Ad astra.

Quote from: silverbox on August 02, 2012, 06:58:56 AM

Quote from: BinaryMage on August 02, 2012, 01:37:30 AM

I'm not so sure I agree with the pricing plan.

YARR pays 1% per day, or 7.214% compounded per week.
This proposed asset would pay 5.5% per week, or a bit over 30% less than YARR.

I suspect both asset issuers are trusted by most of the general population, or at least trusted enough not to hinder purchase of these bonds. Given that, I think the trust difference, if one exists, would have a negligible effect.

YARR's current market price is around ~1.7 BTC. Given that one share of YARR pays the equivalent of 1.31164 shares of this bond, one would conclude that this bond should be priced at around ~1.3 BTC, not ~1.5 to 1.6 BTC.

This is wrong, YARR doesn't pay on Sunday. Its 6.15% (1.01^6) compounded per week.

Blech, my bad. Thanks for pointing that out. I retract my statement.

Best of luck with your venture Goat.

Coinoisseur

sr. member

Activity: 336

Merit: 250

Ah, glad I posted then so you had a chance to make your meaning clear.

mcris444

newbie

Activity: 58

Merit: 0

Quote from: ?? on ??

Quote from: Coinoisseur on August 02, 2012, 12:02:27 PM

Quote from: ?? on ??

Pirate has said he thinks this will last 6 more months and as a Trust account I will not be at risk to have funds pushed out.

Interesting information, you'd probably want to launch this in the next couple of weeks then.

I mean at least 6 more months. He said he can see into the market about 6 months at a time. Also he told me the same about 7 months ago he was sure for 6 months but not sure after that. I'm not saying this will end in 6 months. I'm saying it will at least last for 6 months. I should have picked better words, sorry for that.

What is the process after he decides "market looks bad"?

Coinoisseur

sr. member

Activity: 336

Merit: 250

Quote from: ?? on ??

Pirate has said he thinks this will last 6 more months and as a Trust account I will not be at risk to have funds pushed out.

Interesting information, you'd probably want to launch this in the next couple of weeks then.

bluefirecorp

legendary

Activity: 882

Merit: 1000

When can I invest?

Lobstertorch

newbie

Activity: 49

Merit: 0

Quote from: ribuck on August 02, 2012, 09:13:51 AM

Quote from: JoelKatz on August 02, 2012, 02:28:41 AM

You're betting that there won't be a default before the interest you've accumulated equals the premium that you paid. Depending on how you calculate it, that's between 12 and 20 weeks.

...~~and goat is betting that there will be a pirate default before the accumulated interest equals the premium that you paid~~. Caveat emptor.

edit: OK, I take that back. It's not quite that simple. Goat can structure this to make a profit with or without a pirate default.

Was just about to correct ya then saw your edit xD.

Looks like there would be some demand... I personally will be sticking with the GIPPT because well... 100% insurance. Although being able to view the escrow coins is attractive.

EDIT: mixed feelings about this as well, does this show confidence in pirate or a lack of?

ribuck

donator

Activity: 826

Merit: 1060

Quote from: JoelKatz on August 02, 2012, 02:28:41 AM

You're betting that there won't be a default before the interest you've accumulated equals the premium that you paid. Depending on how you calculate it, that's between 12 and 20 weeks.

...~~and goat is betting that there will be a pirate default before the accumulated interest equals the premium that you paid~~. Caveat emptor.

edit: OK, I take that back. It's not quite that simple. Goat can structure this to make a profit with or without a pirate default.

Energizer

sr. member

Activity: 273

Merit: 250

Please correct me if am wrong: @ 1.5 per bond and 1 BTC insurance, this is 66.6 % insurance. If I decide to invest in an uninsured PPT that pays 7% weekly instead of 5.5% "insured" and save 0.5 BTC per bond on the side. I would then self insure my bonds by 33.3%. I just can not see any huge deference between self insuring "33.3%" vs your insurance of "66.6%". Cause the 33.3% self insurance would grow weekly by adding the 1.5% to it "the 1.5% that will be lost in your insured PPT".

