The new NO vote is almost certainly NOT the same voter who had the old vote (for it to be same person they would have had to hold 10 shares now AND 7 days ago but not hold 10 shares 7 days before the next run of the cron-job after burnside reenabled it).

From observation it is apparent that when burnside corrected the error in voting (described by him in the post above yours) BMF lost one NO vote (the "no assets list" one) and one YES vote.  i.e. both of those were votes made by people who no longer held 10 LTC-GLobal shares.

The new NO vote is thus almost certainly unrelated to the old one.  It's not one person changing a comment - it's an invalid vote being deleted and a new valid one being made by someone else (not me - I hold 0 LTC-Global).  I can see why you made that assumption but it's almost certainly wrong.

Whoever made the old one (and the old YES vote) would not have been able to change their votes or comments prior to burnside's fix - as the nature of the bug was such that whilst it didn't remove old invalid votes it would not allow those invalid votes to be edited or changed between YES/NO/ABSTAIN.

Have sent MINING and SELLING to everyone who sent PURCHASE back to me so far.

Will be checking for more transfers regularly whenever i'm online.

I can give a one line description of each - but unless you understand most of the detail it's unlikely you'll make a profit from investing/trading in them.

DMS.MINING - Behaves like a 5 Mega-Hash/Second PMB (The things people call perpetual mining bonds).
DMS.SELLING - Is a bet that people will pay too much for DMS.MINING.
DMS/PURCHASE - Is a way to get one each of MINING and SELLING at a price that will probably deliver a small profit.

The real profit comes from correctly pricing MINING and SELLING and trading with people who get it wrong.

At present difficulty MINING will pay a dividend of 0.00016113 per day.  That will change (almost cetainly downwards) when difficulty next changes.

A FEW PREDICTIONS

As well as allowing the market to determine a price for fixed-rate hashing, the performance of this fund will also allow testing and examination of market participants in a few other ways.

Here's a few predictions I'll make now - I'm not going to explain the reasoning in detail behind these predictions (as doing so would make them less likely to be correct).  In general terms these predictions are based on my view of how many market participants assess the value and desirability of investments.

1.  I expect there to be far more trading volume in MINING than in SELLING despite an equal number of both being issued to investors.
2.  I expect MINING to trade at a significantly lower price per hash than PMBs on BTC-TC (by which I mean at a 25% or more discount - not just some small amount that could be accounted for by contract differences).  Initially this is inevitable (as PURCHASE is being sold below the price of PMBs) but I expect it to remain true in at least the medium term (months).
3.  I expect there to be a significant quantity of PURCHASE that never gets exchanged for MINING or SELLING and which is held long-term.

This post will be not be edited - so in some months time we'll see if any/all of the above were correct.

Yep - just got back and all 3 are approved.

DMS.PURCHASE will be placed for sale now at the price shown 2 post above:

405 days (IPO)    0.06525757

That price will be maintained until 16:00 GMT tomorrow when the first dividend to mining will be paid.

Shortly after 16:00 GMT today (just over 2 hour's time) I will send out the first units of MINING and SELLING in return for any PURCHASE That have been returned by then.  The delay before first exchanges are processed (and first dividend not being until tomorrow) is so that :

1.  There is a decent period (over a day) in which everyone can buy at the same price.
2.  The few hours of no exchange avoids one person (even me) being the only one selling MINING or SELLING (my own exchanges for my first batch will be processed along with everyone else's).

Expect the first units of MINING and SELLING to appear for sale shortly after 16:00 GMT today (in 2 hours time).  They will be at whatever price investors who converted PURCHASE choose to sell them.

Well amusingly there's at present a huge fuck up in his spreadsheet where if he sold at anywhere near his supposed BV he'd just be stealing from investors.  I expect him to fix it - it's too obvious for even him to miss for long - but will be interesting to see how long it takes.

Incidentally he's made various claims about me in his thread such as :

• I lost credibility over my criticisms of TU.SILVER.
• He pointed out errors in my own accounts.
• I'm just trolling.

