Bitcoin Forum

UPDATE: FOO.PPPPT is now owned and managed by brendio: see this thread (https://bitcointalk.org/index.php?topic=98889) for details. Most of the information below is likely to be outdated.

Original post:

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Since Pirate Pass-through bonds are the flavor of the month, I'm rolling out my own. Announcing FOO.PPPPT: the "Perpetual Pure Pirate Pass-Through" bond. Here is the asset on GLBSE: https://glbse.com/asset/view/FOO.PPPPT

Each bond represents 1 BTC invested in Bitcoin Savings & Trust (https://bitcointalk.org/index.php?topic=50822.0).

tl;dr: Pirate bonds, weekly 7% coupon payments. No fees, no commissions, no frantic bidding every week, no insurance, just pure Pirate! This is as close as it gets to the real deal (maybe even better).

The story is simple: I currently have 500 BTC with Pirate/BTCST, earning 5.6% a week. I want to bump up my interest rate. Hence I am auctioning off the remaining space in my account through GLBSE. I will sell 1500 bonds at 1 BTC each on the 28th of May, 2012 at 11:00 EDT (GLBSE time).

A total of 2000 bonds will be issued, and I will keep 500 myself, to represent my portion of the investment. Our interest rate will always be the interest that would be received at BTCST by the total value of bonds issued. Currently this means that I will pay out 7% a week, even if all bonds do not sell during IPO. I will always publicly disclose the total number of issued bonds. The address at which BTCST pays our interest will also be disclosed. I reserve the right to sell the bonds I hold at any time, buy more bonds from the open market, or deposit more money with BTCST and issue myself bonds for the same.

I will do pre-IPO sales of minimum 100 bonds at 1 BTC each. At least 750 bonds will be reserved for sale during the IPO itself. All pre-IPO bonds have been reserved.

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FAQ:

Pirate? BTCST? WTF are you talking about?

https://bitcointalk.org/index.php?topic=50822.0
https://bitcointalk.org/index.php?topic=82849.0

What's in it for you?

• Increased interest rate with BTCST.
• Increased liquidity for my BTCST investment: I (and all of you) can increase or decrease our level of BTCST investment as we wish by trading these bonds on the open market, while still maintaining the highest interest rate possible.

Aren't you losing money by doing this with no commissions?

A little bit. There's the IPO fee of 8 BTC, and the trade fee on 1500 bonds is 7.5 BTC. However, the potentially increased interest rates from BTCST means that I can recover this loss in 2 weeks, and then gain further out. This keeps the interest pass-through simple (and "pure") as opposed to taking a cut off the initial bond sale or interest payments like the other bond issuers. If you're paying any kind of fee to deposit coins with pirate, you should be demanding some insurance as well. Which leads me to...

Do you offer any insurance?

No. If BTCST defaults and runs away with our money, we lose everything. If pirate returns a portion of our coins, I will buy back the bonds for exactly the fraction of principal that is returned.

When do you pay interest / coupons?

Almost always the same day, never more than 24 hours after BTCST pays out. Currently, interest payments from BTCST are due every Monday at 13:00 EDT. Since the IPO is 2 hours before this date, you will lose 2 hours of interest for the first week, this gives me enough time to move the money into BTCST. You have to be holding the bond at the time of coupon payment, i.e. payments are not pro-rated.

How many more bonds will you issue?

I am currently only issuing enough bonds (1500) to get to the next interest rate tier. I do not intend to issue any further bonds, unless I feel there is significant demand, in which case any further bonds issued will be priced slightly higher. This one-time issuance keeps my overhead low, allowing me to pass through all the interest to you. Of course, if BTCST's interest rate tiers change, I will always strive to reach the top interest rate offered by issuing more bonds.

Will you buy back my bonds if I want out?

For the moment, no. Withdrawing money from the account would cause a drop in interest rates. If you PM me, I might be able to do it using my own BTC liquidity. However, this cannot be guaranteed, especially for large amounts. Buy this bond if you want to deposit some BTC and receive steady payments. Of course, the benefit of GLBSE is that you can put your bonds up for sale at any time, I'm sure people will grab them if the price is right.

Who are you, why should I trust you?

Good question. I have been in the Bitcoin community for a year now. Almost 20 of those 365 days have been spent on this forum (https://bitcointalk.org/index.php?action=profile;u=20191;sa=statPanel) (*gulp*). I also lurk on a bunch of bitcoin IRC channels. Come Friday, I will be verified with GLBSE. I will gladly disclose (and can prove) my real identity in PM (if you're planning to buy bonds pre-IPO). My real-world job involves doing research with tax-payer money, and publishing papers. In this field, reputation is everything and I wouldn't do anything to tarnish it.

Is pirateat40 ok with having millions of pass-through bond issuers?

I don't know about millions, but I have his personal blessing to issue this bond.