Bottom line, I don't see any great value in any of the current insured PPT including this one you are about to issue. Personally I found that the best thing about YARR is the daily dividends. However I've sold all my YARR shares and decided to switch to self insuring my PPT bonds "I guess that can easily be done by anyone". I would be interested in insured PPT that can introduce a magical formula, one that can not easily achieved through self insurance. For example 90% insurance: 1 Bond = 1 BTC 90% insured. But that is almost imposible to promis starting from day one. The only solution that I think would solve such problem is to engage mining hardware/hashing power in the insurance. For example 1 PPT bond = 1 BTC and insured by 100 MH/s of ASIC.

Frankie

full member

Activity: 206

Merit: 100

Quote from: aq on August 02, 2012, 05:50:34 AM

Goat, selling at 1.6 and buying back at 1 would also be a great option if you know that pirate will default in the next few days.
How do you address this?

On the flip side, if you're eternally optimistic and think that Pirate will pay back all his loans in 2 weeks, it would also be a good sell.

alatus

member

Activity: 73

Merit: 10

Conversion from TYGRR-P would be of high interest! Do You consider it?

silverbox

legendary

Activity: 966

Merit: 1003

Quote from: JoelKatz on August 02, 2012, 02:28:41 AM

Quote from: Frankie on August 01, 2012, 10:13:13 PM

I'm not quite sure how you arrive at 1000%. Should be higher if you count a full 5.5% at "face value," or "only" about 600% if you count it at the sell price (that seems like the more accurate figure to me).

You get .055BTC per bond. At 1.6BTC per bond, that .055BTC buys you .034375 bonds. So if you start a week with one bond in value, you end a week with the value of 1.034375 bonds. There are 52 weeks in a year, and 1.034375^52 = 5.8. So in a year, you go from 1 units to 5.8 units, an increase of 4.8 units. That means the interest rate is 4,800%.

1 to 5.8 is a 480% increase, not a 4800% increase.

silverbox

legendary

Activity: 966

Merit: 1003

Quote from: BinaryMage on August 02, 2012, 01:37:30 AM

I'm not so sure I agree with the pricing plan.

YARR pays 1% per day, or 7.214% compounded per week.
This proposed asset would pay 5.5% per week, or a bit over 30% less than YARR.

I suspect both asset issuers are trusted by most of the general population, or at least trusted enough not to hinder purchase of these bonds. Given that, I think the trust difference, if one exists, would have a negligible effect.

YARR's current market price is around ~1.7 BTC. Given that one share of YARR pays the equivalent of 1.31164 shares of this bond, one would conclude that this bond should be priced at around ~1.3 BTC, not ~1.5 to 1.6 BTC.

This is wrong, YARR doesn't pay on Sunday. Its 6.15% (1.01^6) compounded per week.

sgravina

sr. member

Activity: 451

Merit: 250

Would you make an offer to convert TYGRR.BOND-P to these new bonds.

aq

full member

Activity: 238

Merit: 100

Goat, selling at 1.6 and buying back at 1 would also be a great option if you know that pirate will default in the next few days.
How do you address this?

ciuciu

donator

Activity: 588

Merit: 500

Quote from: ?? on ??

Quote from: farfiman on August 02, 2012, 04:40:56 AM

wrong- he pays 0.055 a week....

My mistake, so it's 0.025 vs 0.055 BTC. And because you can buy about 1.5 Terra bonds for the price of 1 Goat bond, the actual comparison should be 0.0375 vs 0.055 BTC. Seems like Goat is indeed offering a better deal.

Yes, but Goat insures only 1 BTC, at least 0.5 BTC is not covered.

farfiman

legendary

Activity: 1449

Merit: 1001

Quote from: ?? on ??

What advantage has this offer over DeadTerra's GIPPT (https://glbse.com/asset/view/GIPPT)?

- Both are 100% insured
- He pays 2.5%, you pay 1.5% a week,
- His IPO price is 1 BTC, yours is 1.5 BTC
- He puts 100% in escrow, you put 75%

I can't seem to find any reason to go for this proposal instead.

wrong- he pays 0.055 a week....