Yet despite all those things being supposedly wrong with me :

• My bonds (the ones that he accused of being a scam) are the single biggest investment in his list.  And it's not because he can't get rid of them - I've offered to buy them back at full face value (and ANY investor can sell back at 99% of face value any time).
• He's changing TU.SILVER to pretty much EXACTLY what I've been suggesting all along - seperating the silver from the rest.
• He offered to pay me to keep the books for BMF AFTER he'd made the criticisms of my securities and after all my comments about TU.SILVER.  (He also offered to pay me to keep the books for TU.SILVER).  I declined both offers to keep the books - I'm not interested in doing that for anyone.

So don't fall into the trap of believing that usagi even THINKS I'm incompetent or dishonest (if he does - and still wanted me to keep his books and chose to invest in me - what would that say about him and his judgement?).

Just to be clear on one more point.  The inconsistencies etc usagi pointed out in my accounts weren't inconsistent or wrong at all.  The problem was primarily his inability to understand how LTC-ATF (denominated in LTC) uses LTC-ATF.B1 (bonds sold with a face value in BTC) to offset BTC denominated liabilities against BTC denominated assets to massively reduce exchange-rate risk.  There's been one error in LTC-ATF's accounts that I'm aware of - and that had no impact on valuation, management fees or anything (a number used to show break-down of assets was accidentally overtyped).  That error was found, fixed and reported by me WITHOUT anyone else having reported it (or, as far as I know) even noticed it.  All his other points were either him not understanding things or asking questions based on numbers he'd plucked from thin air and which appeared nowhere (and which, despite repeated requests, he would never explain the origin of).

On the last point it was as bad as :

Me saying "I have 12 Apples"
Him asking "Why do you have 500 oranges?"
Me saying "I've never mentioned oranges and have 500 of nothing - where do you get the idea that I claim to have 500 oranges?"
Him saying "You still won't explain why you say you have 500 oranges".
Me saying "Just fuck off".

You can read it all the the LTC-ATF.B1 thread (linked by usagi) if you want a laugh.  Having explained how this worked he then repeated questions based on the same lack of understanding in the LTC-ATF thread.  At that point I gave a more comprehensive answer - and the questions stopped.  Presumably by then, even if he still didn't understand it, he'd seen enough to realise that he was wrong.

Thought it was only 5 pieces of hardware from memory - not 6.

But it had dropped to 3 somehow in January (in his spreadsheet showing what he'd done with BMF's hardware) - and usagi changed his story over what had happened to one that was sold and used to pay off a CPA debt (having claimed it was sold to pay CPA's debts he later tried saying he "thought" it was only the mining from it that was used to pay off CPA).

He's amazingly bad at remembering his own actions and posts. e.g. completely forgetting about his personal liability to Nyan.A (denying he'd made the promise even though he'd not deleted the post in which he made it).  Even simple things like why he deleted all his posts prompt a loss of memory.  His stock answer when asked is 'I've explained it before'.  But if you go back to the one time he DIDN'T claim to have explained it before you'll find a guess.  Yep - he guessed why he deleted them.  Can't remember exact wording (don't know if it's been deleted yet) but it was something like "I guess I might have deleted them because ..." - it definitely avoided committing him to any single specific explanation.

When someone has such a poor memory over their past actions - even to the extent of forgetting what they posted a few posts previously in the same thread (and being too lazy to read their own posts) - it's a bit risky to be relying on them remembering what they did with the funds you invested with them.

Usual crap from usagi.


There's a misunderstanding he's made here - he believes I'm accusing him of charging people to see his books.  I'm not.  I think he got that idea from me saying :

"There will be a privileged (to the extent anyone sending BTC to usagi can be considered privileged) class of investors"

And read it as meaning that the "sending BTC" referred to a payment to see the books.  It didn't.  It referred to the fact that any investor in BMF has sent BTC to usagi - and so referring to them as 'privileged' is a bit of a stretch.  They have BTC with someone who has yet to return funds in Nyan.A 9 months after GLBSE closed down.  That's funds that were backed by the assets of Nyan.A,B AND C.  Backed by a guarantee from CPA.  Backed by the assets of Nyan.  And backed by usagi's personal promise to cover them.  And yet 9 months on they've received what - under 20% back.  Hence my reluctance to use the term 'privileged' about anyone whose funds are in the grasp of usagi.

