[LTC-GLOBAL] The Litecoin Global Virtual Stock Exchange - Public Beta

[killerstorm]

Please check here:  http://en.wikipedia.org/wiki/Treasury_stock

A treasury stock or reacquired stock is stock which is bought back by the issuing company, reducing the amount of outstanding stock on the open market ("open market" including insiders' holdings).
...
Treasury stock does not pay a dividend

A company cannot own itself. The possession of treasury shares does not give the company the right to vote, to exercise pre-emptive rights as a shareholder, to receive cash dividends, or to receive assets on company liquidation. Treasury shares are essentially the same as unissued capital and no one advocates classifying unissued share capital as an asset on the balance sheet, as an asset should have probable future economic benefits. Treasury shares simply reduce ordinary share capital.

Also this: http://en.wikipedia.org/wiki/Share_capital#Types_of_share_capital

   Shares authorised = Shares issued + Shares unissued
   Shares issued = Shares outstanding + Treasury shares

I don't think you need full-blown share accounting on your exchange, but at least basics should be compatible.

Also I would like to learn difference between STOCK, BOND and FUTURES in your system, is it just about name?

[markm]

Also see Martian Accounting...

-MarkM-

[burnside]

is there any specific reason you chose 10 confirmations whereas the mainline litecoin client only waits for 6 before considering the transaction "confirmed"?

Not really.  Just chose a number that seemed safe.  What do the other exchanges use?  6 as well?

Cheers.

[burnside]

burnside, can you please explain IPO mechanics?

Create asset page says that I should create separate account per asset. (Am I allowed to reuse email address here, by the way?
OK, I understand, but it would be better if users and accounts would be separate things, i.e. one user can have multiple independent accounts.)

So let's say I will create a separate account and will issue 1000 shares. I guess this account will own those 1000 shares and will be able to sell them. Let's say it sells 250 shares so 750 shares are treasury stock.

But there is a problem: where are my shares, i.e. shares of a person who have created a company? I would like to have some, and it would be rather weird for me to buy them on an open market.

So, as I understand, with your ownership semantics treasury stock IS a stock of company's owner. You compute dividends per share by taking into account all shares issue, but a company does not pay dividend on shares it owns, so that money stays with the company and owner is free to spend it.

If my observations are true, this is very confusing.

I would recommend to implement it like this: company should be able to transfer shares into other account without selling them on market.

For example, let's say there are three founders and they decided that they should have equal share in company, also they decide to sell 25% of a company to get some money for operations.

To do this, they create a company with 1000 shares, then company transfers 250 shares to founders A, B, C (750 shares total) and tries to sell leftover 250 shares on the market. Let's say it was able to sell only 150 shares.

So, 900 out of 1000 shares are distributed, 100 is treasury stock. When company decides to pay dividends, it should not take treasury stock into account. I.e. if there is 900 LTC of dividends it should go to all shareholders, i.e. 1 LTC per share. Treasury stock exists simply to give company an ability to raise more money (or do a buyback), it should not earn any dividends.

A simple reality check: after a buyback dividends per share should rise, and it is only possible if treasury stock does not earn dividends.

If you change it this way it would be closer to how corporate ownership works in reality, and also it isn't significantly incompatible with your existing mechanics, it is just more flexible (i.e. allows company to have more than one founder/owner).

So please don't take it as a criticism but as a honest improvement recommendation. After all, I'm a Litecoin Global proud shareholder, so I'm interested in company's prosperity

I don't know why I don't have it on the todo list.  The part in bold has been my intention all along.  I intend to do free transfers of both shares and LTC between accounts from the portfolio / transfers pages respectively.

To answer your other questions:

I thought long and hard about doing a GLBSE-style master account with sub accounts and decided against it.  It's just not the corporate way.  For lots of reasons a corporate asset account should be a completely separate entity.  You can however have multiple accounts per email address, no problem.

Within the multiple account framework, dividends a company issues will only pay out to shares held by entities other than the account issuing the dividend.  I suspect that is how you were expecting it to work?  For example:

Account 1 is the Asset Issuer, has 10000 shares, has sold 8000 of them, issues a dividend.  The dividend gets divided out across the 8000 shares, and no part of it goes to the asset issuer's remaining 2000 shares.