How old is your account with BTCST?

December 15, 2011.

---

All discussions, comments, and brickbats welcome. I will update the OP to clarify. Contract terms are coming up in the following post.

Contract, signed with my -otc gpg key (0xDF0E3996):

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1

FOO.PPPPT Contract / Terms and conditions:

At least 1 BTC per bond sold will be deposited with the issuer's account in Bitcoin Savings and Trust (BTCST) (https://bitcointalk.org/index.php?topic=50822.0). Each bond will be paid out a weekly coupon not later than 24 hours after BTCST pays out interest on the account. The value of the weekly coupon will be exactly x% of 1 BTC, where x is the interest rate that the total value of bonds issued receives from the underlying investment. If interest rates or tiers change in the future, I will make every effort (i.e., issue enough bonds) to attract the highest interest rate possible from BTCST. The current amount invested, and corresponding interest rate will always be published on the bitcointalk.org forum thread for this bond (https://bitcointalk.org/index.php?topic=83013.0). If BTCST defaults on the loan, or otherwise returns the funds for any reason, the bonds will be bought back for exactly the fraction of principal that is returned, if any. No on-demand buyback option will be provided. I reserve the right to call for a buy back of all outstanding bonds at a rate of 1 BTC + one week's worth of interest at any time. I do not assume any liability or provide any insurance for loss of these funds by BTCST. Please do your own due diligence before investing, and never invest more than you can afford to lose!
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Please don't forget there will be trade fees associated with selling your IPO shares (as you will be a taker). This just caused a lot of confusion with the TYGRR-P IPO.

Thanks, this is already mentioned in the FAQ. I will absorb any trade fees for simplicity, since I can recover this in a week (and another week for the IPO fees).

/me puts foot in mouth ;)

Got to love the competition in a free market

Are you planning to reserve a certain number of the bonds for actual sale on exchange, or might all the bonds be sold pre-sale?

Good point. I will ensure that at least 500 bonds are available during the IPO.

Brendio's Bitcoin Investment Bank will buy back bonds at 0.95 BTC up to 100 BTC, subject to there being at the time no material change in BS&T terms, for anyone who wants out. PM me to take this up and then you can transfer or sell on market (seller to pay fees). Minimum of 20 bonds.

Offer stands until I revoke it here.

Why are you posting this in another bond's thread? No insult intended; it just seems a bit strange.

Because BIB is interested in buying FOO.PPPPT bonds for 0.95 BTC each. The seems like the logical place to post.

And the offer is welcome here. Additional liquidity never hurt anyone.

Oh, you're buying these bonds. Sorry, my bad, I assumed you were discussing buying back your own bonds. I stand corrected.

The Bitcoin Investment Bank has many operations. Bond issuance, brokerage services, market making/prop trading, lending, investing, short-selling, arbitrage, IPO underwriting. Margin lending coming soon.

Sub. Was going to grab some TYGRR-P bonds until I saw this!

I'm currently unable to create the asset at GLBSE, and GLBSE support is working with me on this. As a matter of fact, I'm not even able to log in to GLBSE any more. Pre-IPO sales will have to wait until these issues are resolved. Thank you for your patience.

Updates:

• GLBSE issues have been worked out, waiting for asset approval and verification.
  
• Contract terms updated: I reserve the right to call for a buy back of all outstanding bonds at a rate of 1 BTC + one week's worth of interest at any time. (which at current interest rates would be 1.07 BTC per bond).
  
• Interest rate will be determined by total bonds issued, not number of bonds sold. This means that at IPO, since I am issuing a total of 2000 bonds, I will pay out 7% weekly, even if I don't sell all bonds and my interest from BTCST ends up being only 5.6%. Tying the interest to the number of bonds sold creates a weird dilemma for early bond buyers.
  
• I will reserve 750 bonds for IPO, and 750 for pre-IPO. 530 of the pre-IPO bonds have already been taken (reserved).
  

All 750 pre-IPO shares have been reserved! I will hand out a bitcoin address to each pre-IPO buyer. You can deposit funds there at any time, up to one hour before the IPO time (May 28th, 11:00 EDT / GLBSE time). This way you don't have to lose any interest in the remaining 4-5 days (and I can't offer that either: it's more accounting than I wish to handle at this point). I'll also need your GLBSE username. Shares will be transferred to you immediately after the IPO sale.

Thank you for your support.

Just got a call from Nefario. ID verification is done, you can see it on the asset page: https://glbse.com/asset/view/FOO.PPPPT

Dang. I got a missed call from the UK at the same time. That'd be the second time I've missed Nefario's verification call.

I'll get in on this for sure

Just a little bump.

IPO is in less than 24 hours. There are already more than 750 bids piled up on GLBSE, so you may want to adjust the price appropriately to get hold of some. Beware of last-minute sniping.