If the intention of requesting access is just to deny access to me (or to me and a few others) then we hit a dilemma:

Either anyone requesting information has to reveal enough information about themselves to usagi for usagi to be confident it isn't someone he doesn't want having access.

OR

Anyone who wants access can just make a new account and get it - making the whole effort pointless.

And here's the other thing.  The clause not to tell other people doesn't just prevent the information reaching whoever usagi considers undesirable.  It also prevents investors from having ANY meaningful discussion in public about the fund's performance or assets - as they can't say much without revealing information that's Top Secret.  Maybe that's the real intent - as a few minutes creating a sock-puppet (or 0.01 BTC to buy an account) would get ME access.  The clause doesn't DO what usagi CLAIMS it's meant to do - it prevents ALL public discussion of his asset in any detail and prevents ANY new investor getting information when usagi is offline.  If usagi isn't around to give permission to access the data then how can a new investor find out anything?

To be clear my point isn't about what information usagi reveals.  It's about ensuring that all market participants get the same information - ideally without having to give biographies, copies of IDs and notarised statements that they aren't me plus an apostilled NDA

Here's some numbers to consider :

Apologies for poor formatting - I've copied and pasted from my spreadsheet here.  I'll try to remember to paste this after every difficulty change (along with other parts of it showing the calculation of NAV/U, dividends of SELLING etc - SELLING will tend to only receive a dividend after a difficulty change where difficulty rises a lot.).

Block reward   25
Difficulty   15605633
Hashes   5000000
   
Daily Dividend    0.00016113
50 days (Min Liquid)    0.00805649
100 days (Forced Close)    0.01611298
365 days (Buyback)    0.05881238
405 days (IPO)    0.06525757
400 days (Post SELLING div)    0.06445192
410 days (Pre SELLING div)    0.06606322

If we received moderator approval before the next dividend changes then:

The very first batch of PURCHASE would be sold at : 0.06525757 BTC each (with BTC-TC limiting us to 6 decimal places that would be 0.065258).  If the securities are approved for trading whilst I'm not around (e.g. in the next 8 hours or so whilst I sleep) then anyone intending to buy in at the start can place Bids at that price.  There's no need (or point) in over-bidding one another - ALL bids at that price will be filled.  And the price will remain at that until the first dividend is paid.

MINING would receive a dividend of 0.00016113 per day until difficulty next changed.

The 50 days value represents the amount of capital per share (of MINING + PURCHASE) that has to be kept liquid at all times.

The 100 days value is the capital per share (MINING + PURCHASE) which, if fallen below, triggers automatic closure of the fund with payout of all cash to MINING.

The 365 days value is the amount that would paid to MINING if the fund were closed now (after a vote from SELLING).  Paying more than that for MINING is totally stupid (paying anywhere near it isn't too bright either for that matter - unless you have good reason to believe difficulty won't rise much for quite a long time).

The 405 days value is the IPO price for PURCHASE.

The 400 and 410 days values represent the range in which capital will be targetted to stay.  If it rises above the 410 day limit then a dividend will be paid to SELLING to reduce it down to the 400 day level.  The only time this will usually happen if after a difficulty change where difficulty significantly rose (it CAN on rare occasions also occur at other points - but those will be exceedingly uncommon).

Missed responding to this.

First dividend will be paid at the first occurence of 16:00 GMT after the first units of MINING are distributed.  So if you hold MINING then any time 16:00 GMT arrives you'll be due a dividend.  If you hold PURCHASE then the same is true so long as SOMEONE holds a MINING.  The minor distinction is in case trading gets approved shortly before a dividend-due time (like within a few hours).  In that scenario I'd hold off doign any swaps (including my own) until after the dividend time.

