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Author Topic: The only remaining interest bearing instruments in BTC world.  (Read 1019 times)
MPOE-PR
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September 16, 2012, 02:36:58 PM
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I. MPOE Bonds.

These are used to finance the capital needs for the options trading better half of MPEx. Their functioning is described in detail here (look for the section on bonds), but in short: investors put up capital in chunks no less than 50 BTC, for which they ask whatever arbitrary interest rate they want. All BTC must be deposited before the start of an option month (they start/end on the last Friday of each month) and is locked down for the duration of that month. At the end of this interval, the total capital requirements for the month is calculated retrospectively and bonds are accepted up to that level. All accepted bonds are paid the highest interest rate asked for an accepted bond (which becomes the new MPBOR - for the past few months around 5%). Unaccepted bonds are paid nothing (but yes, they were locked down for the interval). Should the options bot have made a net loss during that month, that loss will be allocated to the accepted bonds, on a proportional basis.

You can review past exercises either on Mircea Popescu's blog (look for "MPOE, rezultate" month-year) or else in this btctalk thread. At this point the system has been working officially for about 7 months and informally for about one year. The worst hit investors took to date was ~48% last month, confirming earlier projections as to what a "worst case scenario" would look like. Other than that lossy exercises are actually rare.

A perk for the average forum user is probably the fact you don't actually need an MPEx account to participate.

II. The MPCD series.

This is a typical tranched CDO; you can review the full details including composition and payment schedules here. Tranche A  pays 2% a month, tranche B 3% and tranche C over 9%. Due to the capital structure (350 + 400 + 350 BTC) A's are safe even if the series loses about 750 BTC, so this should count as a very safe investment.

You do need an MPEx account to directly buy/hold these, but if you don't have one you can probably work out a reasonable deal with one of the MPEx brokers.

I am aware that there are other concoctions which purport to be interest bearing, but they are either mystery cake or else more or less managed funds of GLoBal Scam Exchange "investments". Neither of these have been ever, in the entire history of BTC, anything else than pain for the actual investor (ie, he who expects a positive return on his capital along with his capital), and as such if you aren't terribly new around here, the correctness of the title should be obvious to you.

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Chang Hum
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September 16, 2012, 02:57:32 PM
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That bird in your avatar is one ugly fucker lol
ciuciu
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September 16, 2012, 04:13:07 PM
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You are quite a smart man. Nobody can mix child porn and finance like you. You are the teacher bitcoin community needs at this moment. All hail, porno Mircea!

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