So far, this is the only Pirate pass-through on GLBSE that sells at 1.0 BTC and returns 7% a week, i.e., a full 7% return on investment. If I issue more bonds in future, they will probably be at a slightly higher sale price. So make use of the current offer while you can. Good luck!

Well, there's nearly no chance to get in at 1.0 BTC anyways... ;)

I hope you'll recognize the high demand and issue more shares than these 1500 asap (preferrably still this week).

I may actually have to issue some extra shares tomorrow, because of a mistake I made in estimating pirate's interest payout. He pays interest based on the average deposit amount in the previous week, for which I believe the cutoff time is 12 AM CST. If I put in 2000 BTC after IPO tomorrow, the average for the week might end up being less than 2000, which gives me only 5.6%, and that leaves me out of pocket (because I've committed to 7% no matter what happens). I'm considering issuing around 500 more (at the same 1 BTC rate), to put us safely in the highest interest rate tier. I am still thinking about this and will confirm shortly.

Update:

A total of 1000 bonds will be sold tomorrow during the IPO. This will bring the total number of bonds issued to 2500:

IPO: 1000
Pre-IPO: 1000
Held by me: 500

There are already enough bids on GLBSE to absorb the planned sale of 1000 bonds. I hope this minor change does not disrupt anyone's plans. :)

Holding out for higher bids now?  Don't like the way this ipo is being handled at all.  Withdrawing bids.

not sure what happened there... i missed out i guess, oh well, over to tygrr.p

As far as I know, I hit the sell button exactly on the hour, to the second. The GLBSE twitter feed has the log of all trades.

Thanks to everyone who placed bids. All shares have been sold, and all pre-IPO shares have been transferred. Funds are on their way to BTCST as we speak. There was a fairly big order that came in at the last moment, I'm sorry if anyone got out-sniped by it!

Congratulations on a successful IPO!

I guess there will be no way to reinvest dividends unless you count purchasing other's bonds?

No, thank you all for investing! I will come up with a plan to address any further demand.

Yes, for this bond, that is correct. You either buy from others or from me if I'm issuing more. There may be something else in the works for people who want to reinvest though...

 :o :o Someone really wanted a share.

3.5 Weeks of interest - depending on the risk you want to attach to the underlying security.......still a value.

Not when there's a half dozen comparable offerings trading for much lower prices. The counterparty risk is really the same for all these PPT bonds, so paying 1.249 for these over one of the PPT issues, Brendio's, Goat's, etc would take  a long time to recover that investment.

What.

From the OP:

This is essentially how I will address any additional demand. I do not intend to issue mass amounts of shares on a weekly basis like Goat. That is more risk than I would want to take on, eg, in the event that I have to buy back all the bonds at some point. I also don't want to send too many coins to pirate because I fear there is a risk of reduced interest rates if we keep doing that.

What I will do instead is arbitrage the bid side from time to time, if there is pent-up demand, and if it is worth doing so. This will not be at pre-announced times, or even guaranteed to happen. This isn't a share of a company where issuing more bonds dilutes the value of existing shares - each bond here is actually backed by 1 BTC in my BTCST account. The floor price can be expected to follow market rates of other pirate bonds. For example, Goat promises to sell his bonds at 1.02 for returns of 0.068 BTC a week. That translates into a clean price of 1.05 BTC for the FOO.PPPPT bond. (Dirty price on any given day will usually be the clean price + accrued interest). Of course, other market participants are welcome to do their own arbitrage as well. I expect the prices of the bonds to follow each other fairly well. As long as others keep issuing more pirate bonds, please do not expect much up-side to this bond either. If pirate stops accepting deposits, that would be a different story altogether.

That's fine, I was just wondering.  ;)


How do you arbitrage a bond on GLBSE? I'm missing something here...  :-\

If you find TYGRR.P bonds for sale cheaper than some bids on FOO.PPPPT, you can buy some TYGRR.P, sell FOO.PPPPT, and pocket the difference, assuming that the two bonds are fungible. Or if you have direct access to a pirate account, you can sell FOO.PPPPT and deposit with pirate directly. Until GLBSE allows short-selling, it won't be possible to do this unless you are already holding some FOO.PPPPT, but that's the general idea.

Exactly what I am wondering, do you just trade the bonds OTC with someone else?

Not necessary. If you value TYGRR.P and FOO.PPPPT equally (or adjust their values for interest rates like in my earlier post), but find that TYGRR.P is cheaper than FOO.PPPPT on the open market, you can buy TYGRR and sell FOO directly on GLBSE. Your inventory will now contain more TYGGR than FOO, but the overall number of bonds is the same, and you have gained some BTC in the process. This relies on the fact that you don't care whether you hold TYGRR or FOO, as long as you have some total number of pirate bonds from whatever vendor.