Reason for that is that from first sale until first dividend, PURCHASE will be sold at a fixed price.  At the time of first dividend that price will change - and from then on all new sales will be at a slight premium to the actual value of existing units.  I therefore want to ensure some reasonable window for everyone who wants to market-make initially to get in at the same price (the very first change in price will probaly be very slightly upwards due to the 2% markup exceeding the likely amount of the dividend paid).

As soon as approval is received (and I notice) I will, of course, post indicating the amount and time of the next dividend for MINING and the initial sales price for PURCHASE.

I agree with your estimate that the discount rate is too long in the short-term and too high in the long term.  That actually was one of the factors constraining the range in which buy-back had to be set.  The value was determined by trying to find a value where there could legitimately be speculation on the value of MINING.  To pick extreme examples - if buy-back was at 10 days dividend (and PURCHASE was sold at a small amount over the capital needed to guarantee Buyback initially) then the price of one PURCHASE would never cover the amount a MINING could expect if dividends were paid perpetually.  At the other extreme if buy-back was at 1000 days then there's no way it would ever be enforced - and the need to always have sufficient capital to cover a buy-back would mean that a LOT of money would be charged for PURCHASE with no realistic chance of the majority of it ever being needed.

Beyond that there's no precise formula I used to define it.   With current difficulty trends it's above what MINING could expect to earn in any reasonable period.  With a more flat difficulty progression it becomes LESS than anticipated long-term earnings.  For more informed investors/sepculators on this fund it's predicting the point at which difficulty will (relatively) stabilise that's key - and I've tried to set a buy-back that practically allows betting on that prediction (not always - but at some stages).

365 is, of course, the number of days in a year.  Having determined that in my estimation the optimal value (by which I mean one where BOTH MINING and SELLING have a change of profit) lay somewhere in th 300-500 range it seemed a nice number to pick.

The 405 is just the 365 plus a small bit extra to allow for short-term variance (spikes) - so as to ensure that in most scenarios capital can remain above the amount needed to execute a buy-back and still leave a bit left over for SELLING to get.

There are possible models for difficulty where this breaks down at some point - either ending with forced closure and all funds going to MINING (where difficulty becomes almost static for a long period - or even decreases) or with MINING dividends reducing to a trivial amount with the vast majority of capital having been returned to SELLING (where difficulty rises astronomically).  Those who believe in either of those scenarios obviously have a chance to try to make a very significant profit by trading appropriately.

Neither of those endings would be a failure for the fund.  In many ways the fund CAN'T fail (other than if I manage to lose its capital in investments).

• If one set of MINING or SELLING make a killing at the expense of the other then the fund has facilitated the mass transfer of capital from those who were wrong to those who were right.  I don't see that as a bad thing.
• If some years down the road neither side has lost or gained a lot then this may not have been great as an investment - but it will have been absolutely brilliant at demonstrating the exact true value of PMBs over a lengthy period of time.

I believe the actual outcome will lie somewhere between the two options above - probably nearer the first than the second.  At times the market price MAY represent a true value - but I believe the market isn't informed enough AND too many elements are unpredictable anyway for any sustained period during which the trading price of MNING is consistently an accurate representation of real value.

Moderators should be aware that there is a significant difference between the contract currently up for BMF and the one usagi is proposing to use in his thread.


Point 5 is a new addition.

What usagi is doing is saying that only SOME investors will have access to information about the fund.

This has two problems:

1.  It directly faciliates insider-trading.  There will be a privileged (to the extent anyone sending BTC to usagi can be considered privileged) class of investors able to see accurate information on the state of the fund - and use it to trade with an advantage on the market.
2,  It creates an asymmetry of information.  If someone selling shares has access to the financical information then anyone without such information who wants to buy is forced into acting based on a much lower level of information/knowledge.  That means that they are forced to compete on the market and enter into trades at an unfair disadvantage.

