Hey everyone, I wanted to provide a few updates on BDD:
Regarding the suggestions that I proposed to Havelock on behalf of shareholders:
- Auto Exchange: I'm still waiting on a status update from Havelock regarding this capability. Last that I heard, they were close, so I'm still hoping to have that up and running before the end of the month, but the ball is in their court on this one. That being said, they've been very helpful so far and I'm very happy that they're looking to implement this for the fund.
- Regarding P/L for SELL/MINE in Account Overview: This one is a no-go. As I suspected, there are too many variables with determining absolute purchase price on the MINE and SELL shares. I know this is a bit of an annoyance to those of you that keep track of P/L via HL's purchase price / current price on the Account Overview page, but you'll just have to do the legwork on this one.
- Updating Account Overview's Digits to 8: This is something that they're looking into - I don't have any specific promise from them to make the change to 8 digits 'past the period' on the account overview page, but it does seem to be something that's on their radar.
- BDD Contingency Plan: As previously stated, in the event of my (extremely unlikely) disappearance or other unplanned absence (hospital stay, car accident, etc.) Havelock will take over the administration of the fund. They have all the details needed to do so and, since the capital are kept on-exchange, all BTC will be available to them.
Overall, I'm very happy with the funds' performance, with nearly 2,500 BDD Pairs distributed on the exchange. I believe that I've answered the community's questions and concerns in a thorough manner and reasonable timeframe as well.
That being said, I do want to broach a subject with shareholders regarding my compensation for running the fund. Currently, there is a 1% premium over NAV/U added onto EXCH shares - this 1% breaks down as follows:
- .4% to Havelock for the exchange fee (like all funds listed on Havelock)
- .6% to the Fund, providing holders of SELL an initial incentive to hold SELL shares. I believe that this somewhat makes up for the lack of possible investment revenue from the funds' capital on hand.
Currently, I'm compensated for running the fund and its communications to the community through a portion of the .4% Havelock exchange fee. This amount isn't disclosed publicly, but suffice to say that Havelock keeps the majority.
I'd like to propose a management fee of 2% on top of the EXCH sales price paid out each Difficulty period. I began this fund with the intention of offering minimal friction to initial purchasers of EXCH - the .4% exchange fee is, again, the price of being listed on an exchange, and the .6% fee is paid back to the fund (SELL in times of increase, MINE in times of decrease). I'd say that shareholders have implicitly approved of this fund their purchase of nearly 2,500 shares of EXCH.
Currently EXCH is NAV/U +1%, this proposal would raise it to NAV/U +3%. This would not affect current holders of MINE or SELL - MINE would still be paid out the exact same amount as promised in the contract. The same goes for holders of SELL - the fund would still receive the exact same .6% premium on sales of EXCH and the dividends from excess capital on hand after a Difficulty Increase.
This would only affect new purchasers of EXCH, notably arbitrageurs who profit off of the market price of MINE and SELL being too high. Those of you that traded in DMS may remember that Deprived charged a management fee of 3%, so this would still be lower than that. Other BTC-denominated ventures such as dooglus' Just-Dice and TAT's ASICMiner passthroughs charge higher fees than this proposed 2% as well (10% on Just-Dice profits; 5% of AM's dividends).
Barring a truly massive increase in network hashpower, it will likely be 6+ months before this Round of BDD is over and I would be able to freely change the contract, so it isn't as if I can just wait a month or so for the next Round to freely update the contract to my preference. Unlike BTCT, there is no formal voting mechanism in place for Havelock - I've considered putting it to a community vote, but that would require accepting votes by email and setting a date for counting votes (as shares are traded between holders, of course). That would also require the community to trust that I wouldn't rig the vote, or to select an independent party to review the votes.
So, I'd really like to hear the community's thoughts on this - I think that it is a fair proposal but I want those participating in BDD to have their say in the matter. I wouldn't make any changes until the next DI, at earliest, and only that soon with (near) unanimous support. I will also be putting out an update to shareholders via Havelock.
It's okay, it just throws me into rush mode trying to get the shares exchanged before the dividend script runs - in this case, I got the shares out to you but the script didn't see it in time for you to get the dividends, hence the push-buyback of one EXCH share for the dividends that should have been paid to you.