What criteria do you use when deciding to inject new bonds into the market? Having the issuer randomly inject new bonds into the system and unknown times is fairly disruptive to trading.

The same criteria that any arbitrageur would use -- "is this trade profitable for me", and there may be many factors going into that decision. I know there are others who have a BTCST account and still hold some of my bonds, for the same purpose of arbitrage and market making. The total number of bonds in circulation doesn't actually affect each individual bond-holder.

I could alternately sell the bonds that I personally hold, put the BTC into the account, and then *not* issue extra bonds to account for it, for the same effect. But this was never intended to be a "limited-issue" bond, and I would like the number of bonds to exactly reflect the value of the BTC in the account. Or would you like me to never sell my share of the bonds at all?

I'm open to discussion about this. But I believe issuing bonds when needed is a way to keep the price of the bonds in check, without having pre-announced bond sales every week.

Perhaps specifying that you, bitfoo, will issue an N-day notice (say, 7 days) before issuing any shares, which includes the number of shares and other details, would satisfy both your needs to issue bonds and others' desire for less uncertainty with regard to bond issues?

That's essentially the model that TYGRR.BOND-P follows: scheduled release of bonds every week at a certain price. If this is preferable for most people than me issuing and selling shares on demand, I can switch to that model. Let me know what you think. I probably cannot issue more than 500 bonds in one go, because I always run the risk of pirate returning the newly deposited coins. For this reason, I even prefer sending smaller amounts at a time, because then I'll know when to stop.

This, however, would essentially mean that I can no longer sell my own shares on the market when I wish. If I do, it just goes back to being the same as what I was already doing. (I could sell now, and then issue more to myself later as part of the weekly issue). Part of the motivation for me to run this asset was so that my deposit with pirate gets additional liquidity as well - that I can "withdraw" when needed by transferring the space to someone else instead of bugging pirate for a real withdrawal.

I believe the only people that are affected by my current method are those that expected to gain from a scarcity in this asset, or those that sniped the IPO and expected to flip the bonds for a profit. My point of view is that people are placing bids at whatever price they value this asset at, and I (or anyone else) would fill them if and when possible. Let's face it: until pirate stops accepting new deposits, this asset isn't really scarce. There are others like it that perform essentially the same function.

OK, I need to stop rambling. Share your thoughts. Convince me why what I'm doing is a bad idea, and I'll gladly correct it.

I think I've come to my senses on this one now. What was I thinking? ???

Bond issuance rules: (please see OP for up to date information on this)

Up to 100 bonds will be issued per day at a pre-determined price. These will be in the form of an ask wall on GLBSE. The price starts at 1.05 BTC immediately after dividend payment, and goes up by 0.01 BTC every day according to the following schedule:


The premium reflects my perceived risk of pirate sending back newly deposited funds, which would then force my coins out of the fund. At the moment, the price is roughly on par with TYGGR.BOND-P. The price and quantity on offer is subject to change. The remaining 400 bonds that I hold may also be listed for sale at any time, but probably at higher prices. Bond sales may be suspended at any time if I expect to be unavailable to transfer funds to pirate quickly enough.

I'm working on a bot to maintain the asks automatically. Until then, the process is manual and the listed times will only be approximate.

One more tweak to this: the 100 bonds for sale will be per "cycle", not per day. A "cycle" will involve the sale of these bonds, deposit with pirate, and confirmation that he has accepted the coins. Upon acceptance, I can re-list the new bonds for sale. There may be multiple cycles per day depending on availability (all steps are currently manual).

If you are issuing the bonds at 1.05 and paying out a dividend of 0.07, isn't the interest rate really 6.67%?

Yes. The title should probably be changed to 0.07BTC weekly.

Nice dividend payments today, thanks  8)

Haha, you were faster than me at announcing this. Happy Monday! All thanks go to Pirate, I'm simply passing on his payouts.


Yes, although the percentage is really on the face value, not sale price. But I will update the title / OP accordingly and clarify this. The 0-fee rate was valid mainly for the IPO. In future, if Pirate ever raises the interest rate tiers and we need to catch up, I will sell at a 0-fee rate again. Until then, I will price these at market rates, because demand is still quite high.

Sub.
Just got some for 1.05 each, very nice. Seems waiting until the first dividend was the right thing to do - bonds were cheaper (at one point they were 1.27 BTC -- that's 3 weeks interest +1BTC!) and I'm more confident in them.

Now we wait, and hope Pirate doesn't default... ;)

Will you be issuing new bonds every day?

Yes. They will be priced according to the schedule a few posts above (or in the OP). I'm only selling 100 at a time though, then I send the coins to pirate and wait for their acceptance into the account before issuing more and listing them for sale again. The process may be slow, depending on mine and pirate's availability. I intend to automate at least my side of the process.

Those times are PM, right?

