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Author Topic: Critique of the various businesses run by usagi  (Read 5218 times)
Deprived
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October 03, 2012, 08:20:40 PM
 #1

[Local Rules : Anyone can post in this thread, even people who are confused over their gender, can't do basic math, view failure as doing well and in general lack any idea of how to run a business]

GIVING AWAY MONEY

Think this shows just how dumb usagi is.

If you are a large investor I will give you 10% off shares of NYAN.A or BMF. I am desperate to make this work and I think that you can see that with the way I am backing this with my own personal money. I have absolutely no intention of giving up and I will fight for my companies till  the very end.

Now let's think about this.

Nyan.a's contract specifically commits that CPA/nyan will maintain a bidwall at .99 for nyan.a.

nyan.a shares sell at 1 BTC.

10% off 1 is .9

So usagi is offering to sell nyan.a shares at 0.9, having offered a guarantee to buy them back at 0.99.  That smells like giving away money for free to me.  Buy at 0.9, list at .99, wait for contractual obligations to be fulfilled, rinse and repeat.

Or is the 10% off some imaginary RMV?

And who foots the bill for that 10%?  The investors?  CPA?

-------

Coming next post : Guarantee?  What guarantee?

Note: I have decided to cease posting in usagi's own threads.  I don't believe local rules banning me are wise, should be enforced or are in the interests of usgai's investors.  However if usagi won't respond to them then they DO end up effectively being trolling.  I would encourage any investors in usagi who believe any points I raise merit answer to ask the questions themselves - then, maybe, you'll get an answer.  I expect usagi to answer THIS post but not the next.
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October 03, 2012, 08:46:50 PM
 #2

QUOTE OF ENTIRE POST

Quoting entire post - just so everyone can see what I was responding to in case it changes.

BMF -- CPA -- NYAN
October Special Letter to Shareholders
by: Usagi


Dear Investor;

  My name is usagi, and as you know I run three separate companies on the GLBSE:

1. BMF -- Bitcoin Mining Fund -- a sector fund which only invests in mining securities and mining hardware.
2. CPA -- The Bitcoin Insurance Company
3. NYAN -- Nyancat Financial, a CDO-like general market fund.

In this letter I would like to address many of the concerns people have raised recently about the businesses I run and reassure investors of my plan for the future.

The first and most obvious question is, "what the hell is going on!" but I think to understand that, you will need to know what happened. So I'll start there.

First, BMF.
Back in may/june, I launched BMF as my flagship business. We raised around 1500 bitcoins. However, we were fighting an uphill battle as a sector fund investing in mining. The difficulty was rising by solid percentage points each week, and the USD/BTC price kept rising.. and rising.. and rising. BMF did well considering the value of our hardware. When BMF IPO'd, we started at 1 BTC a share. 1 BTC was worth $5 and a single was worth $599. In other words, one share of BMF was worth 1/120 of a Bitforce FPGA single. If one bitforce single was 832 mh/s, that means one share of BMF produced income valued at around 6.9 mhash/share. GIGAMINING, to compare, produced income corresponding to 5mhash/share.

As the weeks turned into months, the bitcoin price steadily rose. Today, one bitcoin is worth $12.70 and as a result the price of BMF has fallen. It's true that BMF has lost money in terms of bitcoins, but look at the reality of the company's operation: At 0.48/share today, 1 share of BMF is now worth $6.10 -- this means one share of BMF is now worth 1/100 of a single. By careful trading and expansion, we increased the intrinsic value of BMF -- we increased our effective hardware under management (via ownership in funds).

In other words, while bonds like GIGAMINING are still worth 5mhash/share today, BMF went from 6.9mHash/share to 8.47mHash/share. We gained. I know it doesn't look like it, but we did a LOT better than mining bonds. We did what any normal company would do.

But the exchange rate placed BMF in a difficult situation. Many people believed we lost tons of money -- this was not true. We were simply exposed to exchange rate risk because we invested entirely in mining. ALL mining stocks went down. GIGAMINING went from 1.50 to .55. We went down from 1 to .50. So yes, from the standpoint of bitcoins, we did in fact lose money, just like everyone else. And I'm sorry, but that does not make me a scammer.

If the USD/BTC price stays the same or goes down, BMF will go up in bitcoins. The BTC price cannot rise forever.

So, what the hell is going on with BMF? It's simple. Nothing. We're plugging along, paying divs and reinvesting. BMF has a bright future ahead of it. And, what's more, I have a very special suprise for BMF investors going forward, which I will tell you later on in this article. But first, let's talk CPA.

CPA
After I launched BMF, I was excited at the prospect of launching a "real business" on the GLBSE. So I got together with some of my investor buddies online and I launched CPA. CPA was a great idea, it really was. We sold about 2,500 BTC worth of shares. Maybe 3,500 -- somewhere in that range. The problem with CPA is that no one would trust us. After a couple of weeks it became apparent that we couldn't sign any contracts because everyone thought I was a scammer. Here I was, the new kid on the block, with BMF and CPA and 5,000 coins of other people's money. So I spoke with the members of CPA's round table and we came up with a plan. First, we would invest into the community.

We put the money into the following areas:
1,000 bitcoins into BMF
500 bitcoins with Patrick harnett (Starfish Bank)
500 bitcoins into Gamma Bitcoin Fund
500 bitcoins with Hashking
500 bitcoins with Imsaguy's EIEIO fund.

It looked something like that.

Magically, as soon as we did that, we started signing contracts -- a lot of contracts! We signed a few thousand (bitcoins worth of) contracts for Pirate. One particular contract with ciuciu was valued at over 2,000 coins. Another with kakobrekla was worth over 1,100 coins. We had many smaller contracts as well. Due to the extreme popularity of pirate insurance, we decided to cancel all existing contracts (except Kakobrekla's) and start YARR.

First, why we didn't cancel kakobrekla's contract. The idea was that we would risk 1,000 bitcoins on insuring pirate. If pirate blew up, we were planning to pay, and come out as the heroes of the day. I truly believed that if I paid that money, everyone would love CPA and sign contracts with us. It was a calculated risk. I told myself that it would be the best free advertising we could ever buy.

ok, so YARR. We sold 2,800 shares of YARR at 1.5 bitcoins per share.

Then about a month later pirate collapsed. What did we get out of YARR? We lost 100 bitcoins. not a huge amount. We basically bought back all the shares. There's still 30 or 40 out I think, some small number. People are holding out trying to sell at 1.20 and up. Well, what can I say. A contract is a contract, they will be bought out at 1. So overall YARR was another way that CPA proved we could be trusted. We bought back 2,800 bitcoins worth of YARR shares.

And we paid out 1100 to Kakobrekla as well.

We saved asses, there is no doubt. We saved people's ass big time. BIG TIME.

But then something terrible happened. Gamma bitcoin fund was in trouble because of JRO. DeadTerra shut down withdrawls for 2 weeks. During this time, GBF started to lose more and more money. When we finally got back the funds, there wasn't even 400 left in CPA's account, and we had to trade for assets. We were hurt but it wasn't major.

Then Hashking blew up.

Then Imsaguy blew up.

We managed to get 400 out of Starfish Bank, bless Patrick's immortal soul, but the last 100 (which is the last 100 we owe, to Kakobrekla) cannot be repaid (until who knows when?)

All of the people I just mentioned, incidentally, are doing their best to pay us back. We have recieved payments (some recent, some not) from all of them. The point is that CPA does not have the money NOW. As a result we have set ALL of the money we held with them to zero.

So what's left? CPA has less than 40,000 shares outstanding, and here are our assets:

1,213 shares of BMF
1 share of YARR
283 shares of NYAN.C
604 shartes of OBSI.HRPT

In the end, the only thing we have of value in CPA is the mining fund I run myself. So all in all, CPA is worth about 0.02 per share right now.

Now let's talk NYAN briefly, before I explain to you what my plan is for the future.

Nyancat Financial. Ahh, the magic of a CDO. NYAN.A is fully insured and guaranteed by CPA. When investots demanded OUT, I sold assets and bought back over 450 shares of NYAN.A and over 700 shares of NYAN.B in just 2 weeks. But I am not superman. And many NYAN investors want to know what is going on. It's simple, the market is crashing, and while we do our best nothing can stop a general market fund from tanking when the general market is tanking.

That being said, the NYAN funds are doing suprisingly well. Except for NYAN.C, which was basically 50% pirate and 50% OBSI.HRPT. Both of them crashed, so NYAN.C is worth zero. In almost every NYAN letter to shareholders I cautioned people against investing too much into NYAN.C -- let's hope they listened. What does the NYAN.C contract say?

Investments are chosen entirely based on their interest rate without regard to the risk profile.

Well, I am sorry that pirate and obsi and V.HRL and BIF.LOANS and god knows what all crashed. I provided you the chance to invest in a diversified portfolio of risky-risky securities. Nothing like that existed on the market. Unfortunately it turned out to be a bad investment choice, however there is hope. Hope for NYAN as well as for CPA, which I will explain in a moment, in my plan for the future.

So, what about NYAN.B? Well when FPGAMINING and JRO's ventures (BDT, REBATE, and ZIP.A) all crashed, we lost over 100 bitcoins. So I transferred assets from .C into .B and tried to sell them down. I also transferred some of .C's assets to .A. I was luckily able to sell all the high risk assets in A, and now A has no high risk assets. But .B had to take risky assets from .C, and there simply was no time to deal with the situation. I was faced with multiple defaults, all at the same time:

1. BDK.BND crashed
2. FPGAMINING crashed
3. UDN went to zero (BMF went down from .60 to .50)
4. Goat's assets were delisted (we had 25 BTC of goat's TYGRR.BOND-A in NYAN.A)
5. OBSI.HRPT started crashing
6. The market crashed in general and stuff got sold down

There was almost nothing I could do -- nowhere I could invest that was not blowing up. NYAN.B is mandated as follows:

Investments are chosen entirely based on sector; we seek to invest in the bitcoin community at large; but again, no mining, and no pirate.

