Clever. How'd you settle on 2% as the right amount?

Ok thanks this is very helpful. I'm still not quite there yet, what I'm not exactly clear on is how the dilution helps the existing investors. In your example, let's say that the bankroll was previously split between two people with 0.5 BTC each, so they each previously had a 50% stake. Without any dilution they would expect to have stakes of 25% after the new investment of 1 BTC.

Are their stakes now instead 0.5/1.98 = 25.2525...%? Since the bankroll is actually 2 BTC, this would give them 0.505050... BTC each, in other words their personal stake increased by 0.005050...BTC upon the new 1 BTC investment.

Indeed 2*0.005050... = 0.0101... which is how much the new investor had deducted from his investment so that works out, so I'm guessing this must be what happens.

This makes me realize that I never totally understood how this works--so when someone invests say 1 BTC to the bankroll, their portion of the bankroll is 0.98 BTC and the other 0.02 BTC is divided proportionally among all existing investors?

I'm an investor who checks occasionally and I just saw this newer change--or likely as not I saw it before and ignored it as I thought it was something about the previous change. Anyway I just noticed it and came here. Some off-the-cuff thoughts:

• Agree that Daniel can do whatever he wants, and I understand the goal of wanting to reduce the bankroll.
• More transparency showing this moving XDR/BTC average and what the commission would be today, would be in the past, and would be in the future if the XDR/BTC rate stays the same is needed.
• It seems like most of the discussion here has been around this XDR/BTC rate, but if I'm not mistaken, this new formula is also the first time the size of the bankroll has been a variable in the commission calculation. To me, setting a "target" size for the bankroll is a bigger change than using this particular rate to set the target size.
• I think the target sets up an equilibrium/expectations problem. The higher the bankroll, the higher the commission, and the lower the rate of return to investors. And, there will be an immediate jump in the commission in the near future. So it may make sense to divest. But I am inclined to think, why not give it a few months and see if other people divest so that the bankroll goes down and my stake as a percentage goes up. But if everyone thinks that, no one will divest, and we'll all be caught in a waiting game.
• Therefore, Daniel I would suggest that if you *want* people to divest, you do something like waive the 2% fee for reinvestments for some period of time. Right now I do not want to divest because if the bankroll subsequently shrinks enough that investing becomes attractive again, I would have to pay the 2% fee again. If I didn't have that worry, I would be more inclined to pull some or all of my stake now--which you want to happen.
• I notice that setting the commission as a proportion of a target size really amplifies the effect of changes in the bankroll. In the past, if the size of the bankroll went up by 1%, my expected return would go down by roughly 1% because of dilution. Now, let's say the commission is at 75% under the new formula, and the size of the bankroll goes up 1%: I still take the 1% hit to dilution, but now investors' share of house profit is reduced from 25% to 24.25%, which is actually a 3% change -- so my expected return is down a whopping 4% from just a 1% change in bankroll. So if I stay in, I'll feel a lot more pressure to check the bankroll size often.

Of course fundamentally the problem is that bustabit does very well, and there are not a ton of other great alternatives out there. You can get 6% yearly with BlockFi, but only up to 2.5 BTC, and above that it's just 3%. Depending on how you assess the risk that bustabit will vanish in a poof of smoke, there's potentially a long way to go before it makes sense to park btc elsewhere.

[edited to remove blank lines from the bottom -- oops!]