The times are AM. GLBSETime = EDT. I tried to use the same format as the time display on the GLBSE website - I guess that's a little confusing. OP has been updated.

Dividends just went out. 272.79 BTC paid out to 3897 outstanding shares = 0.07 BTC per share.

Bonds are up for sale at 1.05 again.

Well that's disappointing. I saw the sales at 1.055, and looked at the dividends and there was nothing. Refreshed a couple times and still only the one dividend from the 4th listed, so I bought a share at 13:23 to test it out. Still no dividend listed as being paid, but eventually at 13:25 the dividend at 13:20 was finally updated on the page. I guess it takes the dividends awhile to work through the system and get update on each security's page.

That's right, the security page seems to get updated a little bit later. But dividends get paid to each asset holder as soon as I pay them - I verify this by having a couple of bonds in my personal account, and I can see the credit come in instantly.

I've noticed this behaviour too. It's a bit disconcerting for the issuer, wondering if the payment has worked or not.

If you're going to continually create shares, would you please consider doing something to keep the market from being flooded? Like not sell more shares if there are bonds on the market that day under your scheduled ask? Alternatively, offer a buyback feature to your notes?

There has been very little depth of market on the ask side for a few days. That lack of depth is preventing me from buying more shares.

This happens naturally - like right now, there are some bonds for sale below my price, which means my bonds won't get sold, and so no new bonds will get issued.


I assume you mean there's no depth on the bid side. I understand the concern. This is a problem that plagues many assets on GLBSE, not just this one (see the supposed GIGAMINING "crash" incident). There's just not enough incentive for people to leave BTC on the bid side of any GLBSE asset. It's hard to compete with 7% a week.


This is hard for me to do until pirate offers an automated withdraw feature. Currently I'd have to email him for every withdraw request, and I'm not sure he'd appreciate a deluge of requests on behalf of bondholders. Deposits are much more streamlined ATM.

I could possibly do a batched withdraw every week. I'll have to think about the procedure a little bit. In the mean time, perhaps it's easiest if you just place an ask at 1.0 BTC. You can even advertise it here for a quicker sale.

Dividends went out a while ago: 3928 outstanding bonds / 274.96 BTC = 0.07.

About buybacks: I'd be willing to do this once a week, but the problem I see is this (from the contract):

"The value of the weekly coupon will be exactly x% of 1 BTC, where x is the interest rate that the total value of bonds issued receives from the underlying investment."

If I start buying back bonds, the number of bonds issued is no longer equal to the amount of BTC I have in BS&T. If interest rate tiers change, I might end up being liable to pay out more interest than I receive. It probably should have been worded as "number of bonds outstanding". Any suggestions?

When you buy back, withdraw an equivalent amount from BS&T (if you can't resell them in a short period of time).

I think the title of this thread should be "[GLBSE] FOO.PPPPT - Perpetual Pure Pirate Pass-Through Bonds - 0.07 BTC weekly" rather than 6.67%, because that percentage is variable based on the share price.

Of course, I would withdraw the amount. But I can't destroy bonds on GLBSE, so the "number of bonds issued" still stays the same. Extreme example: say I have 5000 bonds issued but only 2000 left in BS&T due to buybacks. Then BS&T changes the interest rate tiers to 4000 BTC for 7%, 5.6% for everything below. Due to the wording of my contract, I'm still liable to pay an interest rate of 7%. Obviously I'd like to avoid having to get into a situation where I'm forced to violate the contract.

I'd need to change the contract to read "number of bonds outstanding" instead of "number of bonds issued" - that would fix this problem.

GLBSE documentation leaves a little to be desired. After you have bought back, you can use the "recall security" function to "cancel" any number of bonds in the issuer's account.

Thanks, that's perfect! I always thought "recall security" was when you wanted to buy back all securities from the market.

Bond buyback procedure:

Transfer your bonds at any time to the asset account on GLBSE (account name = bitfoo:FOO.PPPPT). You do not need to notify me when transferring them. The cutoff time for this is Monday 02:00 AM GLBSETime (EDT). After the Monday dividend payment, I will e-mail pirate for a withdrawal of all accumulated buyback requests. Once the funds are returned from BS&T, each bond will be paid the face value of 1 BTC + 1 week's interest. A fixed fee of 1 BTC will be deducted per buy-back transaction. If you send me bonds more than once in the same week, it still counts as just one transaction.

I cannot let the account balance fall too low, so I reserve the right to suspend the buy-back option at any time. Please check the OP before sending me any bonds. If more buy-backs are requested in a particular week than I can honor, requests will be processed on a first-come, first-served basis, and the remaining bonds will be returned.

I have updated the OP with this info. Let me know if you have any questions or concerns.

