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

[burnside]

I'm hoping this new addition to the ToS won't be too controversial, given the unbelievable web of deceit that is being unravelled as the GLBSE implodes:

    * Funds will not be allowed to invest in other funds.  If a fund is caught investing in another fund your
      asset will be frozen until the issue is rectified.  In extreme cases assets will be subject to delisting.

[killerstorm]

What happens to LTCI? It was going to invest into LTC-ATF according to contract.

I see nothing wrong with it as long as there is no contract violation (i.e. if fund said it won't invest into other funds it shouldn't).

[CJGoodings]

Its a much needed change, gblse has turned into a real shitstorm because of it.

[Deprived]

What happens to LTCI? It was going to invest into LTC-ATF according to contract.

I see nothing wrong with it as long as there is no contract violation (i.e. if fund said it won't invest into other funds it shouldn't).

there's been more discussion on it on the litecoin forums:

http://forum.litecoin.net/index.php/topic,551.0.html

towards end of that thread.

[killerstorm]

    * Funds will not be allowed to invest in other funds.  If a fund is caught investing in another fund your
      asset will be frozen until the issue is rectified.  In extreme cases assets will be subject to delisting.

<In Palpatine's voice> Good.

With each such arbitrary restriction we are closer to decentralized exchanges. Centralized ones shot themselves in the foot: they inhibit survival of the fittest. Eventually they'll turn to the ghettos...

At the same time decentralized ones will effectively decouple trading itself from services like verification/rating agencies/audit, thus enabling competition in that sphere. Thus decentralized exchanges will be ones which will end up with fittest companies and fittest verification/rating/audit services.

That's how evolution works.

[burnside]

The motion system is now live.  Please note that you'll want to make sure you have your account timezone set properly when scheduling votes. 

I built it pretty fast.  Please let me know if you run into any issues!

Cheers.

[burnside]

    * Funds will not be allowed to invest in other funds.  If a fund is caught investing in another fund your
      asset will be frozen until the issue is rectified.  In extreme cases assets will be subject to delisting.

<In Palpatine's voice> Good.

With each such arbitrary restriction we are closer to decentralized exchanges. Centralized ones shot themselves in the foot: they inhibit survival of the fittest. Eventually they'll turn to the ghettos...

At the same time decentralized ones will effectively decouple trading itself from services like verification/rating agencies/audit, thus enabling competition in that sphere. Thus decentralized exchanges will be ones which will end up with fittest companies and fittest verification/rating/audit services.

That's how evolution works.

We'll fix the wording so that it prevents what it is intended to prevent.

Open transactions will not prevent what we are trying to prevent.  I would respectfully ask that if you're not going to contribute in a positive way you find somewhere else to waste your time.

[burnside]

What happens to LTCI? It was going to invest into LTC-ATF according to contract.

I see nothing wrong with it as long as there is no contract violation (i.e. if fund said it won't invest into other funds it shouldn't).

The problem is when two securities invest in each other.

I agree, the text needs re-worded.  But when two securities invest in each other they effectively prop up each other.  Then when one fails, both fail.  Add about 10 more into the mix, all failing at once, and you get the GLBSE.

[killerstorm]

Open transactions will not prevent what we are trying to prevent.  I would respectfully ask that if you're not going to contribute in a positive way you find somewhere else to waste your time.

Well. Do you know that public companies are required to notify investors about long-term risks to their business? (Particularly, in fillings... Form 10-K or something like that.)

For example, Microsoft mentioned that Linux is a potential threat to their OS business.

What I'm saying is that decentralized exchanges might be a threat to your business. This is in fact very relevant to LTC-GLOBAL the stock long term price target...

Or did you expect that people would only give your company praises? That's not how it works.

[Deprived]

The motion system is now live.  Please note that you'll want to make sure you have your account timezone set properly when scheduling votes. 

I built it pretty fast.  Please let me know if you run into any issues!

Cheers.

Am testing it now with a motion on LTC-ATF.

The motion was essentially that my investors believe that the motion system is working.

I then voted "NO" with the actual asset-issuing account.  If the 99,000 unissued units get to vote then it obviously is NOT working.  If the vote from them is ignored (as it should be) then the motion might pass

[burnside]

The motion system is now live.  Please note that you'll want to make sure you have your account timezone set properly when scheduling votes. 

I built it pretty fast.  Please let me know if you run into any issues!

Cheers.

Am testing it now with a motion on LTC-ATF.

The motion was essentially that my investors believe that the motion system is working.