Basically, NYAN.B is the middle of the road, company fund. We invest in Satoshidice, we invest in BitVPS. We invest in Bitcoin Racing Syndicate. Feedzebirds advertising agency. We invest in lots of stuff like that. A lot of these companies are doing OK but for some reason the market is trashing them. FZB for example, IPO'd at 0.1 -- today it is worth 0.02, much like CPA. But there's nothing wrong with FeedZeBirds. One of the guys who runs it (Erik) also runs SatoshiDice. On September 27th just 5 days ago there was news that Ira was hiring a developer to work on a new webpage, and that FZB would partner or be integrated with coinapult. So why did the market sell them down? We really don't know. But that is why NYAB.B is having trouble -- because honest, good companies are being sold down and we are suffering the consequences.

Many people are upset that "usagi is stealing money" or "scamming". Nothing could be further from the truth. We invested good money in companies like Feed Ze Birds -- we invested over 100 bitcoins in them. And now they are being sold down. It's not our fault, and we honestly believe there is value in Feed Ze birds and many of our other investments. We are simply caught in a crashing market, and there is nothing we can do. Or is there?

Usagi's Plan for the Future

This is the part you have been waiting for. This is what is going to make everything right -- even the stuff that isn't our fault.

Right now, it should be obvious that I have staked everything on one cental point -- BMF.

CPA owns over 1,200 BMF.

NYAN.A owns over 1,000 BMF.

I also own, personally, 800 shares of BMF (250 of which are non-saleable management fee shares). My personal ownership is being mentioned because it will play a part in my plan.

So here's the plan. CPA is still in operation. Based on our NAV of 0.02, we are making around 2% a week on our BMF holdings. I know that CPA has lost a lot of money but it has a FUTURE. We are in talks now for some major contracts, and we still have contracts with Luceo's VPS, and several other customers. CPA has a future. CPA is making money, and although it would be foolish for us to pay a dividend in this situation CPA is by no means out of the picture. We will FIGHT. We will WIN. We will persevere. That is that. News of CPA's demise is laughably premature.

CPA is going to be a big company someday. Mark my words.

And what of NYAN? NYAN.C is worthless now, isn't it? No, not really. Notice how NYAN.A holds over 1,000 BMF shares. That provides an income of 10 BTC a week or more. This alone is about enough to pay the dividend on NYAN.A and have funds overflow into NYAN.B. And it isn't like NYAN.B doesn't make any money. Slowly but surely, we will rebuild NYAN.B, and overflow into NYAN.C. Those shares which were worthless? They'll still pay dividends. It won't be easy, but I am staking NYAN's future, as well as CPA's on BMF. I just can't trust the money with anyone else.

What about NYAN.B? Now is the time to close NYAN.B. Let's agree to quit while we're ahead. NYAN.B has assets which are very close to 1-- hopefully close enough to allow investors to get out cleanly. Since inception, NYAN has paid more than .13 bitcoins of interest per share. That is substantial. Investors might not get 1 bitcoin if OBSI.HRPT goes to zero, but if we can sell out at current prices .95 is not out of the question. So NYAN.B is under aggressive buyback right now. It's NOT expanding. Please don't sell your NYAN.B too cheaply! Remember, it recieves income from NYAN.A beyond the 1% NYAN.A makes.

Now, NYAN.A. NYAN.A is the KEY to ALL of Nyan. Read this NEXT part VERY carefully because it is VERY VERY IMPORTANT.

Right now, as of right now, NYAN.A has 956 shares outstanding and owns (among other assets) 1026 shares of BMF. These BMF shares pay about 0.01 per share per week.

That means NYAN.A does not actually need any other asset to support it's dividend, just the extant shares of BMF. For the record however, BMF is only about 50% of the portfolio of NYAN.A. So NYAN.A generates considerable overflow into NYAN.B and NYAN.C. Our plan for NYAN is to use this overflow to buy back shares of NYAN.B and support NYAN.C shareholders. This plan will work, but it may take up to 3 or 4 months.

Now, BMF.

BMF is really the key, isn't it? Everything now depends on BMF.

In order to make this work I have to make an effort to defend the share price of BMF at .50 per share. This will be difficult as the price of bitcoins is continuing to rise and ALL ASSETS. ALL BUSINESSES will decline in price. But I will try. I will make one last effort, one great, giant last stand.

The first act I will perform is to voluntarily return the 250 management shares of BMF that I own. This will raise the value of BMF to over .50 bitcoins and encourage people to invest in BMF.

Seconly, tomorrow morning I will buy 200 bitcoins on mtgox (well, I will buy them on friday, tomorrow I will wire the money). I control via personal account and funds:

1026 BMF in NYAN.A
1213 BMF in CPA
 963 BMF in my personal account (250 of which are management shares).

There are currently 5,132 outstanding shares of BMF. This means that I control 3202/5132 of the fund. After I return my management fee shares I will 'control' 2952 shares of 4882. In other words, /other people/ own 1,930 shares of BMF. 200 bitcoins will currently buy 400+ shares of BMF; just over 20% of what other people besides myself have.

These 200 bitcoins will be used in 2 ways:

1. I will order two Bitforce FPGA singles for BMF;
2. I will defend the price of BMF at .50 per share (or .49 until BMF starts selling shares to buy hardware).
3. I will loan the rest of my current personal stake in BMF (~750 shares) to NYAN to defend the price of NYAN.A and NYAN.B along with CPA.

I believe this push will encourage people to invest in BMF. As BMF gets more and more hardware, it will increase in value and in cashflow and it will help NYAN to buy back NYAN.B and support NYAN in general; it will also help CPA grow.

I have staked everything on BMF. I'm pouring my heart into this. I am transferring my management fee shares back as we speak.

The value of BMF is now decidenly over .50 per share. NYAN.A, B and C have a future. CPA has a furture. BMF has a very bright future.

I hope you are with me on this. I will defend BMF because it is the right thing to do. Please recognize I am doing my best here and that a crashing mining market really is not my fault.

If you buy shares of BMF or NYAN.A it will help me. I will do my best for you as my shareholder. If you have any questions or comments, please e-mail me at bmf@tsukino.ca.

If you are a large investor I will give you 10% off shares of NYAN.A or BMF. I am desperate to make this work and I think that you can see that with the way I am backing this with my own personal money. I have absolutely no intention of giving up and I will fight for my companies till  the very end.

BMF: CAMELOT LIVES! We will get thru this! One way or another!

---

one last thing. It's 4:12 AM right now. 4am, 5am every night. I don't know how this keeps happening but my schedule is ruined. I'm really tired from all this. I've been working and communicating with people a lot on here recently. Please stop calling me a scammer ok? I really don't make much money for the work I do, and now that I have given up my management fees I make nothing. If it is really not obvious to you that I'm not a scammer then anything is a scammer. milk is a scammer. Ok? So i'm not a scammer. I have a job too, so I need to go to sleep. This letter is going to have to last you quite a while. I need to focus on my work now because this has been draining me. And after all who do you think is going to pay for the 200 bitcoins I am buying tomorrow. So give it a rest please.
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October 03, 2012, 09:05:47 PM
Last edit: October 03, 2012, 09:30:34 PM by Deprived
 #3

GUARANTEE?  WHAT GUARANTEE?

One of the (on the surface) appealing features of nyan.a is that its value is guaranteed to shareholders not to fall below 1.0 BTC per share.  This is described in the contract as:

"The value of NYAN.A shares is guaranteed by CPA and NYAN against capital loss via the reasonably timely maintenance of a bidwall at 0.99 bitcoins per fund unit."

There are THREE seperate very good reasons why this guarantee is meaningless.  I'll ignore nyan for now (its current assets are essentially just some BMF share) and discuss CPA.

REASON ONE (fairly minor one in fairness):

CPA is currently unable to maintain the bid-wall DESPITE there actually being little reason to sell nyan.a right now (other than the one detailed in this post).  There have been Asks up for days now which aren't honoured despite usagi being well aware of that.  Now I DO believe that usagi will clear those asks when it gets funds near the weekend - but clearly CPA doesn't maintain sufficient liquidity to cover its obligations.

REASON TWO (Pretty massive one):

The test of a party's willingness to honour their obligations is how they've behaved in the past.  Ideally we'd like to look at some other situation where one of usagi's companies was insure by CPA.  Luckily we can - all the gory details are here :

https://bitcointalk.org/index.php?topic=113708.msg1229467#msg1229467

In brief, CPA (usagi) insured BMF (usagi) against BMF losing NAV.  When BMF lost NAV (usagi's special area of expertise) the insurance policy was not discussed, claimed upon or mentioned again.  If usagi didn't honour the policy with BMF why should anyone believe (an even less formal) guarantee for nyan.a

REASON THREE (Pretty huge as well)

In usagi's latest fairy-tale, it says:

So what's left? CPA has less than 40,000 shares outstanding, and here are our assets:

1,213 shares of BMF
1 share of YARR
283 shares of NYAN.C
604 shartes of OBSI.HRPT

In the end, the only thing we have of value in CPA is the mining fund I run myself. So all in all, CPA is worth about 0.02 per share right now.

So, let's get this clear:

Half (roughly) of nyan.a's holdings are BMF.
Nyan.a is insured by CPA.
CPA's only assets of any note are BMF.

So if BMF collapses/largely devalues (through mismanagement, theft, a big drop in mining profitability or whatever) - WHERE does CPA get the funds from to cover its guarantee?  You CAN'T meaningfully insure something if the insurance is covered by the very thing that is insured.