I'm more inclined to setting this back to 7%, because the face value of each bond is still 1 BTC, regardless of the premium paid for each share. At least that's how Goat (and maybe brendio) advertise their bonds. This document from brendio (https://docs.google.com/spreadsheet/pub?key=0Amnus1l1SKuwdC1IanpyeVZERlRjYVpiMVgyS0VXRUE&single=true&gid=0&output=html) has some useful information.

I also thought "recall security" sounded like the buy back function. I think it should be renamed to something more descriptive.

Also, when someone transfers you an asset on GLBSE, the portfolio page does not list who it came from. I'm not sure if you can access the info from the api or the downloaded CSVs, but until then it might be an idea to get people to inform you after they've transferred bonds back.

I did verify that the account CSV file shows who sent me how many assets and exactly when they were sent. Relying on user notifications isn't particularly secure anyway. Also, I like streamlining my operations as much as possible.

Good to know. I learn something too!

Esteemed PPPPT bond-holders:

I'll be travelling for the next week and a half. Coupons will still be paid out, of course, but will probably not be as quick as it has been in the past. I still expect to pay them within the promised 24-hour time-frame. In other words, "DON'T PANIC" (in large friendly letters). Buy-backs can still be processed (cut-off time for this is in less than 12 hours). Bond sales might be sporadic depending on availability.

Have a nice trip, and remember to bring a towel! (Towels are VERY useful...)

Whoever bought at 1.15 sure triggered a bunch of wishful thinking sell orders.

Why not. Sell orders are free, unlike buy orders, which involve opportunity cost.

I always keep at least part of my holdings in every bond in a sell order. Since there's no fees for placing an unfilled order on the book, I make money when they're fulfilled. E.g. Tygrr-Bond-B I buy @ 0.99 and sell @1.02 weekly, doing better than its interest.

Edit: just realized I got in on that! Sold FOO.PPPPT for 1.14999 :D

Looks like the payment from pirate hit the interest address. I expect bitfoo will be moving funds and paying dividends in the morning.

@Bitfoo
Since it matters this time, will you still be offering any bond cycles at 1.05 still? Your original post puts the rates after Tuesday at 2am EST at 1.06, but that didn't take into account pirate having to delay payment. Thanks either way.

As I said earlier, I was flying at the time, so my time-zones are all out-of-whack right now. Dividends went out around 12 hours ago. Next week may also be slightly delayed, but it'll get back to normal after that.


I did clear out all bids at 1.05 after dividend payment. But in general, the pricing will be fixed based on the schedule and not based on pirate's interest payment time. That's because his interest payments are calculated based on the average balance during the week from Monday 12 midnight CDT till the next.

I must have missed that, be it flying or sleeping though, I can't give you any flack for having a life to deal with.

Thanks for grabbing my bid along with everyone else's. Either rationale made sense, I didn't figure it could hurt to ask at least  8)

Yesterday's coupon payment went off smoothly. Still travelling though. Bond sales temporarily suspended until I get back and figure out what my standing with BS&T will be in August.

The rate has been lowered in the title, without any explanation, from 7% to 6.67%...
The bonds are being traded today for even below 1.0 BTC...

What does it mean?

The title change was done a while back (as in a couple of weeks ago) to reflect the return on the lowest sale price from the issuer.

0.07/1.05 = 6.67%

Troll harder please.

I didn't realize not catching some information in a thread was trolling.   ::)

I would have thanked you if you didn't answer like an ass :)

I still don't understand why people are selling below 1.00, if they can just use the buyback and get 1.07 on Monday.

Bonds have a face value of 1 BTC, but were being sold for 1.05 BTC, with a 0.07 BTC weekly coupon. I didn't want to be accused of false advertising. People who bought in at 1 BTC got (and are still getting) a 7% return.


I'm still waiting on pirate to give me information about my trust account status, so that I can continue at 7%. The two other options are - send the funds through another pass-through for 7% (ugh), or buy-back at the end of July. I suspended my own bond sales until I can figure this out, which seemingly triggered some panic.

Either way, bonds on sale at GLBSE are quite cheap now: buy buy buy!

Yeah. I wish I still had some money :)

Based on the poster's other replies, he/she is trying to reduce confidence in BTCST/PPTs as it is. Hence, it's rather convenient that he/she noticed just now.

The market has reduced confidence on its own. It appears people want their money out now before another "Did Pirate pay?" Monday rolls around, hence sub-1 BTC sales. Great time to purchase PPT shares if you're into em.

I don't intend to fuel the panic fire, but I can only do limited buy-backs now because the minimum balance for a trust account is 5000 BTC, and we are barely above this level.

Thanks for the information!

Does anyone who says things, which you just don't understand is trying to reduce confidence in BTCST/PPTs? :)

I'm guessing you are jumping onto me because I dared to explain why the PPT.x bonds' insurance is not a real insurance but only an illusion, so there is no real reason why their interest should be so much lower from the other PPT bonds.
Well I can repeat it: it's not a real insurance and if you don't get it then I'm sorry for you - not going to educate you further.