I then voted "NO" with the actual asset-issuing account.  If the 99,000 unissued units get to vote then it obviously is NOT working.  If the vote from them is ignored (as it should be) then the motion might pass

LOL, I saw that.  Thanks for catching that!  Should be fixed now.   

[burnside]

Open transactions will not prevent what we are trying to prevent.  I would respectfully ask that if you're not going to contribute in a positive way you find somewhere else to waste your time.

Well. Do you know that public companies are required to notify investors about long-term risks to their business? (Particularly, in fillings... Form 10-K or something like that.)

For example, Microsoft mentioned that Linux is a potential threat to their OS business.

What I'm saying is that decentralized exchanges might be a threat to your business. This is in fact very relevant to LTC-GLOBAL the stock long term price target...

Or did you expect that people would only give your company praises? That's not how it works.

That's constructive criticism.  There was a definite change in the tone of your post.  I'm fine with that and outright encourage it.  I also highly encourage anyone posting facts that are informative and helpful to keep investors from getting the shaft on any one of the forum topics covering LTC-GLOBAL securities.  We NEED that.

Cheers.

[Deprived]

Cross-post form my own asset's thread:

I fixed your 'NO' vote.   

There was a bug where asset issuers were able to vote with their non-outstanding shares.

Cheers.

Yeah, guessed that was the case - only issued the motion to test the system.  Next one I'm gonna try is voting with the shares on my personal account, sending them back to main asset, returning them to my personal account and seeing if they get to vote again

Not sure how you do voting - if you just add up votes when someone clicks the vote button then you'll have same problem GLBSE has (you can end with more votes than shares - and by transferring shares the votes can be rigged).  Way i THINK you should do it is to register the vote for the person voting - and only convert it to actual share-votes when the motion ends (based on whatever shares they hold at that time).

Cross-posting this to your thread for the exchange in case you miss it here.

[burnside]

Cross-post form my own asset's thread:

I fixed your 'NO' vote.   

There was a bug where asset issuers were able to vote with their non-outstanding shares.

Cheers.

Yeah, guessed that was the case - only issued the motion to test the system.  Next one I'm gonna try is voting with the shares on my personal account, sending them back to main asset, returning them to my personal account and seeing if they get to vote again

Not sure how you do voting - if you just add up votes when someone clicks the vote button then you'll have same problem GLBSE has (you can end with more votes than shares - and by transferring shares the votes can be rigged).  Way i THINK you should do it is to register the vote for the person voting - and only convert it to actual share-votes when the motion ends (based on whatever shares they hold at that time).

Cross-posting this to your thread for the exchange in case you miss it here.

Awww man.... you're spot-on.  I'm storing vote counts when you click.  You can't vote twice on the same motion, but you could vote, then transfer, and that person could vote on the same shares.  Will fix that ASAP.

[Deprived]

Cross-post form my own asset's thread:

I fixed your 'NO' vote.   

There was a bug where asset issuers were able to vote with their non-outstanding shares.

Cheers.

Yeah, guessed that was the case - only issued the motion to test the system.  Next one I'm gonna try is voting with the shares on my personal account, sending them back to main asset, returning them to my personal account and seeing if they get to vote again

Not sure how you do voting - if you just add up votes when someone clicks the vote button then you'll have same problem GLBSE has (you can end with more votes than shares - and by transferring shares the votes can be rigged).  Way i THINK you should do it is to register the vote for the person voting - and only convert it to actual share-votes when the motion ends (based on whatever shares they hold at that time).

Cross-posting this to your thread for the exchange in case you miss it here.

Awww man.... you're spot-on.  I'm storing vote counts when you click.  You can't vote twice on the same motion, but you could vote, then transfer, and that person could vote on the same shares.  Will fix that ASAP.

Thanks - saves me testing that

[burnside]

I have to track the votes as they're made to show a real-time tally, but I have set it up so that when the motion ends (and at regular intervals while it is open) it will iterate back through all the votes, tally the shares held at that time, and do a vote count update.

BTW... I didn't realize GLBSE was that broken.  That's horrible and not all that hard to fix.

Cheers.

[burnside]

New working version of the anti-incest clause:

* Securities holding long term investments are not to invest in other long term investment securities on LTC-GLOBAL.  (long term = holding assets greater than 30 days.)
* Securities created by the same issuer or organization, or in collusion with the issuer or organization are not to invest in each other on LTC-GLOBAL.
* Long-term investment securities are not to invest more than 20% of their portfolio into any other single security on LTC-GLOBAL.
* Long-term investment securities are not to own more than 20% of the outstanding shares of any other single security on LTC-GLOBAL.
* Securities on LTC-GLOBAL are allowed to invest in other securities outside LTC-GLOBAL without restraint.  Buyer beware.  (No way we could police this unfortunately...)
* If found in violation of these rules, you will be given a warning and will have 7 days to come into compliance.  If you do not comply your asset will be delisted.
* If repeatedly found in violation of these rules and you have received more than 3 warnings your asset will be delisted.