Even in the event of a fairly small drop in BMF value it would become impossible for CPA to liquidate its BMF holdings to honour its guarantee.

You'd think usagi would have learned this lesson after the pirate fiasco - where the funds covering the insurance turned out to, in some cases, be with pirate (this is NOT an accusation against usagi in respect of that - I DO believe usagi was misled by those with whom it deposited in some cases).

Not only is this sort of insurance cover wrong and meaningless - it's also specifically against the contract of CPA.  I quote:

"5d. limited segregatability (de-risking sector default/widespread default)
To mitigate the risk of the default of an entire sector, THE CPA will seek to issue no more than 25% of it's coverage to any particular sector and will and to not insure assets using other assets from the same or similar sector. For example, we will avoid securing assets of a mining company with assets from other mining companies. In cases where this is unavoidable we will limit segregatability to pay claims on a first-come-first-serve basis, with the actual contract holders for the default event taking first priority. "

Now, inadvertently ending up in this situation is NOT (of itself) a breach of the contract.  But CPA SHOULD be acting to get its funds properly segregated quickly - right now EVERY insurance policy it has out rests on a single asset (BMF) which doesn't exactly have a stellar record of growth expressed in BTC.  And, whine all you want, about how it's gained in USD - how many of CPA's insurance policies are denominated in USD? (I could be wrong here - it may well be that CPA actually doesn't have any/many other policies out).

But it does raise the question:  WHEN did CPA's holdings in BMF go over 25%?  HOW did they get to nearly 100% without it ever being noticed?  Has CPA actually been BUYING more BMF even after it had passsed its own 25% rule?

SUMMARY : the "guarantee" is meaningless.  CPA doesn't maintain the liquidity to honour it, didn't honour a similar guarantee for another usagi company and (in the most likely scenario of significant cover being needed - a drop in the value of BMF) would be totally unable to honour it due to no longer having the assets to do so even it wanted to.

Usagi is trying to put all its eggs in one basket:

BMF is really the key, isn't it? Everything now depends on BMF.

The eggs (BMF) are already scrambled - and the basket (CPA) is an illusion.
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October 03, 2012, 09:12:46 PM
 #4

[Local Rules : Anyone can post in this thread, even people who are confused over their gender, can't do basic math, view failure as doing well and in general lack any idea of how to run a business]

GIVING AWAY MONEY

Think this shows just how dumb usagi is.

In the case of Nyan, its.., braindead as you pointed out.
I dont believe Usagi is able to keep his 1 BTC buyback promise much longer. He is already not honoring the asks, and to use his own words: he is "desperate". Thats what you get when you buy the most worthless shit and fool yourself by falsifying your stats and constantly try to manipulate market prices, both of his own shares and other shares he owns to make those stats seem right. You buy paper value for a short while, but in the end you lose money. Lots of it.

Just over a week ago I calculated his actual NAV for all Nyans, and Nyan.A was in no imminent danger, it was only C which would be wiped out entirely and B would lose about 1/3 its NAV. Bad, but not catastrophic.  Today its getting so bad that B is in danger of being wiped entirely out if he actually did what his contract obliges him to (transfer assets from B to A to restore As NAV), or if he pushes ahead and liquidates and delists B before he full fulling his obligation to A holders. Both have the same effect, it would leave A with no credible protection.

In the case of BMF, there is another issue,  he risks diluting his existing shareholders. Well, he would be if he would actually sell those shares at 10% under NAV, which he wont, since he calculates NAV as GLBSE average * rand(1,10) + 10 / (atmospheric pressure in Tokyo + his shoesize) ^ his IQ. Despite his low IQ that still ends up way above any reasonable NAV estimate even after a 10% discount. IOW, he will probably not sell a single share to a large investor with an IQ bigger than his shoe size; but if he would, his existing shareholders should be pretty upset about it.

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October 03, 2012, 09:15:57 PM
 #5

QUOTE OF ENTIRE POST

Quoting entire post - just so everyone can see what I was responding to in case it changes.

BMF -- CPA -- NYAN
October Special Letter to Shareholders
by: Usagi


Dear Investor;

  My name is usagi, and as you know I run three separate companies on the GLBSE:

1. BMF -- Bitcoin Mining Fund -- a sector fund which only invests in mining securities and mining hardware.
2. CPA -- The Bitcoin Insurance Company
3. NYAN -- Nyancat Financial, a CDO-like general market fund.

In this letter I would like to address many of the concerns people have raised recently about the businesses I run and reassure investors of my plan for the future.

The first and most obvious question is, "what the hell is going on!" but I think to understand that, you will need to know what happened. So I'll start there.

First, BMF.
Back in may/june, I launched BMF as my flagship business. We raised around 1500 bitcoins. However, we were fighting an uphill battle as a sector fund investing in mining. The difficulty was rising by solid percentage points each week, and the USD/BTC price kept rising.. and rising.. and rising. BMF did well considering the value of our hardware. When BMF IPO'd, we started at 1 BTC a share. 1 BTC was worth $5 and a single was worth $599. In other words, one share of BMF was worth 1/120 of a Bitforce FPGA single. If one bitforce single was 832 mh/s, that means one share of BMF produced income valued at around 6.9 mhash/share. GIGAMINING, to compare, produced income corresponding to 5mhash/share.

As the weeks turned into months, the bitcoin price steadily rose. Today, one bitcoin is worth $12.70 and as a result the price of BMF has fallen. It's true that BMF has lost money in terms of bitcoins, but look at the reality of the company's operation: At 0.48/share today, 1 share of BMF is now worth $6.10 -- this means one share of BMF is now worth 1/100 of a single. By careful trading and expansion, we increased the intrinsic value of BMF -- we increased our effective hardware under management (via ownership in funds).

In other words, while bonds like GIGAMINING are still worth 5mhash/share today, BMF went from 6.9mHash/share to 8.47mHash/share. We gained. I know it doesn't look like it, but we did a LOT better than mining bonds. We did what any normal company would do.

But the exchange rate placed BMF in a difficult situation. Many people believed we lost tons of money -- this was not true. We were simply exposed to exchange rate risk because we invested entirely in mining. ALL mining stocks went down. GIGAMINING went from 1.50 to .55. We went down from 1 to .50. So yes, from the standpoint of bitcoins, we did in fact lose money, just like everyone else. And I'm sorry, but that does not make me a scammer.

If the USD/BTC price stays the same or goes down, BMF will go up in bitcoins. The BTC price cannot rise forever.

So, what the hell is going on with BMF? It's simple. Nothing. We're plugging along, paying divs and reinvesting. BMF has a bright future ahead of it. And, what's more, I have a very special suprise for BMF investors going forward, which I will tell you later on in this article. But first, let's talk CPA.

CPA
After I launched BMF, I was excited at the prospect of launching a "real business" on the GLBSE. So I got together with some of my investor buddies online and I launched CPA. CPA was a great idea, it really was. We sold about 2,500 BTC worth of shares. Maybe 3,500 -- somewhere in that range. The problem with CPA is that no one would trust us. After a couple of weeks it became apparent that we couldn't sign any contracts because everyone thought I was a scammer. Here I was, the new kid on the block, with BMF and CPA and 5,000 coins of other people's money. So I spoke with the members of CPA's round table and we came up with a plan. First, we would invest into the community.

We put the money into the following areas:
1,000 bitcoins into BMF
500 bitcoins with Patrick harnett (Starfish Bank)
500 bitcoins into Gamma Bitcoin Fund
500 bitcoins with Hashking
500 bitcoins with Imsaguy's EIEIO fund.

It looked something like that.

Magically, as soon as we did that, we started signing contracts -- a lot of contracts! We signed a few thousand (bitcoins worth of) contracts for Pirate. One particular contract with ciuciu was valued at over 2,000 coins. Another with kakobrekla was worth over 1,100 coins. We had many smaller contracts as well. Due to the extreme popularity of pirate insurance, we decided to cancel all existing contracts (except Kakobrekla's) and start YARR.

First, why we didn't cancel kakobrekla's contract. The idea was that we would risk 1,000 bitcoins on insuring pirate. If pirate blew up, we were planning to pay, and come out as the heroes of the day. I truly believed that if I paid that money, everyone would love CPA and sign contracts with us. It was a calculated risk. I told myself that it would be the best free advertising we could ever buy.

ok, so YARR. We sold 2,800 shares of YARR at 1.5 bitcoins per share.

Then about a month later pirate collapsed. What did we get out of YARR? We lost 100 bitcoins. not a huge amount. We basically bought back all the shares. There's still 30 or 40 out I think, some small number. People are holding out trying to sell at 1.20 and up. Well, what can I say. A contract is a contract, they will be bought out at 1. So overall YARR was another way that CPA proved we could be trusted. We bought back 2,800 bitcoins worth of YARR shares.

And we paid out 1100 to Kakobrekla as well.

We saved asses, there is no doubt. We saved people's ass big time. BIG TIME.

But then something terrible happened. Gamma bitcoin fund was in trouble because of JRO. DeadTerra shut down withdrawls for 2 weeks. During this time, GBF started to lose more and more money. When we finally got back the funds, there wasn't even 400 left in CPA's account, and we had to trade for assets. We were hurt but it wasn't major.

Then Hashking blew up.

Then Imsaguy blew up.

We managed to get 400 out of Starfish Bank, bless Patrick's immortal soul, but the last 100 (which is the last 100 we owe, to Kakobrekla) cannot be repaid (until who knows when?)

All of the people I just mentioned, incidentally, are doing their best to pay us back. We have recieved payments (some recent, some not) from all of them. The point is that CPA does not have the money NOW. As a result we have set ALL of the money we held with them to zero.