PS: If bond-holders have liked this service and feel like they trust me, feel free to give me a rating on -otc, as a good WoT rating is one of the criteria for trust accounts.

If you meet the WoT rating, can you confirm you will be able to continue the 7%?

Bitcoinmax and TYGRR.BOND-P have already announced that they are going to keep the rate unchanged, so I guess it's a matter of size to stay at 7%.
And, of course, the "security deposit"...

I can confirm 7% if (1) I get the trust account, and (2) the total amount invested (including any security deposit) attracts >= 7%. If needed, I will sell/buyback bonds only once a month to ensure a stable balance. If I end up getting more than 7% due to bonuses / whatever, all benefits will be passed through (it's in the contract!)

I'm unsure of the exact mechanics of how these things work, because I missed the IRC meeting about this while I was away. Pirate has promised to send me logs of this meeting, so I'm still waiting on that.

My impression has always been that you'll pay your bonds out at whatever rate you're able to get so I'm just hoping you'll be able to get at or above the older 7%.

I am curious if you've heard whether or not the security deposit will receive interest or not as this could change the effective interest rate everyone receives. Any word on this yet?

This is correct: according to the contract, I'm only liable to pay out whatever I get. But it turns out that 5832 BTC is nowhere near close to the amount that's required to even get the 7% interest rate (unless someone wants to buy 20000 bonds wholesale right now). Dropping interest rates down to 3.9% (savings account) or 5% (trust account tier 1) at this stage is out of the question - if it comes down to that, I think invoking the buyback clause and closing the fund is probably a better deal for everyone because 7% or close to it is being offered by other bond issuers. However, I am currently in discussions with other trust account holders to get a 7% sub-account. I will update when I get full confirmation of the various options available to me.

Here's to another week watching (https://blockchain.info/address/1C9cJqCH2ZzJpqhVr5yr5eR18p1a7uD6RY) for pirate to throw interest to bitfoo before it gets doled out to everyone else.

By the way @bitfoo, any update over the past week as to what's going to happen with the fund in about two weeks?

Also, if the fund closes, I'm assuming there will there be a coupon payment on the 30th still as normal?

Sorry for the late update, but hopefully we've worked out something that should be good news for all.

Pirate's new account tiers strongly encourage consolidation. Smaller accounts simply cannot compete any more. Operating this fund under a subaccount of another trust account holder usually ends up being a conflict of interest. So here is the plan:

FOO.PPPPT is being taken over by brendio's Bitcoin Investment Bank. The next two interest payments (Jul 23rd and 30th) will be paid out by me, after which brendio will take over. The fund will keep the same ticker, and will continue to pay out 0.07 BTC per bond at least for the forseeable future. We will soon publish a signed statement documenting this transfer of ownership and liability. To be clear, after the Jul 30th takeover, brendio will be fully responsible for managing the fund and paying out coupons. I will have no relationship with FOO.PPPPT apart from holding some bonds myself.

Brendio and the BIB have been managing many funds on GLBSE much larger than mine, and should be at least as trusted, if not more, than I am. But this takeover still involves a change in counterparty risk for this fund. Due to this, I will provide a buy-back option for the next two weeks, without any fees. The procedure will be the same as documented in the OP: send me the bonds by Monday 02:00 AM GLBSE time, and I will credit 1.07 BTC per bond as soon as pirate sends back the funds. All funds remaining in my account after interest payment on Jul 30th will be transferred to brendio's BS&T account. I assume brendio will provide more details about how the fund will be operated after the transfer.

More details will come as we work them out. Feel free to shoot questions or concerns in the mean time.

Have you made sure that brendio will honor the "FOO.PPPPT will always pay out the full amount of interest available" clause? Meaning, if he earns more than 7%, he has to pay even more than 0.07 BTC/week?

I invested in this, as it is the highest (even highest possible) yielding PPT on the market and I hope it stays that way!

Edit:
Do you pay out 1.07 BTC as soon as you got them even if I send you shares this monday right AFTER the interest payment or do you wait until the next monday?
Edit2:
Rechecked, seems you wait until the next monday.

It is my understanding that he will follow the contract, but I'll let him confirm this point (he might be away until Monday).


Yeah, sorry if that was unclear. I pay out 1 BTC principal + 0.07 BTC interest that I receive for that week, which is why you need to send me the bonds *before* interest payment, and I send back the 1.07 *after* interest payment. I wish I could afford to pay out an extra 0.07 BTC from my pocket, but I'm not pirate. ;)

What will the relationship between FOO.PPPPT and BIB.PIRATE (https://glbse.com/asset/view/BIB.PIRATE) be? BIB.PIRATE has a lower rate, but it will be operated by the same person. Will they be merged? If not, what's the advantage of keeping BIB.PIRATE shares, as opposed to trading in for FOO.PPPPT? Shares are at about the same price at the moment.

