Just-Dice relaunched in December of last year and very quickly attracted almost all the CLAMs into its bankroll. After a month of operation Just-Dice had around 70% of all the CLAMs that have ever moved in its wallet. It is clearly bad for a coin that is meant to be decentralised to have a single entity (no matter how trustworthy) being in control of more than 50% of the staking weight. It makes 51% attacks easy to carry out. And even if the controlling entity is trustworthy, the way that proof of stake works means that the wallet with the >51% of staking weight tends to orphan a disproportionate number of the blocks staked by the rest of the network, encouraging the rest of the network to switch to the >51% side.
On January 19th
I added the "offsite investing" feature, in an attempt to get the big investors to move the majority of their coins off of Just-Dice into their own local wallet. While the feature worked perfectly from a technical point of view, it was a spectacular failure in terms of achieving its goal:
12:43:35 INFO: 321,277 CLAM were dug up and 427,208 CLAM were staked for a total of 748,484 CLAM
12:43:35 INFO: Just-Dice's onsite bankroll of 557,707 CLAM represents 74.51% of that amount
12:43:35 INFO: if all the distributed CLAMs were dug up, the total money supply would be 15,201,609 CLAM
12:43:35 INFO: the total bankroll of 27,095,023 CLAM is made up of 557,707 CLAM onsite and 26,537,316 CLAM offsite
12:43:35 INFO: the average multiplier (total / onsite) is 48.58x
In the 5 months that offsite investing have been available JD's share of the active CLAMs has risen from 70% to almost 75%.
What seems to have happened is that gamblers are using the "/offsite max" command to gamble with their coins with a positive expectation. This dilutes the bankroll, and forces the more conservative investors to also risk more than that would want to in order to maintain a worthwhile share of the site's profits.
I've received many complaints from investors saying that 100x is too much and that it should be reduced (complaint 'a'). I've also received requests from people wanting to be able to benefit from JD's staking without the risk of being involved in the bankroll (complaint 'b'). I've come up with an idea that should address both of these issues.
Currently JD's maximum profit is 0.5% of the total bankroll (onsite + offsite). That means that investors are risking between 0.5% and 50% of their onsite coins to a player who is making max-profit bets. (0.5% if they have no offsite investment and 50% if they have the maximum offsite investment). Investors basically have a range from "half a Kelly" to "50 Kellys". The complaints are (a) "50 Kellys is too much - it dilutes the sensible investors" and (b) "half a Kelly is too much - I just want to stake".
My idea is to
reduce the maximum profit to just 0.1% of the total bankroll. Then investors are risking between 0.1% and 10% of their onsite coins per roll. It changes the investor range from "tenth of a Kelly" to "10 Kellys". That should address both complaints. A tenth of a Kelly is incredibly safe, and 10 Kellys while dangerous is much less diluting than the current 50 Kelly maximum.
What do you think about that idea? Do you have any better idea?
Edit: some feedback from the chat:
13:21:29 (1122749)
dooglus, idk, changing numbers will still not do much, but the 0.1xkelly is cool. hmm maybe theres enought sensible investor that averages with the risky investors? (still think kelly does not work here)
13:21:49 (301465) dooglus you scared me. i already thought you want to take away offsite investment. but your proposal is fine i think. It only lowers the risk of huge wins eating away the house.
13:22:20 (1010) <@v1rtu0so> I am going to write up my response to this tonight I believe. Thanks for the heads up Dooglus!
13:25:10 (301465) max profit would be 28,191 clams then
13:25:14 (301465) way enough i think
13:27:57 (605159) dooglus making 10x kelly when people have lost on 50x kelly is that fair?
13:31:19 (1009018) <@TigerTatas> As a gambler.. I'd kind of like to still have the ability to shoot for 100k+ wins