So what's left? CPA has less than 40,000 shares outstanding, and here are our assets:

1,213 shares of BMF
1 share of YARR
283 shares of NYAN.C
604 shartes of OBSI.HRPT

In the end, the only thing we have of value in CPA is the mining fund I run myself. So all in all, CPA is worth about 0.02 per share right now.

Now let's talk NYAN briefly, before I explain to you what my plan is for the future.

Nyancat Financial. Ahh, the magic of a CDO. NYAN.A is fully insured and guaranteed by CPA. When investots demanded OUT, I sold assets and bought back over 450 shares of NYAN.A and over 700 shares of NYAN.B in just 2 weeks. But I am not superman. And many NYAN investors want to know what is going on. It's simple, the market is crashing, and while we do our best nothing can stop a general market fund from tanking when the general market is tanking.

That being said, the NYAN funds are doing suprisingly well. Except for NYAN.C, which was basically 50% pirate and 50% OBSI.HRPT. Both of them crashed, so NYAN.C is worth zero. In almost every NYAN letter to shareholders I cautioned people against investing too much into NYAN.C -- let's hope they listened. What does the NYAN.C contract say?

Investments are chosen entirely based on their interest rate without regard to the risk profile.

Well, I am sorry that pirate and obsi and V.HRL and BIF.LOANS and god knows what all crashed. I provided you the chance to invest in a diversified portfolio of risky-risky securities. Nothing like that existed on the market. Unfortunately it turned out to be a bad investment choice, however there is hope. Hope for NYAN as well as for CPA, which I will explain in a moment, in my plan for the future.

So, what about NYAN.B? Well when FPGAMINING and JRO's ventures (BDT, REBATE, and ZIP.A) all crashed, we lost over 100 bitcoins. So I transferred assets from .C into .B and tried to sell them down. I also transferred some of .C's assets to .A. I was luckily able to sell all the high risk assets in A, and now A has no high risk assets. But .B had to take risky assets from .C, and there simply was no time to deal with the situation. I was faced with multiple defaults, all at the same time:

1. BDK.BND crashed
2. FPGAMINING crashed
3. UDN went to zero (BMF went down from .60 to .50)
4. Goat's assets were delisted (we had 25 BTC of goat's TYGRR.BOND-A in NYAN.A)
5. OBSI.HRPT started crashing
6. The market crashed in general and stuff got sold down

There was almost nothing I could do -- nowhere I could invest that was not blowing up. NYAN.B is mandated as follows:

Investments are chosen entirely based on sector; we seek to invest in the bitcoin community at large; but again, no mining, and no pirate.

Basically, NYAN.B is the middle of the road, company fund. We invest in Satoshidice, we invest in BitVPS. We invest in Bitcoin Racing Syndicate. Feedzebirds advertising agency. We invest in lots of stuff like that. A lot of these companies are doing OK but for some reason the market is trashing them. FZB for example, IPO'd at 0.1 -- today it is worth 0.02, much like CPA. But there's nothing wrong with FeedZeBirds. One of the guys who runs it (Erik) also runs SatoshiDice. On September 27th just 5 days ago there was news that Ira was hiring a developer to work on a new webpage, and that FZB would partner or be integrated with coinapult. So why did the market sell them down? We really don't know. But that is why NYAB.B is having trouble -- because honest, good companies are being sold down and we are suffering the consequences.

Many people are upset that "usagi is stealing money" or "scamming". Nothing could be further from the truth. We invested good money in companies like Feed Ze Birds -- we invested over 100 bitcoins in them. And now they are being sold down. It's not our fault, and we honestly believe there is value in Feed Ze birds and many of our other investments. We are simply caught in a crashing market, and there is nothing we can do. Or is there?

Usagi's Plan for the Future

This is the part you have been waiting for. This is what is going to make everything right -- even the stuff that isn't our fault.

Right now, it should be obvious that I have staked everything on one cental point -- BMF.

CPA owns over 1,200 BMF.

NYAN.A owns over 1,000 BMF.

I also own, personally, 800 shares of BMF (250 of which are non-saleable management fee shares). My personal ownership is being mentioned because it will play a part in my plan.

So here's the plan. CPA is still in operation. Based on our NAV of 0.02, we are making around 2% a week on our BMF holdings. I know that CPA has lost a lot of money but it has a FUTURE. We are in talks now for some major contracts, and we still have contracts with Luceo's VPS, and several other customers. CPA has a future. CPA is making money, and although it would be foolish for us to pay a dividend in this situation CPA is by no means out of the picture. We will FIGHT. We will WIN. We will persevere. That is that. News of CPA's demise is laughably premature.

CPA is going to be a big company someday. Mark my words.

And what of NYAN? NYAN.C is worthless now, isn't it? No, not really. Notice how NYAN.A holds over 1,000 BMF shares. That provides an income of 10 BTC a week or more. This alone is about enough to pay the dividend on NYAN.A and have funds overflow into NYAN.B. And it isn't like NYAN.B doesn't make any money. Slowly but surely, we will rebuild NYAN.B, and overflow into NYAN.C. Those shares which were worthless? They'll still pay dividends. It won't be easy, but I am staking NYAN's future, as well as CPA's on BMF. I just can't trust the money with anyone else.

What about NYAN.B? Now is the time to close NYAN.B. Let's agree to quit while we're ahead. NYAN.B has assets which are very close to 1-- hopefully close enough to allow investors to get out cleanly. Since inception, NYAN has paid more than .13 bitcoins of interest per share. That is substantial. Investors might not get 1 bitcoin if OBSI.HRPT goes to zero, but if we can sell out at current prices .95 is not out of the question. So NYAN.B is under aggressive buyback right now. It's NOT expanding. Please don't sell your NYAN.B too cheaply! Remember, it recieves income from NYAN.A beyond the 1% NYAN.A makes.

Now, NYAN.A. NYAN.A is the KEY to ALL of Nyan. Read this NEXT part VERY carefully because it is VERY VERY IMPORTANT.

Right now, as of right now, NYAN.A has 956 shares outstanding and owns (among other assets) 1026 shares of BMF. These BMF shares pay about 0.01 per share per week.

That means NYAN.A does not actually need any other asset to support it's dividend, just the extant shares of BMF. For the record however, BMF is only about 50% of the portfolio of NYAN.A. So NYAN.A generates considerable overflow into NYAN.B and NYAN.C. Our plan for NYAN is to use this overflow to buy back shares of NYAN.B and support NYAN.C shareholders. This plan will work, but it may take up to 3 or 4 months.

Now, BMF.

BMF is really the key, isn't it? Everything now depends on BMF.

In order to make this work I have to make an effort to defend the share price of BMF at .50 per share. This will be difficult as the price of bitcoins is continuing to rise and ALL ASSETS. ALL BUSINESSES will decline in price. But I will try. I will make one last effort, one great, giant last stand.

The first act I will perform is to voluntarily return the 250 management shares of BMF that I own. This will raise the value of BMF to over .50 bitcoins and encourage people to invest in BMF.

Seconly, tomorrow morning I will buy 200 bitcoins on mtgox (well, I will buy them on friday, tomorrow I will wire the money). I control via personal account and funds:

1026 BMF in NYAN.A
1213 BMF in CPA
 963 BMF in my personal account (250 of which are management shares).

There are currently 5,132 outstanding shares of BMF. This means that I control 3202/5132 of the fund. After I return my management fee shares I will 'control' 2952 shares of 4882. In other words, /other people/ own 1,930 shares of BMF. 200 bitcoins will currently buy 400+ shares of BMF; just over 20% of what other people besides myself have.

These 200 bitcoins will be used in 2 ways:

1. I will order two Bitforce FPGA singles for BMF;
2. I will defend the price of BMF at .50 per share (or .49 until BMF starts selling shares to buy hardware).
3. I will loan the rest of my current personal stake in BMF (~750 shares) to NYAN to defend the price of NYAN.A and NYAN.B along with CPA.

I believe this push will encourage people to invest in BMF. As BMF gets more and more hardware, it will increase in value and in cashflow and it will help NYAN to buy back NYAN.B and support NYAN in general; it will also help CPA grow.

I have staked everything on BMF. I'm pouring my heart into this. I am transferring my management fee shares back as we speak.

The value of BMF is now decidenly over .50 per share. NYAN.A, B and C have a future. CPA has a furture. BMF has a very bright future.

I hope you are with me on this. I will defend BMF because it is the right thing to do. Please recognize I am doing my best here and that a crashing mining market really is not my fault.

If you buy shares of BMF or NYAN.A it will help me. I will do my best for you as my shareholder. If you have any questions or comments, please e-mail me at bmf@tsukino.ca.

If you are a large investor I will give you 10% off shares of NYAN.A or BMF. I am desperate to make this work and I think that you can see that with the way I am backing this with my own personal money. I have absolutely no intention of giving up and I will fight for my companies till  the very end.

BMF: CAMELOT LIVES! We will get thru this! One way or another!

---

one last thing. It's 4:12 AM right now. 4am, 5am every night. I don't know how this keeps happening but my schedule is ruined. I'm really tired from all this. I've been working and communicating with people a lot on here recently. Please stop calling me a scammer ok? I really don't make much money for the work I do, and now that I have given up my management fees I make nothing. If it is really not obvious to you that I'm not a scammer then anything is a scammer. milk is a scammer. Ok? So i'm not a scammer. I have a job too, so I need to go to sleep. This letter is going to have to last you quite a while. I need to focus on my work now because this has been draining me. And after all who do you think is going to pay for the 200 bitcoins I am buying tomorrow. So give it a rest please.