Uh why is the title of this thread 6.67% now?

Look one page back, there's a half dozen posts on that same topic.

Ah gotcha, didn't look far enuf back ;)

Ok ok, it's back to 7% now. 7% interest on par value of 1 BTC, with a variable premium on entry into the fund.

BTW, bond sales are now active again, until the fund is transferred over to brendio.

Hi Sukrim, I will honour the contract exactly as stated:


The highest available rate at the moment is 7 % weekly. The bonus interest, if achieved, is paid only one a month, and is not guaranteed, as it depends on account activity, so investors should not count on it when deciding to invest.


FOO.PPPPT will be kept separate, at least for the immediate future, but they will share the one BS&T Trust account. The two issues has slight differences in their terms, which affect which one is more attractive to different investors. One major advantage of BIB.PIRATE is the mechanism for wholesale investors.

I just got back from a big weekend away. I will work with bitfoo on the final details in the coming days and we will then make a jointly signed statement.

Here is the jointly signed statement as promised:

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1

Effective 05:00 UTC, Jul 30th 2012, 'bitfoo' (gpg key id 0x7087E81EDF0E3996) will transfer complete ownership of the FOO.PPPPT asset on the GLBSE (https://glbse.com/asset/view/FOO.PPPPT) to 'brendio' (gpg key id 0xB943789241C3973E). After this date, brendio assumes all liabilities regarding payment of coupons, principal and full adherence to the listed asset contract terms, releasing bitfoo of the same. This transfer of ownership and liability is contingent on the occurrence of each of the following events:

1) pirateat40 (operator of the underlying investment, Bitcoin Savings and Trust / BS&T) transfers all funds held in bitfoo's BS&T account to brendio's account.
2) Nefario or another admin of GLBSE transfers control of the FOO.PPPPT asset to brendio.
-----BEGIN PGP SIGNATURE-----

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Note that the interest for this week is accrued in my account, so I'm still liable to pay it out.

I concur with the above statement, although if you check the signatures, you can already see that. :)

Welcome to those investors who will be staying on under the new ownership.

I look forward to continuing to provide the reliable service for which both FOO.PPPPT and BIB.PIRATE are known.

seriously?  you are basically an affiliate for a scammer.

This is a small piece of the largest ponzi scheme in BTC history.

added to Micon's list of things to never, ever send your BTC to and get all you can back if you already have.

Please, go ahead and spread some FUD at #btcst on Freenode, or at a thread listed here (https://bitcointalk.org/index.php?topic=50822.msg605957#msg605957)!

any news on those juicy dividends?

I see the dividend payment marked as pending on my account, but it hasn't hit my wallet yet. You could look out for it on the interest payment address (https://blockchain.info/address/1C9cJqCH2ZzJpqhVr5yr5eR18p1a7uD6RY).

Update:

Dividends went out yesterday, soon after pirate paid them out. Brendio: check your BS&T account, it should be 5989 BTC richer already. :)
Nefario will transfer control of the asset shortly. All that's remaining is some buyback requests - for which I've put in a withdrawal request with pirate but am still waiting to receive the funds. Again, keep an eye on the interest address (https://blockchain.info/address/1C9cJqCH2ZzJpqhVr5yr5eR18p1a7uD6RY) if you're waiting for BTC from the buyback - it's out of my hands for the moment. Thanks!

The funds show up in my BS&T account. We are now just waiting on Nefario to transfer over control of the asset on GLBSE.

Sad to be one of those "some". Pirateeee!

Edit: I also got my coins+extra. Thanks foo and everything best for the future!

I hope this gets fixed no later than today..

Edit: yup, all is well. Pirate did his part, now waiting for foo. Thanks for help foo. It was a pleasure.

I checked with pirate again this morning, apparently he had forgotten to do the withdrawal because it was clubbed together with the request for transfer of funds to brendio. Got the funds immediately, and I just sent them out with an extra 0.02 per bond to compensate for the delay. Enjoy!

Asset control has been passed to Brendio.

Nefario

I confirm that I am now in control of the asset FOO.PPPPT.

I have created a new thread (https://bitcointalk.org/index.php?topic=98889) for the asset so that I can keep the OP up to date. If you have any questions, please ask them there.

Brendio.

Thanks to pirate, Nefario and brendio for the smooth transition, and to investors for your trust. I will link to brendio's new thread in the OP and lock this thread soon. I hope to be back with other FOO.* assets sooner or later. Until then, cheers!

Thanks for all of your hard work, Brendio and Bitfoo, on this! The community really appreciates it!

Thanks for the great work and great setup bitfoo, and here's hoping for plenty more of the same to come from pirate and Brendio. Three cheers!