Topic: GLBSE IPO Handling and Interaccount Transfers Discussion Thread. - page 3. (Read 5795 times)

Even if he did implement special short selling support on the exchange, how would you protect against me just approaching a large asset holder OTC on IRC, borrowing his shares, and then selling them all? It's effectively indistinguishable from a regular sale.

If you are going to implement the shorting of shares on the exchange, please allow asset issuers enough time to raise funds in order to combat short attacks by traders looking to profit from crashing assets.  Any asset without a healthy amount of buy orders would be open to an immediate plunge in value by manipulators looking to make a quick Bitcoin.  I would also like to see high fees on open shorts (at least in the beginning, of something like 0.5% per 24 hours) to encourage shorts to cover their positions at some point & balance the market.  In addition to that, I would like to see a limit on the short % of an asset's floating shares and healthy margin requirements.

*Being an asset issuer, my opinion is obviously biased.  My goal is to protect shareholders on the GLBSE and lend my opinion to be taken into consideration in molding the exchange for everyone's benefit.  Please do not attack me for this.

We can always add the option to short shares, and offer your own shares to be lent out for shorting, and get a small payment.

We'll be adding specific functionality to allow Oz.AUD to function.

I was thinking of putting out an offer to borrow shares to short them. I wouldn't be able to without transfers.

Also, the business model of Oz.AUD (not yet migrated to 2.0) requires transfers to function.

Apart from gifts and OTC trades, I was thinking that GLBSE (or any other future stock exchange) transfers could also be used for "repos" (repurchase agreements) to make low-risk loans. GLBSE securities would effectively be used as collateral for a loan, allowing people to borrow for lower interest rates.

This doesn't really affect the fee structure, but it could be interesting if repos started becoming more common.

Seems fair to me - especially for those shares that lack liquidity...

It would be a fee, % of the average (over 5 days) trade price of an asset.

This would mean assets that haven't traded pay no fee.

I agree with copumpkin, in that part of the fee for GLBSE trades is to pay for the market to match it, and if transferring then only 1/2 that fee would be applicable.

So if the trade fee is 0.5% then the transfer fee is 0.25%

Reasonable?

I agree. I think the fee should be less than for a trade. For a regular trade, you're paying the exchange to match you up with a counterparty, whereas here they're just acting as a place to store/track your "ownership certificates". And I wouldn't mind seeing the fees raised, either.

Sounds ok. Though I think the fee for transfer should be less than for a trade.

On that note, I think the fee for trades can be increased. The weak point of GLBSE isn't the fees, it's development/support. If raising the fees can help getting more work done (which I hope it will), I doubt anyone will object. So maybe 1% for trades, 0.5% for transfers?

I agree, except for the part where it's radical. It should have been continuous (allowing maybe 8 decimal places like Bitcoin) from the start, and I don't think it's too late to change that. (Edit: Fees should probably still be in bitcoins. There's no problem with making the trade fees symmetrical in the current system, they can be taken from the buyer's balance based on the trade price.)

Gah, the forum ate my last post:

The difficulty with a percentage on transfers is that transfers are of securities, which aren't arbitrarily divisible. How do you, the site owner, get 0.5% of the 1 share I send to my dog?

You could require paying a fee in bitcoin to transfer shares, but would that be a percentage of last trading price? That might be easy to manipulate. If it's a fixed amount per transfer, that disincentivizes small transfers.

This may be radical, but I think that it might be time to move away from the "discrete" shares/bonds model. It's mostly a historical artifact arising from the fact that there were paper certificates representing ownership of a security, anyway. There could be a few book-keeping gotchas with allowing fractional shares, but not only would it allow a meaningful fee on asset transfers, but it'd also allow us to get rid of the weird asymmetry on trading fees that we see right now.

Edit: I didn't think this through. We probably don't want the exchange to own shares.

If everyone is OK with this option, then this is how we'll go about it.
A transfer fee for asset/share transfers, 0.5% of a 5 day average trade price

Is this acceptable?

Transfers should have a fee.

The fee should be based on the last trading price or initial offering price and should be the normal .5%.

This would solve all of the problems (any sales outside the system) and still getting you guys paid for host the trading and IPO.

I feel this is the simplest solution and accounts for most if not all transfers.

Now now, lets keep this thread on topic, how do we implement asset transfers (transfers, not trades, trades work just fine) in a way that is fair to all?

Great thread

I just want to restate what our support account said, that is that transfers are suspended temporarily, and will be back up in action before the gigavps IPO, which will not in any way be impeded.

Trading (buying/selling shares) is as normal, and has NOT been stopped.

There are NO LIMITATIONS on transfering bitcoin between accounts.

I also want to apologize for the miss-communication and any unease it may have caused.

Many of you are aware that I've been rather busy as of late, and have not had time to keep track of the details of most shares and IPO's as they come onto the market.

I only became aware yesterday that GigaVPS was doing a pre-sale of shares, and not only that but doing everything manually. Clearly this is something that we will have to bake right into GLBSE IPO's, the ability to do pre-sales (so the whole process is transparent and automated).