The quoted post is so funny. Cheesy

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October 03, 2012, 09:20:33 PM
 #6


Not only is this sort of insurance cover wrong and meaningless - it's also specifically against the contract of CPA.  I quote:

"5d. limited segregatability (de-risking sector default/widespread default)
To mitigate the risk of the default of an entire sector, THE CPA will seek to issue no more than 25% of it's coverage to any particular sector and will and to not insure assets using other assets from the same or similar sector. For example, we will avoid securing assets of a mining company with assets from other mining companies. In cases where this is unavoidable we will limit segregatability to pay claims on a first-come-first-serve basis, with the actual contract holders for the default event taking first priority. "

Now, inadvertently ending up in this situation is NOT (of itself) a breach of the contract.  But CPA SHOULD be acting to get its funds properly segregated quickly - right now EVERY insurance policy it has out rests on a single asset (BMF) which doesn't exactly have a stellar record of growth expressed in BTC.  And, whine all you want, about how it's gained in USD - how many of CPA's insurance policies are denominated in USD? (I could be wrong here - it may well be that CPA actually doesn't have any/many other policies out).

But it does raise the question:  WHEN did CPA's holdings in BMF go over 25%?  HOW did they get to nearly 100% without it ever being noticed?  Has CPA actually been BUYING more BMF even after it had passsed its own 25% rule?


I am not sure you are applying this section correctly. The way I see it, this is dealing with *insurance* not *investments*. This section says that no more than 25% of the insurance policies sold will cover the same sector, however you want to define sector. The issue with BMF is more that all of CPA's investments (capital) is in one place. This is a huge red flag, a disaster waiting to happen, as you pointed out, but this section of the contract just does not apply.

The rest of what you said is good though.

CryptoNote needs you! Join the elite merged mining forces right now here in Fantomcoin topic: https://bitcointalk.org/index.php?topic=598823.0
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October 03, 2012, 09:23:50 PM
 #7


So, let's get this clear:

Half (roughly) of nyan.a's holdings are BMF.
BMF is insured by CPA.
CPA's only assets of any note are BMF.

Its even worse than that, CPA also insures Nyan.A.

NYAN ("the customer") will be indemnified (by CPA) against loss defined
   as a NAV (Net Asset Value) of NYAN.A less than 1 per unit.

http://www.tsukino.ca/cpa/customers/account-15/
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October 03, 2012, 09:29:44 PM
 #8


So, let's get this clear:

Half (roughly) of nyan.a's holdings are BMF.
BMF is insured by CPA.
CPA's only assets of any note are BMF.

Its even worse than that, CPA also insures Nyan.A.

NYAN ("the customer") will be indemnified (by CPA) against loss defined
   as a NAV (Net Asset Value) of NYAN.A less than 1 per unit.

http://www.tsukino.ca/cpa/customers/account-15/


Was actually a typo which I'll correct - 2nd line was meant to say "Nyan.a is insured by CPA".
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October 03, 2012, 09:31:29 PM
 #9

Was actually a typo which I'll correct - 2nd line was meant to say "Nyan.a is insured by CPA".

Not a typo. Unless you accidentally typed the truth. BMF is insured by CPA as well!

 BMF ("the customer") will be indemnified (by CPA) against loss defined
   as a NAV (Net Asset Value) of less than 1 per unit.

http://www.tsukino.ca/cpa/customers/account-12/

edit: well, you know that since you mention it already, but it doesnt make it any less true,
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October 03, 2012, 09:37:23 PM
 #10


Not only is this sort of insurance cover wrong and meaningless - it's also specifically against the contract of CPA.  I quote:

"5d. limited segregatability (de-risking sector default/widespread default)
To mitigate the risk of the default of an entire sector, THE CPA will seek to issue no more than 25% of it's coverage to any particular sector and will and to not insure assets using other assets from the same or similar sector. For example, we will avoid securing assets of a mining company with assets from other mining companies. In cases where this is unavoidable we will limit segregatability to pay claims on a first-come-first-serve basis, with the actual contract holders for the default event taking first priority. "

Now, inadvertently ending up in this situation is NOT (of itself) a breach of the contract.  But CPA SHOULD be acting to get its funds properly segregated quickly - right now EVERY insurance policy it has out rests on a single asset (BMF) which doesn't exactly have a stellar record of growth expressed in BTC.  And, whine all you want, about how it's gained in USD - how many of CPA's insurance policies are denominated in USD? (I could be wrong here - it may well be that CPA actually doesn't have any/many other policies out).

But it does raise the question:  WHEN did CPA's holdings in BMF go over 25%?  HOW did they get to nearly 100% without it ever being noticed?  Has CPA actually been BUYING more BMF even after it had passsed its own 25% rule?


I am not sure you are applying this section correctly. The way I see it, this is dealing with *insurance* not *investments*. This section says that no more than 25% of the insurance policies sold will cover the same sector, however you want to define sector. The issue with BMF is more that all of CPA's investments (capital) is in one place. This is a huge red flag, a disaster waiting to happen, as you pointed out, but this section of the contract just does not apply.

The rest of what you said is good though.

Yeah - I was conflating two seperate issues (as much for simplicity as anything).

"and to not insure assets using other assets from the same or similar sector.".  If 100% of assets doing the securing are BMF then what % of insurance cover can be written to BMF (or companies with exposure to BMF)?  The answer is actually 0%, not even 25%.  In fact, with all holdings being BMF, CPA shouldn't be able to insure ANY mining company or investment company which has significant exposure to the mining sector.

To summarise more accurately (than in my original post) the contract:

CPA should have diverse assets,
No insurance policy should be backed by assets of the same "sector" as the insured.

At present CPA is nothing like following that - and, in the case of nyan.a, the "guarantee" is backed by exactly the most inappropriate asset you could find (other, I guess, than by nyan.a itself).
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October 03, 2012, 09:38:41 PM
 #11

Was actually a typo which I'll correct - 2nd line was meant to say "Nyan.a is insured by CPA".

Not a typo. Unless you accidentally typed the truth. BMF is insured by CPA as well!

 BMF ("the customer") will be indemnified (by CPA) against loss defined
   as a NAV (Net Asset Value) of less than 1 per unit.

http://www.tsukino.ca/cpa/customers/account-12/

edit: well, you know that since you mention it already, but it doesnt make it any less true,

Keep up this trolling and I'll ban you from my thread!!!

[/sarcasm]
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October 03, 2012, 09:54:06 PM
 #12


Not only is this sort of insurance cover wrong and meaningless - it's also specifically against the contract of CPA.  I quote:

"5d. limited segregatability (de-risking sector default/widespread default)
To mitigate the risk of the default of an entire sector, THE CPA will seek to issue no more than 25% of it's coverage to any particular sector and will and to not insure assets using other assets from the same or similar sector. For example, we will avoid securing assets of a mining company with assets from other mining companies. In cases where this is unavoidable we will limit segregatability to pay claims on a first-come-first-serve basis, with the actual contract holders for the default event taking first priority. "


I am not sure you are applying this section correctly. The way I see it, this is dealing with *insurance* not *investments*. This section says that no more than 25% of the insurance policies sold will cover the same sector, however you want to define sector. The issue with BMF is more that all of CPA's investments (capital) is in one place. This is a huge red flag, a disaster waiting to happen, as you pointed out, but this section of the contract just does not apply.

The rest of what you said is good though.

See the bolded lines. Usagi doesnt keep his insurance premiums in bitcoins, he "invests them". And by his own charter, he shouldnt invest them in the same sector as the insured asset. In reality, he is not only doing that, he is investing in the very assets he is insuring.
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October 03, 2012, 09:59:02 PM
 #13

Usagi should be viewed as a case study regarding what happens when a person with nearly zero knowledge of finance and business tries to manage a venture (let alone multiple ventures at once.)

To gain a clear picture; all anyone must do is:
1. Read Usagi's posts. There is a continual misuse and lack of understanding regarding basic financial terms.
2. Read the threads of Usagi's securities. See that Usagi argues against very basic math and logic that highlights his shortcoming and his misrepresentation/misstatement of information.
3. Look at the track records of all of Usagi's securities. It is pretty grim. While many other btc-based ventures have failed, it isn't really an excuse. There are indeed ventures that have been successful (in terms of investment from IPO.)

So long as Usagi continue to act in a similar fashion, he will likely continue to destroy shareholder value and run his ventures deeper into the ground.
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October 03, 2012, 11:03:29 PM
 #14

I think it is possible to gain knowledge as you go, but the scale of your business should never exceed the scale of your capability (YARR).

Well.. you could always insure it with infinite Ego if you lack capability and/or expertise, I suppose  Roll Eyes

Anyway.. Is this going to be the "Best of Usagi" thread? - I'm sure some psychology or economics major will end up owing their degree to Usagis flamboyant use of BistroMath and rampant self-denial, would be nice if they had a comprehensive catalog to choose from,  I think it should at least make 'Movie of the Week' Grin

BTW: Anyone actually understand how "NYAN"(no .A .B or .C) fits into the Tetrahedron scheme of things?
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October 03, 2012, 11:39:44 PM
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I think it is possible to gain knowledge as you go, but the scale of your business should never exceed the scale of your capability (YARR).

Well.. you could always insure it with infinite Ego if you lack capability and/or expertise, I suppose  Roll Eyes

Anyway.. Is this going to be the "Best of Usagi" thread? - I'm sure some psychology or economics major will end up owing their degree to Usagis flamboyant use of BistroMath and rampant self-denial, would be nice if they had a comprehensive catalog to choose from,  I think it should at least make 'Movie of the Week' Grin

BTW: Anyone actually understand how "NYAN"(no .A .B or .C) fits into the Tetrahedron scheme of things?


Nyan only really exists because usagi totally bodged up the way the nyan.x thing was set up.