JoelKatz

legendary

Activity: 1596

Merit: 1012

Democracy is vulnerable to a 51% attack.

Quote from: Frankie on August 01, 2012, 10:13:13 PM

I'm not quite sure how you arrive at 1000%. Should be higher if you count a full 5.5% at "face value," or "only" about 600% if you count it at the sell price (that seems like the more accurate figure to me).

You get .055BTC per bond. At 1.6BTC per bond, that .055BTC buys you .034375 bonds. So if you start a week with one bond in value, you end a week with the value of 1.034375 bonds. There are 52 weeks in a year, and 1.034375^52 = 5.8. So in a year, you go from 1 units to 5.8 units, an increase of 4.8 units. That means the interest rate is ~~4,800%~~480%.

Quote

So it's really more like 60% insured--you take a haircut if default is soon (as I think it may be). But it seems like a relatively attractive product. I don't know why anyone would get YARR if this was available.

I agree. You're betting that there won't be a default (or cessation of operations, or huge interest rate reduction) before the interest you've accumulated equals the premium that you paid. Depending on how you calculate it, that's between 12 and 20 weeks.

ianspain

donator

Activity: 164

Merit: 100

Would be very interested in some of these

dust

hero member

Activity: 840

Merit: 1000

The advantage of Goat's bond is that insurance is much more reliable, as most of the coins are visible and stored offline. Goat also has a more established reputation.

All of usagi's bonds (YARR, CPA and NYAN) would suffer when/if pirate defaults. There is no guarantee he would be able to pay back in full.

1.6 is probably too high though. YARR IPO'ed at 1.2 IIRC which was probably too low.

BinaryMage

hero member

Activity: 560

Merit: 500

Ad astra.

I'm not so sure I agree with the pricing plan.

YARR pays 1% per day, or 7.214% compounded per week.
This proposed asset would pay 5.5% per week, or a bit over 30% less than YARR.

I suspect both asset issuers are trusted by most of the general population, or at least trusted enough not to hinder purchase of these bonds. Given that, I think the trust difference, if one exists, would have a negligible effect.

YARR's current market price is around ~1.7 BTC. Given that one share of YARR pays the equivalent of 1.31164 shares of this bond, one would conclude that this bond should be priced at around ~1.3 BTC, not ~1.5 to 1.6 BTC.

Bitcoin Oz

hero member

Activity: 686

Merit: 500

Wat

I would get a few of these.

Frankie

full member

Activity: 206

Merit: 100

I'm not quite sure how you arrive at 1000%. Should be higher if you count a full 5.5% at "face value," or "only" about 600% if you count it at the sell price (that seems like the more accurate figure to me).

So it's really more like 60% insured--you take a haircut if default is soon (as I think it may be). But it seems like a relatively attractive product. I don't know why anyone would get YARR if this was available.

JoelKatz

legendary

Activity: 1596

Merit: 1012

Democracy is vulnerable to a 51% attack.

Everyone loves 1,000% interest.

El Cabron

vip

Activity: 840

Merit: 1000

The bond would have a face value of 1 BTC.

Assuming Pirate has not defaulted I will buy back the bonds at 1 BTC.

Assuming Pirate has defaulted I will buy back the bonds at 1 BTC.

The fee would be 1.5% interest per week of the face so .055 BTC a week would be paid out.

75% of the insurance money would be either at a public BTC address or in escrow at a public bitcoin address.

The point of this is to know that the "insurance money" is not being invested in pirate or being loaned out to people who lend to pirate or in GLBSE assets that might be helped out by pirate.

If I have 750 BTC in the insurance address then I would only be able to sell 1000 bonds.

If the default with pirate happens 100% will be paid back. Clearly you will have to trust I can come up with the other 25% but at least you know most of the BTC exists in a very very safe form.

I would sell this around 1.5 to 1.6 BTC each. That is less than what YARR is going for. The difference will be that you can see 75% of the insurance money in the block chain and know it will get distributed.

All idea welcome.

Thanks.

Topic: (FEEDBACK WANTED) 100% Insured PPT bond (GLBSE) (Read 4556 times)