Both of these things are entirely undesirable.  The SAME infomation should be provided to all current investors AND to all prospective new investors.  If information is only going to be released to investors then the security should NOT be listed for public trading.  Public trading requires public disclosure.  That does NOT mean that full details of every transaction should be provided to everyone.  It DOES mean that whatever is provided to one investor should be provided to all (whether invested or not).  If something needs to be kept private for legitimate reasons then it needs to be withheld from ALL investors.

Usagi has long been a proponent of having multiple tiers of investors - the ones who know what's going on (or at least have been tricked into thinking they do) and the rest.  It's an abhorrent practice and one which should not be approved.  It is entirely incompatible with the notion of a public company.

Some more spin posting by usagi today.  Let's look at a bit of it - and see just how usagi lies and misleads at every opportunity.


Let's start with some basic facts.

Investors bought BMF shares for a certain price.  By the time GLBSE closed, if you added the remaining value (or market price) of those shares to all dividend payments they had received it was a LOT less than they originally paid.  They had made a loss.

Usagi does his best Bill Clinton impression by saying "it all depends on how you define successful".

To claim you were more successful than someone else you HAVE to have been successful to some extent.

If company A loses 80% of invested capital and company B loses 20% of invested capital then you CAN say that:

Company B had less disastrous results than company A.
Company B didn't perform as badly as company A.

But you can NOT say that company A was more successful than company B - as NEITHER was successful at all.  If you weighed the amount of "success" both had then the scales wouldn't budge for either - they both failed.  Just one didn't fail quite as badly as the other.  Of course it COULD be the case that usagi's goal wasn't to make profit for investors (e.g. it COULD have been to prop up CPA) - so by some measure other than profit maybe BMF had some degree of success.  But without defining that other objective the claim is meaningless.

Next note how usagi says "most successful investment fund" but then when trying to justify the claim talks about "outperformed every mining issue".  Usagi claims to be the the best orange (investment fund) then tries to justify it by comparing to apples (mining issues).  You can't compare apples and oranges.

And the claim to have "outperformed every mining issue" is just an outright lie.  The easiest example I can think of - which BMF did not outperform - is Moore.  Which paid out weekly dividends and maintained a value at exactly initial IPO price - including buying back at that exact price.  Investors in that made a profit.  Investors in BMF made a loss.  How did BMF outperform it?  It didn't - it's just usagi lieing as usual (whilst making a comparison that wouldn't even be valid if it were true).

One more note to moderators:

Do be aware that usagi is NOT asking you to approve a contract.

The contract listed in BMF is not the one currently active - NOR is it the one he intends to have.  He has posted asking for advice on what should be in the contract - i.e. he wants approval before he's even ready to determine what the contract is.  So you're being asked to approve something that isn't even defined.

Of course that's not really unreasonable - GLBSE did only just close, so it's not like he's add any great amount of time to sort things out or decide what he wants to do.[/sarcasm]

Following text inserted into the section of the contract relating to investment:

--- Inserted text starts below this line ---

Entities may be removed from the fund's white-lists by a majority vote of DMS.SELLING.

Votes may only be initiated by the Manager (at his discretion).  Investors may propose candidates for white-listing - but have no right or ability to compel a vote to be held.

--- Inserted text ends above this line --

These minor additions were made for the following reasons:

No means existed by which entities (issuers, counter-parties or assets) could be removed from our white-lists.  Whilst that was hardly serious (I can always just refuse to invest in them, expose capital to them or have exposure to them via loan collateral) it is preferable to be able to remove them completely so they gain no credibility from being on our white-list.

No means existed by which investors could compel a vote - but that left an ambiguity over whether a vote could be initiated by investors.  They now explicitly can NOT.  That is necessary to avoid the situation where someone unsuitable gains significant holdings of DMS.SELLING and then initiates a vote to have themself white-listed (though they could still not compel me to expose capital to them).

Following text added to the end of the contract (the unplanned closure section) to address the issue identified earlier of a scenario where a majority of remaining shares are inactive and so no vote can be passed.