In a tranched CDO there should only be one pooled collection of assets - so one portfolio jointly owned by nyan.a, b and c.  With the dividends distributed to the various tranches (and the assets distributed in the case of closure).  For whatever wierd reason, usagi instead tried to have a seperate portfolio for each.

I suspect it thought that was the way to spread risk between the different nyans - when it fact risk is already distributed based on the seniorities of the various nyans (the order in which they have claim on assets).  Similarly, reward is split based on the defined means of dividend payout.

So instead of the current mess - where assets are shuffled between different nyans (fairly transparently, in all honesty) there should just be a single portfolio shared by all.  And the content of that portfolio could be defined as being kept to X% high-risk, Y% medium risk, Z% usagi's own businesses - or whatever.

But then you start to run into problems if the number of each type of nyan sold isn't roughly in proportion to the risk categories.  That COULD be managed (if you had a single portfolio) by dynamically adjusting the % of each type of investment in line with the outstanding bonds of each type.

The official reason for nyan was to attempt to manage the balancing of the different other nyans.  The real reason (in my view and this is pure conjecture) is that usagi just wanted to make something very 'clever' and 'complicated' to impress the market.

One of the main reasons nyan (the whole thing, not just the parent company) is in such a mess is that usagi totally screwed up keeping the investments balanced.  nyan.c was the main thing that sold - and nyan never had the capital to attempt to create a more balanced funds.

Despite the APPARENT seperation of nyan.a, b and c the fact remains that the way they actually operated is as though it were all one big portfolio.  And that portfolio ended up being pretty largely invested in very high-risk stuff.

Of itself, that isn't a problem - after all, most of the sold bonds are ALSO nyan.c.  But then you run into the problem that screw it all up.  usagi is in total denial when it loses money - and tries to maintain the fiction that all's well when it ain't.  That means that usagi was over-valuing nyan.b and nyan.c and then compounding the error by buying back stock at the fictitious price.  That buying back (because it's at too high a price) further devalues the TRUE value of what assets remains, making the actual realisable value for the remaining nyan.b stock-holders even worse than it already was.  That then led to even more fantasy valuations, exascerbating the problem even more.

Going back a little bit, why does the ratio of nyan.a/b and c actually matter?  Well you have to consider what function each provides to the other:

(I'll just discuss nyan.b and c - but similar principle applies with .a as well)

nyan.c provides nyan.b with extra security - as nyan.b gets to call on the chunk of assets 'held' by nyan.c before nyan.c does.

In return nyan.c gets any overflow of profits from nyan.b

The actual VALUE of those benefits depends very much on the relative number of each type of nyan.

if there's 10 nyan.b to each nyan.c then each nyan.b is getting the protection of 1/10th of a nyan.c worth of assets in return for handing over to the single nyan.c the overflow from 10 units of nyan.b.

Conversely, if there's 1 nyan.b to each 10 nyan.c then each nyan.b is getting the protection of 10 nyan.c worth of assets in return for handing over to the 10 nyan.c the overflow from 1/10th of a unit of nyan.b each.

It should be immediately obvious that there's a 100-fold difference between the two scenarios above in terms of the value each nyan type provides to the other.

Parent nyan was meant to balance the types of different nyan in the wildr.  That target balance was never disclosed, probably was never defined on any rational basis and definitely no balance was ever achieved.  I don't believe usagi ever truly understood how this sort of offering should be properly structured - as is clearly demonstrated by various of my points above.
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October 04, 2012, 12:21:20 AM
 #16

Usagi should be viewed as a case study regarding what happens when a person with nearly zero knowledge of finance and business tries to manage a venture (let alone multiple ventures at once.)

Precisely.

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October 04, 2012, 02:09:33 AM
 #17

I don't believe usagi ever truly understood how this sort of offering should be properly structured - as is clearly demonstrated by various of my points above.

Well since we're doing this, here's how the mess began:

Quote
Aug 15 00:22:52 <mircea_popescu>   mkay so i'm about to offer a proper CD, three tiered.
Aug 15 00:23:32 <Diablo-D3>   require 15 mhash per trade
Aug 15 00:23:57 <mircea_popescu>   if anyone knows of bond issuers that are neither pirate nor mining exposed, and owned by really well known supertrustworthy people i wanna hear.
Aug 15 00:23:58 <usagi>   A three tiered CD?
Aug 15 00:24:01 <mircea_popescu>   yes.
Aug 15 00:24:54 <usagi>   mircea: http://tensionhead26.deviantart.com/art/Black-Sabbath-devil-34718908
Aug 15 00:25:56 <Diablo-D3>   usagi: see pm.
Aug 15 00:26:21 <mircea_popescu>   yes, i am devil.
Aug 15 00:26:32 <teek>   two of my bonds are not pirate or mining exposed
Aug 15 00:26:38 <teek>   there are others
Aug 15 00:26:48 <usagi>   TEEK.A is fully guaranteed
Aug 15 00:26:57 <mircea_popescu>   lettuce look into this teek.
Aug 15 00:27:50 *   Chaaaang-Noi has quit (Ping timeout: 248 seconds)
Aug 15 00:27:52 <assbot>   [MPEX] [S.MPOE] 4200 @ 0.00036438 = 1.5304 BTC [-]
Aug 15 00:28:41 <mircea_popescu>   teek : 10k issued 586 total volume since day 1 ?
Aug 15 00:28:50 <Diablo-D3>   usagi: see pm now.
Aug 15 00:28:54 *   Isepick (~chillin@fl-184-5-24-15.dhcp.embarqhsd.net) has joined #bitcoin-assets
Aug 15 00:30:02 <teek>   mircea_popescu: something like that.. seems the interest is too low, everyone wants pirate rates
Aug 15 00:30:03 <teek>   Tongue
Aug 15 00:30:21 <mircea_popescu>   i hear you.
Aug 15 00:30:26 <usagi>   It's the same with nyan, everyone buys .c, NO ONE buys .a or even .b
Aug 15 00:30:43 <usagi>   And if I close sales... the price shoots up, and no one buys a or b
Aug 15 00:30:48 <usagi>   thats stupid
Aug 15 00:31:05 <mircea_popescu>   the ideea here is that im tranching 500 btc of mpoe bonds (yielding ~5% per month) + 500 btc of harnett's (yielding 1% per week).
Aug 15 00:31:29 <mircea_popescu>   i can't paste that with stuff doing 0.3% per week, even tho i understand that 15% pa is significant.
Aug 15 00:32:36 <teek>   tranching?
Aug 15 00:32:51 <Luceo>   mircea_popescu: If you offer 15% outside bitcoin they'd call it a HYIP Tongue
Aug 15 00:32:51 <mircea_popescu>   you know how cd's work right ?
Aug 15 00:32:53 <Luceo>   or a ponzi
Aug 15 00:32:56 *   Chaaaang-Noi (~J@mo-184-6-53-35.dhcp.embarqhsd.net) has joined #bitcoin-assets
Aug 15 00:32:57 <Luceo>   in Bitcoin its too low Cheesy
Aug 15 00:33:01 <mircea_popescu>   Luceo and for a good reason.
Aug 15 00:33:13 <mircea_popescu>   i fully understand this, and it's ap roblem, but it can't be resolved overnight.
Aug 15 00:33:23 <mircea_popescu>   there must be a popped ponzi first for people to learn.
Aug 15 00:34:20 *   copumpkin has quit (Quit: Computer has gone to sleep.)
Aug 15 00:36:51 <Luceo>   People still wont learn :/

[...]

Aug 15 00:49:18 <kakobrekla>   im afraid this is going to be a pump and dump
Aug 15 00:49:33 <usagi>   I will certainly sell at .5
Aug 15 00:49:36 <usagi>   Maybe a little at .3
Aug 15 00:49:49 <usagi>   1-3-5-8-13
Aug 15 00:49:59 <usagi>   price points.
Aug 15 00:50:21 <assbot>   [GLBSE] [FOO.PPPPT] 5 @ 1.0001 = 5.0005 BTC [-]
Aug 15 00:50:39 <usagi>   The reason why is because each price point represents a new wave of investors after the old wave has covered their risk
Aug 15 00:50:47 <DeaDTerra>   evening people Smiley
Aug 15 00:50:55 *   rdponticelli (~rdpontice@200-081-038-072.wireless.movistar.net.ar) has joined #bitcoin-assets
Aug 15 00:51:07 <mircea_popescu>   <usagi> 1-3-5-8-13 < what's this ?
Aug 15 00:51:11 <usagi>   The next wave will take it to .3 when it sinks into the market that ASICMINER is real
Aug 15 00:51:11 <mircea_popescu>   heya DeaDTerra
Aug 15 00:51:18 <assbot>   [GLBSE] [FOO.PPPPT] 7 @ 1.0001 = 7.0007 BTC [-]
Aug 15 00:51:20 <assbot>   [GLBSE] [FOO.PPPPT] 23 @ 1 = 23 BTC [-]
Aug 15 00:51:24 <assbot>   [GLBSE] [OBSI.HRPT] 93 @ 0.1047 = 9.7371 BTC
Aug 15 00:51:25 <assbot>   [GLBSE] [OBSI.HRPT] 7 @ 0.1048 = 0.7336 BTC
Aug 15 00:51:32 <usagi>   Then greedy people will rush in and the original investors will sell at .5
Aug 15 00:51:54 <usagi>   Then it will go back to .3 then up to .8 again, but that might not happen for over a year
Aug 15 00:52:01 <usagi>   Just technical analysis price points
Aug 15 00:52:09 <usagi>   wave analysis etc
Aug 15 00:52:15 <DeaDTerra>   Selling ASICMINER shares Smiley Pm me if you are interested!
Aug 15 00:52:18 <assbot>   [GLBSE] [FOO.PPPPT] 50 @ 1 = 50 BTC [-]
Aug 15 00:53:10 <assbot>   [GLBSE] [TYGRR.BOND-P] 3 @ 0.999 = 2.997 BTC [-]
Aug 15 00:53:25 *   teek is selling asicminer shares too, smoking deal @ .3
Aug 15 00:54:06 <teek>   mircea_popescu: i think i get it, thanks for the info.. so out of curiosity why would mixing something at .3% and something at 1% not be desirable?
Aug 15 00:54:32 <assbot>   [GLBSE] [TYGRR.BOND-P] 17 @ 0.987 = 16.779 BTC [-]
Aug 15 00:54:33 <assbot>   [GLBSE] [TYGRR.BOND-P] 3 @ 0.986 = 2.958 BTC [-]
Aug 15 00:54:34 <assbot>   [GLBSE] [TYGRR.BOND-P] 76 @ 0.98501 = 74.8608 BTC [-]
Aug 15 00:54:35 <assbot>   [GLBSE] [TYGRR.BOND-P] 1 @ 0.985 BTC [-]
Aug 15 00:54:45 <mircea_popescu>   teek you either mix things of the same risk and varying rewards to arbitrage reward
Aug 15 00:54:54 <mircea_popescu>   or things of the same reward and varying risks to arbitrage risk
Aug 15 00:55:06 <mircea_popescu>   my ideea is that nobody currently has an inkling as to risk measurements in btc world