A possible Account 2 could be a personal account for the asset issuer.  Account 1 could transfer the 2000 shares to Account 2, then the shares would collect the dividend.

Hope that all makes sense and answers your questions.

[burnside]

Please check here:  http://en.wikipedia.org/wiki/Treasury_stock

A treasury stock or reacquired stock is stock which is bought back by the issuing company, reducing the amount of outstanding stock on the open market ("open market" including insiders' holdings).
...
Treasury stock does not pay a dividend

A company cannot own itself. The possession of treasury shares does not give the company the right to vote, to exercise pre-emptive rights as a shareholder, to receive cash dividends, or to receive assets on company liquidation. Treasury shares are essentially the same as unissued capital and no one advocates classifying unissued share capital as an asset on the balance sheet, as an asset should have probable future economic benefits. Treasury shares simply reduce ordinary share capital.

Also this: http://en.wikipedia.org/wiki/Share_capital#Types_of_share_capital

   Shares authorised = Shares issued + Shares unissued
   Shares issued = Shares outstanding + Treasury shares

I don't think you need full-blown share accounting on your exchange, but at least basics should be compatible.

Also I would like to learn difference between STOCK, BOND and FUTURES in your system, is it just about name?

That's helpful, I'll try to re-word things where I can to clear things up.  I think in this case:

Shares authorized/Shares unissued = tracked in the contract or external (forum?) location.
Treasury shares = shares held in Litecoin Global by the Asset Issuer.
Shares outstanding = shares held in Litecoin Global by Asset Holders.

Does that work?

The STOCK/BOND/FUTURES is (right now) purely for display purposes.  Can you think of anything I should add?

Eventually it will also be used for customizing interfaces and/or sorting in various places.

Cheers.

[burnside]

I have been wondering why theres no mining pools listed on any stock exchanges. Maybe the revenue isnt there ?

Yeah, I don't think it is.  By the time you pay the hosting bill, it's mostly a labor of love at this point.  I setup my pool for LTC-MINING to use and offered it up for others to use to help stabilize the payouts.  It's grossed ~500 LTC (~$20) since I opened it up two months ago.  Definitely not enough to cover a dedicated server hosting bill.

That may change as LTC grows though.

Cheers.

[burnside]

Fixed a bug where asset purchases were getting logged backwards.  (as a sale)

It was a logging bug only, did not affect the transfer of the assets or the transfer of LTC.

Cheers.

[burnside]

Trade history now shows up on the security page.

You can now transfer LTC from account to account internally. (zero fee)

Scheduled the last couple days dividend as well.   

[killerstorm]

I thought long and hard about doing a GLBSE-style master account with sub accounts and decided against it.  It's just not the corporate way.  For lots of reasons a corporate asset account should be a completely separate entity.

Well, I think a 'corporate' way to do this would be to decouple users from accounts. I.e. each user has his own login credentials, and he is authorized to work with certain accounts. User who have created a company account has full access and he can give other users access to this company's account. E.g. treasurer would be allowed to access to company's finances. If treasurer is replaces, owner would just revoke old treasurer's access rights and give them to other user, no change of credentials is ever needed.

But this might be seen as needlessly complex, sure.

Hope that all makes sense and answers your questions.

Yeah, thanks.

[burnside]

Well, I think a 'corporate' way to do this would be to decouple users from accounts. I.e. each user has his own login credentials, and he is authorized to work with certain accounts. User who have created a company account has full access and he can give other users access to this company's account. E.g. treasurer would be allowed to access to company's finances. If treasurer is replaces, owner would just revoke old treasurer's access rights and give them to other user, no change of credentials is ever needed.

But this might be seen as needlessly complex, sure.

Depends on how big the exchange gets.  If LTC and the exchange catches on in a big way, I would love to be able to justify development of that ability.

Thank you for the input.  It's appreciated.

[killerstorm]

That's helpful, I'll try to re-word things where I can to clear things up.  I think in this case:

Shares authorized/Shares unissued = tracked in the contract or external (forum?) location.
Treasury shares = shares held in Litecoin Global by the Asset Issuer.
Shares outstanding = shares held in Litecoin Global by Asset Holders.

Does that work?