Please poke holes in it.   

[killerstorm]

Wouldn't it be better to just demand transparency?

If a LTC-GLOBAL security issuer invests more than x% into another LTC-GLOBAL security and holds this position for at least Y days, it MUST make details of trade open.

This way people can take this into account in their pricing computations. If they want to invest into incestuous ponzies, it's their right.

Failure to disclose should be punished. Perhaps you can also recommend disclosing positions on external exchanges, at least for funds.

If LTCI invests in LTC-ATF, there is nothing wrong with it: it's in contract. If LTC-ATF then day-trades on LTCI, nothing wrong either, at least if LTC-ATF is only a fraction of LTCI's holdings.

If LTC-ATF will hold a lot of LTCI shares it might be a problem, but it's also a violation of LTC-ATF's contract.

You can make a separate page with a list of positions which have to be disclosed. Then people can compute indirect ownership. (It's not trivial: company X might own parts of Y and Z which will own W which will invest into X. To solve this you need to solve a system of linear equations... I once implemented this for a large holding company.)

If people will detect "incestuous" relationship they can notify the public...

So it can be effective anti-pump&dump, no?

[Deprived]

Wouldn't it be better to just demand transparency?

If a LTC-GLOBAL security issuer invests more than x% into another LTC-GLOBAL security and holds this position for at least Y days, it MUST make details of trade open.

This way people can take this into account in their pricing computations. If they want to invest into incestuous ponzies, it's their right.

Failure to disclose should be punished. Perhaps you can also recommend disclosing positions on external exchanges, at least for funds.

If LTCI invests in LTC-ATF, there is nothing wrong with it: it's in contract. If LTC-ATF then day-trades on LTCI, nothing wrong either, at least if LTC-ATF is only a fraction of LTCI's holdings.

If LTC-ATF will hold a lot of LTCI shares it might be a problem, but it's also a violation of LTC-ATF's contract.

You can make a separate page with a list of positions which have to be disclosed. Then people can compute indirect ownership. (It's not trivial: company X might own parts of Y and Z which will own W which will invest into X. To solve this you need to solve a system of linear equations... I once implemented this for a large holding company.)

If people will detect "incestuous" relationship they can notify the public...

So it can be effective anti-pump&dump, no?

Problem with only having transparency is that its no use after you're invested.  e.g :

Asset owner runs 2 companies A and B with no investment etc in one another.

You invest in company A.
Companies A and B then do a share-swap of a large chunk of shares.
The asset owner can now control motions and fix the share prices - plus maybe you didn't invest in B because you don't believe its business will be profitable.

How does transparency help you?  It maybe makes it more obvious that you're screwed - but you're screwed nonetheless.

Now you could argue that companies A/B shouldn't be allowed to do a share-swap - but most contracts on here have very little restriction in them in terms of what the asset owner can do with handing out shares/trading them.

Where I agree with you to an extent is that there should likely be an additional part to the rules - that those restrictions can be waived in certain circumstances provided that:

1) The details of the proposed exemption are posted (either here or on LTC forums),
2) Share-holders are notified of the request,
3) No significant portion of shareholders (say no more than 10%) object - which can be verified by motion if necessary.
4) The exchange operator agrees.

So if someone has a genuinely good reason why they need a long-term exemption then they should clearly explain why they need it, how it benefits (or at least doesn't harm) their investors, why no conflict of interest arises from it and any other information of relevance.  By allowing well-reasoned exemptions, just about all problems with the rules vanish - as where some restriction doesn't make sense for your specific business, you have the option to explain why.  And if people can't properly explain WHY something makes sense for their investors (rather than just for themselves) then I'd rather they didn't run a company at all tbh.

[burnside]

I'm all for voluntary transparency.  Requiring it though would be impossible to enforce.

And even if you were successful enforcing it... Even the most responsible asset issuers would still cross-invest (usagi), disclose it (usagi), eventually tank, (usagi's getting there) and ultimately take down the exchange anyway.

I watched cross-investment behavior take down wall street in 2007 and watched it take down GLBSE in 2012.  That crap just doesn't work and even if it's transparent, people don't know what to watch for.