Trying to catch up to the discussion. I propose that David and/or J.R. get it into a Google Doc so people can comment on specific parts of the proposal more easily. This discussion is really hard to follow and participate in.
My goal is to build the Mastercoin protocol as quickly and efficiently as I can, while maintain a high quality standard.
This is what I perceive would bring the most benefit to MSC holders.
I would like to accelerate the development and ecosystem and work at ever increasing speed.
I would also like us to burn away our customary budget for the Mastercoin Foundation as quickly as possible, and move that to community control ASAP, in order to remove ourselves as a point of failure.
This is the context in which you should read my reply.
About David's proposalNow, in light of this, and given the project is super early stage and evolving rapidly, I would hate to see us "shackle ourselves" and commit to any specific long term budget. The Dev MSCs are generated at a predictable rate as set in Mastercoin's original 1.0 whitepaper. However, I do not feel there is a dire need to compel us to a specific burn rate. of our funds
We can do a slower burn rate when applicable.
However, if we believe at some point that we want to spend more cash because we have a great opportunity to increase our development momentum, we should be able to do that. The mechanism I suggested for this is
Lending. I want us to be able to ask the market for loans, while keeping future unvested Dev MSC as collatoral for these loans. This is a way to get more funds ready right now, if that is what we all believe will speed up development and ultimately increase MSC value (this should move to a public Proof of Stake vote between MSC holders rather than a board vote ASAP).
Therefore I am against setting this spend limit in stone right now. Also, we need to formalize our decision processes before this anyway. What if we do decide, as David suggests, to "formalize the distribution of "Dev MSC", to mirror the amount of Dev MSC generated each month" ... but a month later decide via a majority or super-majority vote to change this? I don't see a value in shackling our future selves here.
Having a plan is ok, but I would rather see this as a tentative plan always up for changes, rather than a commitment.
I see the "Dev MSCs" as just another part of our pool of funds, totally equivalent to BTC or MSC that we bought. Their rate of generation is arbitrary, and I do not think we should use that as any factor in the formula deciding how to compensate developers, but rather come up with an alternative formula depending on taking market compensation and subtracting some amount (because we assume developers are / will be MSC holders, and thus benefit anyway from MSC increase over time).
What I propose is this:
- We need to pay developers using some predictable formula, especially if we want to bribe them to quit their jobs. The choice of currency that they get paid here doesn't matter, as everything is interchangeable in the Mastercoin universe. Each developer chooses how to divide his bounties / salary among BTC and MSC.
- We can commit / preallocate a certain amount of BTC or MSC (or USD for that matter) for developers who want predictability, for a certain period of time. This is always contingent on their continued performance. We as the nonprofit Mastercoin Foundation do not yet have experience with retaining full time employees, we need to define the process of how such positions are hired, evaluated, and for how long (David might want to lead this definition himself).
FYI one project that I would like to use a huge chunk of BTC/MSC for, is what I call "Mastercoin Ventures".
I would like us to find a trusted person, seasoned with investing, to smartly invest a big chunk of our money.
I consider this money well spent if it contributes to the Mastercoin ecosystem and thus increases MSC valuation.
This distributes some of the funds from our centralized decision-making process, and lets that 3rd party (whom we need to trust) have the proper incentive and time to find interesting unexpected initiatives that we as board of directors won't even see, because of our narrow vision.
We are managing too much money right now, the quicker we get it decentralized (in a smart way), the better. In the Mastercoin Ventures proposal, I don't mean we just send a huge chunk of money to a complete stranger to manage - but rather that pending on finding someone suitable (e.g. a seasoned VC) we allocate a chunk of money to them, but only send it when reaching specificic milestones (e.g. when they secure an investment in a 3rd party company that contributes to the Mastercoin economy). We would still approve any such investments, but the VC would take the role of finding the ventures to invest it and doing due diligence.
About J.R's proposalThe type of money we award isn't relevant, any person chooses what currency composition they prefer, we can always convert on the spot.
The trick to choosing our ratio of holding between BTC and MSC is risk management and portfolio diversification. J.R. I believe you are still 100% MSC in your personal portfolio, and I think this is not a sound decision from a risk perspective. For the foundation, I think we need to pick some monetary policy and consult with a professional CFO on how to pick this number. I have no personal experience with proper risk analysis, but I think somewhere along the lines of 50-75% MSC and 25-50% BTC might be appropriate. This is just a hunch, and I would really not like us doing any decision before very very carefuly analysis by experienced personnel. Note again that the type of currency our developers prefer to be paid in is simply not relevant to this discussion as we can always convert on the spot.
About quitting your day job - is there a specific market or other condition you are waiting for here? What MSC price would be suitable for you to liquidate 1% and quit your job? I suspect that without any deliberate action from us, MSC prices would reach 1 BTC in the next few weeks and months. I hope that would be a suitable price point for you, if not before, because you would then hold over 100,000 BTC worth ... these are your own personal financial choices, I just think we need to draw a firm line separating what works for J.R (or J.R's wife) from what works for the Foundation and MSC holders. And I just don't see us buying a huge amount of MSC as a sound move right now, certainly not unless we get a proper risk analysis by a seasoned CFO. In fact we need this analysis anyway ...
not buying may also be the wrong and risky decision here. I am simply not qualified to make these kinds of decisions myself.
I don't understand why we even need to purchase more MSC. The Foundation owns about 9% of all MSCs. Isn't this a reasonable number for an ESOP? How much is usually reserved for ESOP? How much would be our target ... how much of all MSC do you believe the Foundation should own in order to operate efficiently?