--- New text to be added to end of contract below this line ---

In the event of a vote with a proposal to split funds being left up for 7 days and (in either vote) the total of (Yes votes + No votes) being less than 50% of all outstanding shares then the Manager will determine a fair (in his best judgement) split of funds and execute final payments in accordance with that decision.  This clause is added specifically to address the scenario where most shares have been redeemed with a large part of those remaining outstanding being unable or unwilling to participate in reaching closure.

No - I mean what I said.  I could equally well have said PURCHASE outstanding plus MINING outstanding.

Let X be the number of MINING
X will also be the number of SELLING (they're only ever issued in pairs)

So MINING + SELLING would be same as 2*MINING OR 2*SELLING.

1 PURCHASE = 1 MINING + 1 SELLING

When I calculate the NAV/U I'm calculating the number of PURCHASE that have been sold less the number that have been bought back.

Some of those PURCHASE will still be PURCHASE - others will have been converted into a pair of (1 MINING and 1 SELLING).  SO to calculate the effective number outstanding I have to add the ones that are still PURCHASE to the ones that have been converted.  The latter number (the converted ones) can be determined from EITHER the outstanding MINING OR the outstanding SELLING (those 2 counts being identical).

Remember when a PURCHASE is converted it ceases to be outstanding - as it is returned to issuer.


Corrected - missed that one when I changed the basis of management fee from being taken on all outgoing payments.


Actually it's both.  The main danger is a short-term rise (a spike) where I pay out a dividend to SELLING then after the spike, when the drop back happens, capital has fallen below the target level for the revised (correct) difficulty.  Have changed it to "to allow for short-term variance in difficulty".

Short-term rises (what I had) was unclear.  Short-term falls don't need correcting for - being short-term there's no problem if capital isn't in place for them.  It's both together which are the problem - so variance is likely the most accurate term to use.



It's not an ideal solution - but without some revenue generation investment (especially on the SELLING side) would have to be done within very precise ranges for any investors to make a profit.  There's a few reasons why I rejected your suggestion (it's one I considered):

1.  I already manage a trading fund - which has as much cash as it needs and has no problem raising more if needed (my inbox is full of PMs from people who'd love to buy into it).  So it would make littlle sense for me to take on this project if my reward was only to keep profit that I could already keep the vast majority of anyway through existing endeavours.
2.  Supply would be artificially constrained.  If I assessed the maxmimum amount of loss likely to be sustained on investments at X% then my ability to issue PURCHASE would be restricted to an amount where X% of total sales met the amount of personal cash I was willing/able to risk.  As it stands, supply IS still limited - in that if capital raised exceeds available investment opportunities of suitable quality then return on investments will fall, possibly to the extent of lowering the perceived value of SELLING and so halting further sales of PURCHASE.  But that's a far higher limit.
3.  It is entirely likely that investing all capital (or the amount allowable to be precise) will not be possible in the short-term.  There are relatively few suitable investments - and loans will take a while to get going.  If I were only paid from investment proceeds then issuing more PURCHASE would leave me accepting risk (just holding cash in my own wallet is risk - albeit very small) without ANY benefit.
4.  It would leave open messy areas in terms of liability - for example if BTC-TC vanished would I personally be liable for ALL investment?  There's no way I'd want to take on significant risk for low-return safe investments - as the relatively low profits don't warrant me having to keep the entire amount available in case of disaster.  The alternative - that I pass on such risks whilst keeping all the profit - is surely unpalatable for investors.


The price at which further issuances of this will be sold is defined in the contract - and will fall so as to remain at around the same multiple of hashing power.  Pricing based on NAV/U ensures no loss for existing investors - and dividends to SELLING ensure that capital doesn't grow excessively (as a multiple of MINING dividends) in the event of fast rising difficulty.

The price of all three will fall over time - and yes, if difficulty rises raidly for a sustained period, eventually will reach the point where the price for units becomes tiny.  That's IF SELLING haven't voted by then to do a buy-back of course.  If the price were to fall so low as to begin to lose definition on the market (i.e. not enough decimal places) then it may well make sense to open a new one with a higher hashing denomination and cease sales on this one.