Aug 15 00:55:10 <mircea_popescu>   so  that'd be what i want to offer.
Aug 15 00:56:49 <assbot>   [MPEX] [S.MPOE] 46372 @ 0.00037287 = 17.2907 BTC
Aug 15 00:59:28 <assbot>   [GLBSE] [DMC] 22 @ 0.04999999 = 1.1 BTC
Aug 15 00:59:43 <DeaDTerra>   how do I do the purple thing? Sad
Aug 15 01:01:00 <teek>   mircea_popescu, still a little confused.. so in this case harnett would be the senior tranche thus offering the least reward, then mpoe, then you need some others in there or?
Aug 15 01:01:13 <mircea_popescu>   no
Aug 15 01:01:21 <mircea_popescu>   if you wait a few minutes i'll show you the actual contract.
Aug 15 01:01:30 <mircea_popescu>   putting the finishing  touches on it nao.
Aug 15 01:01:41 <teek>   sure, now i just want to understand it Smiley
Aug 15 01:02:45 <Chaaaang-Noi>   $12.34
Aug 15 01:02:50 <teek>   ;;ticker
Aug 15 01:02:51 <gribble>   Best bid: 12.32479, Best ask: 12.3248, Bid-ask spread: 0.00001, Last trade: 12.32479, 24 hour volume: 47868, 24 hour low: 11.7555, 24 hour high: 12.34
Aug 15 01:02:58 <teek>   holy craapola
Aug 15 01:03:01 *   asa has quit (Quit:  HydraIRC -> http://www.hydrairc.com <- The alternative IRC client)
Aug 15 01:03:22 <teek>   cmon btc!  daddy needs a new set of gpus!
Aug 15 01:03:27 <teek>   Wink
Aug 15 01:04:00 <Chaaaang-Noi>   lol
Aug 15 01:04:12 <Chaaaang-Noi>   want me to send you a second box full of 21 gpus? Smiley
Aug 15 01:04:16 <DeaDTerra>   What has pirate changed his rates to?
Aug 15 01:04:22 <DeaDTerra>   and is there a official announcement yet?
Aug 15 01:04:51 <teek>   lol
Aug 15 01:05:11 <teek>   naw i think im good for now Tongue
Aug 15 01:05:58 <teek>   DeaDTerra, 5% top tier
Aug 15 01:06:27 <DeaDTerra>   hm that sucks Sad
Aug 15 01:06:35 <DeaDTerra>   I just got started with all of this Tongue
Aug 15 01:07:14 <assbot>   [MPEX] [F.GIGA.ETF] 790 @ 0.00112057 = 0.8853 BTC
Aug 15 01:07:15 <assbot>   [MPEX] [F.GIGA.ETF] 9410 @ 0.00112095 = 10.5481 BTC
Aug 15 01:08:02 <assbot>   [GLBSE] [DMC] 2 @ 0.04999999 = 0.1 BTC
Aug 15 01:08:21 <assbot>   [GLBSE] [DMC] 23 @ 0.04999999 = 1.15 BTC
Aug 15 01:08:23 <assbot>   [GLBSE] [DMC] 27 @ 0.05 = 1.35 BTC
Aug 15 01:09:38 <Chaaaang-Noi>   5% a week is still freaking awesome
Aug 15 01:10:14 <DeaDTerra>   It is but not as good at 7% xD
Aug 15 01:10:16 <teek>   yeah yeah mr top tier
Aug 15 01:10:17 <teek>   Tongue
Aug 15 01:10:18 <assbot>   [GLBSE] [DMC] 4 @ 0.05 = 0.2 BTC
Aug 15 01:10:18 <DeaDTerra>   Greedy maybe
Aug 15 01:10:54 <assbot>   [MPEX] [S.MPOE] 106 @ 0.00038108 = 0.0404 BTC
Aug 15 01:10:56 <assbot>   [MPEX] [S.MPOE] 23390 @ 0.00038129 = 8.9184 BTC
Aug 15 01:11:07 *   patrickharnett (cb4f5ec0@gateway/web/freenode/ip.203.79.94.192) has joined #bitcoin-assets
Aug 15 01:12:11 <Chaaaang-Noi>   its not hard to get 4.8 or 4.9% with a bit of trust Smiley
Aug 15 01:12:26 <mircea_popescu>   actually, my lower tier will do 9%.
Aug 15 01:12:32 <mircea_popescu>   just give me a second here to finish this Cheesy
Aug 15 01:12:34 <assbot>   [GLBSE] [JTME] 1 @ 0.9 BTC [-]
Aug 15 01:12:53 <usagi>   I hope your not copying Nyancat Financial Tongue)
Aug 15 01:13:06 <usagi>   It's weird. Every time I list a new security, 2 or 3 pop up just like it
Aug 15 01:13:16 <mircea_popescu>   haha i think i have dibs on cdo's usagi
Aug 15 01:13:17 <DeaDTerra>   hahahah xD
Aug 15 01:13:23 <mircea_popescu>   see the link i sent to teek above, it's from april lol
Aug 15 01:13:29 <usagi>   Mmm

[...]

Aug 15 01:59:47 <mircea_popescu>   alrighty so. ANNOUNCEMENT : introducing MPCD.A, .B and .C
Aug 15 01:59:49 <mircea_popescu>   http://polimedia.us/bitcoin/mpex.php
Aug 15 01:59:54 <mircea_popescu>   go read the contract and have fun trading!
Aug 15 01:59:58 <mircea_popescu>   taking any questions.
Aug 15 02:01:39 <DeaDTerra>   Wow creative... I think I have heard about that before... something about a cat
Aug 15 02:01:40 <usagi>   Lol
Aug 15 02:01:47 <mircea_popescu>   a cat ?
Aug 15 02:01:47 <usagi>   Lol DT I know, like I said
Aug 15 02:02:14 <DeaDTerra>   Maybe a NyanCat? or maybe it wasn't a cat at all just Nyan. yea just Nyan
Aug 15 02:02:27 <mircea_popescu>   https://bitcointalk.org/index.php?;topic=76515.0 << APRIL omg.
Aug 15 02:02:39 <mircea_popescu>   and btw, pinging teek.
Aug 15 02:03:32 <usagi>   No one is saying they invented the CDO
Aug 15 02:03:43 <usagi>   Just seems strange 2 days after I explained NYAN to you, this comes out :p
Aug 15 02:03:54 <usagi>   Kind of like TYGRR.BOND-PI and yarr but hey
Aug 15 02:04:02 <usagi>   It's a big market, I'm not the only fast food restaurant
Aug 15 02:04:05 <kakobrekla>   mpoe bonds are fixed at 4.9?
Aug 15 02:04:12 <assbot>   [MPEX] [B.MPCD.C] 5000 @ 0.001 = 5 BTC
Aug 15 02:04:16 <assbot>   [MPEX] [O.BTCUSD.C100T] 1 @ 0.25910304 BTC
Aug 15 02:04:20 <mircea_popescu>   kakobrekla currently fixed at 5% kakobrekla
Aug 15 02:04:42 <mircea_popescu>   dude srsly. this was announced ~4 months ago!
Aug 15 02:05:03 <kakobrekla>   lolwhat
Aug 15 02:05:11 <usagi>   No one is saying they invented a CDO
Aug 15 02:05:12 <eennaam>   start a niche market with regular speed food restaurant , or hell even slow food
Aug 15 02:05:13 <mircea_popescu>   as in can't go over 5%
Aug 15 02:05:26 <usagi>   I'm just ribbing you mircea. But I doubt you will pay 15% like you said
Aug 15 02:05:34 <mircea_popescu>   9% ? why not ?
Aug 15 02:05:40 <usagi>   9%, right
Aug 15 02:05:52 <usagi>   Because it's too imbalanced
Aug 15 02:06:06 <usagi>   You're paying 2x the value of the highest known paying security
Aug 15 02:06:12 <usagi>   What kind of guarantee are you offering?
Aug 15 02:06:14 <mircea_popescu>   well that is the very point of a cdo.
Aug 15 02:06:16 <usagi>   for the top trance?
Aug 15 02:06:41 <usagi>   It's too much pressure. You will have to limit sales.
Aug 15 02:06:50 <mircea_popescu>   the top pays 2. the bottom pays 9.
Aug 15 02:06:52 <usagi>   Then the price will shoot up and investors will not realize 9%
Aug 15 02:06:57 <BTCHero>   aww all the asicminer is gone
Aug 15 02:06:59 <mircea_popescu>   sales are limited. did you read the contract ?
Aug 15 02:07:05 <usagi>   No
Aug 15 02:07:07 <usagi>   lol
Aug 15 02:07:16 <usagi>   Well sales are limited, right
Aug 15 02:07:20 <usagi>   I should probably do that too
Aug 15 02:07:36 <usagi>   Henceforth NYAN.C is limited to 3,000 outstanding
Aug 15 02:07:40 <usagi>   GET IT WHILE YOU CAN