It's a great idea with many obvious advantage and uses.

As to why would GigaVPS bother to use GLBSE (as opposed to doing everything by hand), we'll I'm sure he's busy making his shareholders profit, it also allows him to take advantage of the voting functionality on GLBSE. The biggest advantage is not to GigaVPS himself, but to his shareholders. Being listed on GLBSE allows his shareholders to cashout into a ready and waiting market that is growing extremely fast.

As was stated, there are legitimate uses for have account to account transfers of assets. We will allow unrestricted transfers between users personal accounts and asset issuer accounts.

The question that still needs to be answered is how to allow transfers of assets, while at the same time being fair to GLBSE.

We would very much like your input on this issue.

Nefario

Perhaps I am stuck thinking "inside the box."  At the very least I think asset transfers should be made public somewhere (maybe a separate "Asset Transfers" page?).  Not even necessarily who got what, but the amount of shares transferred and whether they were transferred to or from the issuer, so shareholders can decide for themselves if that is a red flag.

Because asset transferring has many, many use cases. It's not just a way to trade assets for bitcoins outside the exchange. rdponticelli has given one great example; another one is borrowing assets (useful for shorting) or gifting them; I have an asset I plan which will simply be impossible to issue at all without transfers (I'm keeping it under wraps for now); many other uses which nobody has yet thought of, and mundane stuff like internal bookkeeping.

If gigavps is content with big players who don't care much about liquidity, sure. But if he wants to also deliver to the many people wanting to invest 1 BTC, he is not going to pay them each individually.

+1.

I'm not sure I completely understand the Goat incident but I'm under the impression there were potential security issues, making it too time-critical for this procedure. But there's no excuse to handling the transfer disabling this way.

Because of this, it would be a good idea to offer an official apology for not having followed this procedure.

First off, I am not picking on gigavps.  He has done nothing on these forums to make me think he is anything less than honorable.  I am just saying that if people are offering shares on the GLBSE, they should be traded on the GLBSE and a public record should exist showing the price the shares were traded.  If gigavps wanted to offer private shares that aren't connected to the GLBSE, there is no problem with that and I don't see why he would need to GLBSE to allow asset transfers in order for him to do this.  He could offer a % of his company on the GLBSE and a % of his company outside of the GLBSE.



Perhaps this is a legitimate reason for asset transfers.  I like this idea, but I think allowing ideas such as this opens the door for other asset issuers to engage in less than honorable behavior.  I don't know what abuses have occurred with asset transfers in the past, but it sounds like it has been a problem.



Huh?  I didn't say anything about Bitcoin transfers.  Pretty sure the GLBSE isn't proposing stopping anyone from sending their BTC whenever they want.

This is an excellent reason why asset transfers would be useful. And this great offer could be impossible with the change in TOS. I hope you glbse guys can work it out. Maybe taking fees in transfers is the way to go, as already has been pointed some times, but transferences should be possible.

which of the principles of bitcoin is preventing transfers of bitcoins between addresses?

what about the example you create a company that has a part of the funds coming from other sources and you just need to transfers shares to them?
or simply do not want to hold all your assets in the same account?

let the transfers be visible if you wish, but do not prevent them
and also which principle of bitcoin is it to have 1 central node you must trust that binds them all?

I'd love to see bearer bonds or bearer shares, kind of crypto strings or armored ascii files recognizable by the exchange that would be fully tradeable outside the exchange just like bitcoin. something like a throw away email with strong password used only for an account here, funded with shares or bitcoins and encapsulated for anyone to use. redeemable code for shares would be easier to use but i see no demand for this atm.

What? Because people are free to sell their property however they see fit. This isn't about transferring assets "under the radar" but about simply allowing OTC trades. gigavps is well connected and trusted in the bitcoin community, and he can get people with deep pockets who might otherwise not use glbse interested in his offering. If he decides he wants to appeal to them by offering his bonds to them at a slightly lower rate (I don't think this actually happened, but it has happened elsewhere), that's his prerogative, and glbse doesn't have a mechanism for that. And why should it? An exchange exists for two primary reasons: to pair up buyers with sellers and to act as a trusted third party so that counterparties don't need to trust each other. In gigavps's case, he needs neither of those for his IPO, because he is already well connected and well trusted (so nobody's worried about sending him coins and then receiving shares later).

From that perspective, there's no real reason for gigavps to go through glbse for his initial offering at all. For smaller companies, the IPO listings page might actually get them exposure that they would not otherwise get, and they don't have the unquestioning trust that gigavps has so glbse provides a useful service for them.

Now, I'm not arguing that gigavps should not use glbse at all. Holding shares on an exchange adds liquidity to the shares, which is inherently valuable. The speed at which gigavps's offering sold out suggests people think it's underpriced, which probably means there'll be some pretty active trading of gigamining on glbse, possibly generating even more fees than the initial sale would have (at higher prices).

Note also that these are bonds, and not shares.