But in the short-term that's unlikely to be an issue - and splitting short-term sales up across different Series would just add work for me, add listing fees and split liquidity.  I can't help feeling I may be missing some element of your point here - as I'm not seeing how there'd be a need to even consider a new Series just because (if) IPO volume was high.

Thanks for the feedback - always great to know at least one person actually read the whole contract.

Let's have a chat about Nyan.  Not so much Nyan.A/B/C, as Nyan itself - the holding company that never gets mentioned as it has no investors and no assets.  It wasn't, however, always that way - and in the process of getting to where it now is usagi royally screwed over Nyan.a investors.

Here's a quote from usagi made in the last few days:


I'm not concerned here with usagi's personal obligation (it was a promise made this year - not a contractual obligation - we'll leave why usagi believes promises aren't as important as contractual obligations to a later post).  It's the last part of that sentence which is incomplete.

In addition to the contractual obligation for CPA to pay out, there is also a contractual obligation for nyan's assets to be used to pay off Nyan.A AND Nyan.B (Nyan.B would only receive funds if there were assets left after Nyan.A was paid out in full).  Now the failure to mention that COULD be considered as innocent (as nyan has no assets) until you look into WHY it has no assets.  And that means going back quite a while and looking at one of the most dishonest acts usagi ever conducted (which got very little attention as not long afterwards GLBSE vanished - and so did usagi's posts - and everyone had larger fish to fry).

But I get ahead of myself - let's start from the beginning.

Nyan was created by CPA giving it cash in return for share in nyan.  Nyan was thus wholly owned by CPA in practice - at some point there was talk of selling shares in it to the public but I don't believe that ever happened.

Nyan.A, Nyan.B and Nyan.C were then created - and parent Nyan bought shares in all three.

A/B/C were meant to be a form of tranched CDO - but they were badly designed from the start.  Specifically two enormous factors were left out:

• A need for defined ratios between the number of each type that would be issued - without these it's impossible for anyone to value them.
• A need for a reset/settlement date - without this the risk is run of the risk/reward ratio for one or more tranches to become schewed beyond repair (as was the case - where Nyan.C hit zero value fast and was left being propped up by the other two whilst offering no reward in return and with no defined means of resetting to restore any sort of sense).

This sort of incompetence is common from usagi - but not the main thrust of this post.

Nyan's job was to maintain some sort of balance between A/B/C (though that was never defined) to provide liquidity and to underwrite to an extent any losses that would otherwise be incurred by A and B - by its own holdings being pledged to A and B in the event of a short-fall (if this happened then it would effectively mean the assets were split between less shares - a sort of reverse dilution effect having the result of increasing returned capital to other investors).

In general Nyan DID fulfil those roles.  Until suddenly it didn't.

Remember that Nyan's capital originally came from CPA - in effect nyan was ring-fencing CPA cash into being committed to cover any loss of value to Nyan.A and B.  Well CPA got very short of cash - to the extent that it couldn't pay off its own debt in a timely manner (some of its debt has only recently been finally settled).  At the same time Nyan.C had hit zero - and Nyan.B was down a lot.  Having lost CPA's cash on one obvious ponzi (Pirate) usagi had proceeded to go double-or-quits on another one with Nyan.B/C's cash (obsi) and of course the result wasn't quits.

We're now at a point not long before GLBSE vanished.  What did usagi do?

Nyan sold its holdings of Nyan.A/B/C in off the market transactions then gave the cash back to CPA in return for cancellation of the shares in it.  In one fell swoop usagi totally removed a protection that Nyan.A and Nyan.B were contractually entitled to - to try to bail out CPA.  That was done without any vote and worse was almost certainly done by selling the shares back to Nyan.A/B/C at inflated prices (usagi had been artificially valuing them high - by pretending obsi hadn't scammed so valuing his shares WAY above market).  So not only did their contractual protection vanish - but they got cleaned out of what liquid cash they had as well.

Removing those assets - that were contractually supposed to protect Nyan.A/B - is little short of outright theft.