Mostly.

Shares are initially unissued, then they become issued when they are sold or transferred. Then they might become treasury stock if they are bought back.

So technically shares which are held by asset issuer are either unissued or treasury. But I don't think there is any practical difference, except for accounting.

The STOCK/BOND/FUTURES is (right now) purely for display purposes.  Can you think of anything I should add?

Futures are supposed to be standardized contracts with exchange itself as acting as a counterparty. What you have is likely no futures but, maybe, forwards, unless it is supposed to work on a meta-level.

In general, I guess, term 'derivative' would cover all kinds of stuff: http://en.wikipedia.org/wiki/Derivative_(finance)#Common_derivative_contract_types

[burnside]

In general, I guess, term 'derivative' would cover all kinds of stuff: http://en.wikipedia.org/wiki/Derivative_(finance)#Common_derivative_contract_types

Looks like it might make sense to break out everything under the heading "Common derivative contract types" on that page.  At least everything that it makes sense to trade on the exchange?

Initially everyone will have to specify all of the details of their assets in the contracts, but down the road we could create fields specific to the various derivatives so that they would be easier to compare, etc.

[burnside]

New!  Pretty graphs: https://www.litecoinglobal.com/security?s=LTC-GLOBAL

New!  FAQ: https://www.litecoinglobal.com/faq

What other questions would you like to see answered on the FAQ?

[dishwara]

I registered on the site https://www.litecoinglobal.com/
It said registered successfully & asked me to login.
When i tried to login with my username & password, i get wrong password or username error.
If i CLICK Lost password, i get 404 page not found error



Edit:
Login successful, but password length is only less than or equal to 20 characters.
Better have it clearly says in register page, if you cant increase password length.
ex: password MUST be less than 20 characters, not more than 20.

[EMIF]

i have already wrote the same on the other forum (http://forum.litecoin.net/index.php/topic,551.19.html), i reposted here for more discussion
Actually, the idea can also be appliable for the GLBSE


I have a proposal for issuer promoting. Maybe you can give some of the trade fees to the issuer as a promotion at the end of the month.

To be more clearer , here is  what in my mind exactly:

If any security hits a threshold value lets say 100,000 LTC then the system works as below:

Monthly Volume < 100,000 LTC issuer gets nothing
100,000  LTC  =< Monthly Volume  < 500,000 LTC then issuer gets the 0.02 % of the traded volume
500,000  LTC  =< Monthly Volume  <1,000,000 LTC then issuer gets the 0.03 % of the traded volume
1,000,000  LTC  =< Monthly Volume   then issuer gets the 0.04 % of the traded volume

I know it is early about talking but  i think it is important to decide when there exists a LTC-GLBL fund. So shareholders of LTC-GLOBAL can approve or not.

[burnside]

I registered on the site https://www.litecoinglobal.com/
It said registered successfully & asked me to login.
When i tried to login with my username & password, i get wrong password or username error.
If i CLICK Lost password, i get 404 page not found error



Edit:
Login successful, but password length is only less than or equal to 20 characters.
Better have it clearly says in register page, if you cant increase password length.
ex: password MUST be less than 20 characters, not more than 20.

Thank you for posting the follow-ups, I'll fix the registration page to be clearer!

I'll also get the password recovery and PIN recovery working today.   

[burnside]

IMPORTANT! Change in TERMS OF SERVICE

The terms of service have been modified to allow asset issuers access to your email address and quantity of assets owned. They will ONLY be able to see the quantity of THEIR asset you own and they will ONLY be able to see your email address IF you own shares of their asset.


Why are you making this change?

    It is for your protection. With this change we will be able to setup an API for asset issuers to download a list of who owns their asset. This will allow the asset issuer to continue operation in the unlikely event that anything should happen to LTC-GLOBAL. Hopefully everyone will sleep better at night, knowing that their shares will continue beyond the life span of LTC-GLOBAL.

When does this change take effect?

    October 1, 2012

[burnside]

I'll also get the password recovery and PIN recovery working today.   

Password recovery is up and working.

PIN recovery as well, which can be accessed from the Account page when you're logged in.

[burnside]

Internal asset transfers are up and going.

[Rathian]

Can't wait to see more stuff on the market!