That's why Nyan wasn't mentioned when usagi detailed the contractual sources of funds to pay out Nyan.A.  Because that contractual obligation became worthless when usagi deceitfully and in a blatant conflict of interest decided to make it worthless to try to bail out his (then) favourite failed asset CPA.  BMF had already been screwed to try to help CPA (that's the insurance contract where usagi eventually admitted to a conflict of interest - despite having previously claimed my accusation of conflict was false and even cited that claim by me as grounds for me being a scammer).  Nyan were further screwed to help CPA by making interest-free loans to it dressed up as investments - though on a much smaller scale.

Do moderators really think that sort of behaviour is compatible with approving usagi to trade another asset?

That'll have to do for today - got other things to get on with.

On planned dissolution there would be no priority whatsoever.

One DMS.MINING + one DMS.SELLING is exactly equal to one DMS.PURCHASE in value - so dividends would be paid (in the same amount) to DMS.PURCHASE as they were paid to DMS.MINING.  And after DMS.MINING had been paid off, to DMS.SELLING at the same time as to DMS.PURCHASE.

If a replacement fund were being opened then I'd certainly consider allowing trading of these for ones in the new fund.  I'd definitely be looking at the new fund buying out remaining investments of the current one - as it would get invetsments without paying market fees and this fund would get its cash back (to pay out) a little quicker.

In the event of unplanned dissolution (the "I can't continue" scenario) it's slightly different - as the split of assets between DMS.MINING and DMS.SELLING can't be defined by me.  The contract specifices that this could be detemined by vote - in practice most shares would be sold back well before that happened.

With a buy-back at 100% NAV/U on DMS.PURCHASE anyone holding both SELLING/MINING can immediately convert them to a PURCHASE and sell back.  Anyone holding only one type can either sell that - or buy the other and cash out.  With the buy-back being at full value arbitragers are going to ensure the market is pretty efficient - and that anyone who wants out can do so at a very small loss at most.

We'd rapidly reach the point where only shares left were those of people who were away and those of people holding a handful of one type.  With zero investment income as investments get closed there's no incentive at all for anyone to stay invested if they don't have to  - in a fund where the manager has stated he's quitting - when they can cash out immediately at nearly full value just by selling or buying as needed.

Where we DO hit a brick-wall is if ALL (or mainly all) that's left are people who aren't around at all to vote - meaning no vote can conceivably pass.  I'll amend the contract and add in a clause that if a vote is put up and less than 50% of all outstanding shares vote either yes or no then the manager can distrbute the remaining funds in whatever manner he believes is fairest.  There has to be SOME means to split it - and if a majority of outstanding shares aren't even voting then that's only real option.

Part of the reason (I thought) of the rule was to prevent an issuer having undue voting power by voting with shares held by other assets they also controlled.  In that context do remember that usagi's securities are the ones which had more Yes votes in motion on GLBSE than there were shares outstanding (there was a bug where the asset issuer could vote, move the shares from the asset wallet to their own - which was on same account - and vote again, then move them back.).

The rule applies to assets LISTED on BTC-TC not just to ones TRADING.  Arguably BMF/Nyan etc are ALL listed - just disabled from trading.

BMF could buy-back its shares or they could be sold by private transfer - including to usagi himself (there's no rule against him personally owning them).

Usagi recently stated :


The BitVPS belong to Nyan not BMF.  If he's saying all BMF has left is cash then there's absolutely no reason why he couldn't liquidate - or at least buy back the shares held by Nyan/CPA with their portion of that cash.  To NOT do so is unnecessarily adding delay to paying Nyan off.  He's just stated BMF has no assets of significance left - so the only thing stopping him paying out Nyan is his own attempt to use the threat of delayed/non-payment as a crude tool to try to bludgeon moderators into voting yes.

On the topic of undwinding there HAS already been significant unwinding - much to the detriment of some investors.  I'll do another post and explain how that went down - and how he screwed his Nyan.A investors in the process.

Every ponzi/scam pays out dividends.

Until they stop.