Aug 15 02:07:41 <mircea_popescu>   cdos are limited by their very nature.
Aug 15 02:07:44 <mircea_popescu>   lol!
Aug 15 02:07:46 <kakobrekla>   hm imho clean mpoe bonds is better deal than A or B
Aug 15 02:07:59 <usagi>   quick im logging in now to cancel the ask
Aug 15 02:08:11 <mircea_popescu>   kakobrekla well possibly, depends on your risk profile et all.
Aug 15 02:08:20 <mircea_popescu>   A has practically no risk i would guess.
Aug 15 02:08:44 <kakobrekla>   i dont see how A can have less risk than MPOE bond if its operated by you on the end
Aug 15 02:08:45 *   Chaaaang-Noi has quit (Ping timeout: 248 seconds)
Aug 15 02:09:41 <assbot>   [MPEX] [B.MPCD.B] 80000 @ 0.001 = 80 BTC
Aug 15 02:09:58 <mircea_popescu>   well mpoe bond can either not kick in (if people offer lower interest)
Aug 15 02:10:07 <mircea_popescu>   or lese it could get hosed if people buy options and get lucky.
Aug 15 02:10:22 <assbot>   [MPEX] [S.MPOE] 16100 @ 0.00038129 = 6.1388 BTC
Aug 15 02:11:08 <assbot>   [GLBSE] [TYGRR.BOND-P] 12 @ 1 = 12 BTC
Aug 15 02:11:48 <brendio>   MPOE bonds loose if MPOE makes a loss. For A to lose, one and possibly more of MPOE bonds, Patrick and NYAN would need to makes losses.
Aug 15 02:11:54 <assbot>   [GLBSE] [BIB.PIRATE] 56 @ 0.98 = 54.88 BTC [-]
Aug 15 02:12:08 <BTCHero>   patrick starfish
Aug 15 02:12:08 <mircea_popescu>   A is 400 out of a 1.1k pool.
Aug 15 02:12:09 <BTCHero>   ?
Aug 15 02:12:19 <mircea_popescu>   either mpoe or patrick would have to completely wipeout
Aug 15 02:12:20 <mircea_popescu>   and then some
Aug 15 02:12:26 <mircea_popescu>   yes BTCHero
Aug 15 02:12:30 <assbot>   [MPEX] [S.MPOE] 22110 @ 0.00038129 = 8.4303 BTC
Aug 15 02:12:30 <assbot>   [MPEX] [S.MPOE] 22390 @ 0.000383 = 8.5754 BTC
Aug 15 02:12:43 <mircea_popescu>   tbh i don't think there exists more secure anything than .A atm.
Aug 15 02:12:59 <teek>   mircea_popescu, the %'s for a,b,c are these arbitrary #'s you decide or is there some math behind them?
Aug 15 02:13:20 <usagi>   nyan.a is guaranteed by bitcoins held in an offline paper wallet.
Aug 15 02:13:26 <mircea_popescu>   teek i just picked numbers.
Aug 15 02:13:43 <mircea_popescu>   pretty much want to see what market says.
Aug 15 02:14:28 <assbot>   [MPEX] [S.BVPS] 188 @ 0.003828 = 0.7197 BTC [-]
Aug 15 02:15:02 <teek>   i see
Aug 15 02:15:39 <teek>   usagi, this isn't really the same as nyan
Aug 15 02:16:16 *   rdponticelli has quit (Ping timeout: 240 seconds)
Aug 15 02:16:42 <usagi>   there are three, chain-default tiers for which the interest paid is declared by fiat out of a pool, and not related to the underlying value of the funds?
Aug 15 02:17:20 <usagi>   Actually I think she mentioned there are 2 tiers
Aug 15 02:17:44 <mircea_popescu>   who's she ? and whether there's 2 or 18 is not really too important.
Aug 15 02:17:54 <usagi>   Well teek, didn't you actually invented the first CDO you know, teek.A and teek.B?
Aug 15 02:18:22 <assbot>   [GLBSE] [TYGRR.BOND-P] 3 @ 1 = 3 BTC
Aug 15 02:18:35 <assbot>   [GLBSE] [ARS] 5 @ 0.009 = 0.045 BTC [-]
Aug 15 02:18:41 <teek>   i am honestly not sure, but teek.a and teek.b really have no relation other than name
Aug 15 02:18:59 <teek>   so if what mircea_popescu is doing is a cdo then no
Aug 15 02:19:10 <mircea_popescu>   i think it's pretty much by the book a cdo.
Aug 15 02:20:00 <kakobrekla>   someone should make a cdo from all pirate insured offers
Aug 15 02:20:22 <mircea_popescu>   that might be a great ideea actually.
Aug 15 02:20:41 <mircea_popescu>   tranche it 10/20/30/40 in 4 tiers
Aug 15 02:21:27 <assbot>   [GLBSE] [TYGRR.BOND-P] 2 @ 0.99 = 1.98 BTC [-]
Aug 15 02:22:23 *   Luceo (~luceo@gateway/tor-sasl/luceo) has joined #bitcoin-assets
Aug 15 02:25:27 <assbot>   [GLBSE] [FPGAMINING] 1 @ 0.94 BTC [-]
Aug 15 02:25:29 <assbot>   [GLBSE] [JTME] 1 @ 0.99899 BTC
Aug 15 02:26:56 <mircea_popescu>   the only difference, teek, might be that in general cdos are based on fixed rate investments, which arguably mpoe bonds aren't, or at least eskimobob so argues.
Aug 15 02:27:11 *   eennaam has quit ()
Aug 15 02:27:13 <smickles>   oooh, i see some nifty bonds
Aug 15 02:27:19 <mircea_popescu>   o hai.
Aug 15 02:27:37 <patrickharnett>   yes, there is a lurking starfish
Aug 15 02:28:10 <assbot>   [GLBSE] [DMC] 40 @ 0.05 = 2 BTC
Aug 15 02:28:20 <assbot>   [GLBSE] [TYGRR.BOND-P] 3 @ 0.9999 = 2.9997 BTC
Aug 15 02:28:56 <mircea_popescu>   patrickharnett so i guess this has the side advantage to you that you know when you'll be asked to repay : 30th of october or thereabouts.
Aug 15 02:29:02 <assbot>   [GLBSE] [DMC] 1 @ 0.05 BTC
Aug 15 02:29:34 <patrickharnett>   I didn't notice the 30'th date - wouldn't be a problem anyway
Aug 15 02:29:47 <assbot>   [MPEX] [S.MPOE] 32810 @ 0.000383 = 12.5662 BTC
Aug 15 02:29:48 <mircea_popescu>   well since the bonds die and repay on the 1st of nov
Aug 15 02:29:49 <assbot>   [MPEX] [S.MPOE] 18714 @ 0.00038423 = 7.1905 BTC
Aug 15 02:29:50 <assbot>   [MPEX] [S.MPOE] 797 @ 0.00039267 = 0.313 BTC
Aug 15 02:29:51 <assbot>   [MPEX] [S.MPOE] 5615 @ 0.00039477 = 2.2166 BTC
Aug 15 02:29:52 <mircea_popescu>   it'd be a few days prior.
Aug 15 02:30:09 <patrickharnett>   it's only 500+interest, it's not lots
Aug 15 02:30:11 <assbot>   [GLBSE] [GIGAMINING] 1 @ 1.1375 BTC
Aug 15 02:30:22 <mircea_popescu>   not this time.
Aug 15 02:30:32 <mircea_popescu>   if these are successfull any i will make larger ones.

So yeah. As clearly demonstrated by the many theoretical points of Deprived and by a couple practical points above.

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October 04, 2012, 03:33:11 AM
 #18

https://bitcointalk.org/index.php?topic=74975.msg1243259#msg1243259  I think this is relevent to usagi re: fiduciary duty and declaring a conflict of interest.

Ive not seen usagi post anything in the OP of any of the funds they run about conflicting interests they may have. In the CPA thread for example usagi doesnt mention NYAN.A or BMF which is required as a fund manager imo.

Usagi has never ever brought up the conflicts of interest and this is quite telling.

(quoted from Icebreaker)

Quote
http://www.efmoody.com/arbitration/fiduciary.html

In the handling of money and when one acts as a corporate or individual trustee, there is a fiduciary responsibility owed to the principal party.

It is defined as a relationship imposed by law where someone has voluntarily agreed to act in the capacity of a "caretaker" of another's rights, assets and/or well being.

The fiduciary owes an obligation to carry out the responsibilities with the utmost degree of "good faith, honesty, integrity, loyalty and undivided service of the beneficiaries interest."

The good faith has been interpreted to impose an obligation to act reasonably in order to avoid negligent handling of the beneficiary's interests as well the duty not to favor ANYONE ELSE'S INTEREST (INCLUDING THE TRUSTEES OWN INTEREST) over that of the beneficiary.

Further, if the agent should find him/herself in a position of conflicting interests, the agent must disclose the dual agency (acting for two parties at the same time) or risk being accused of constructive fraud in regards to both or either principals.

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October 04, 2012, 04:01:43 AM
 #19

https://bitcointalk.org/index.php?topic=74975.msg1243259#msg1243259  I think this is relevent to usagi re: fiduciary duty and declaring a conflict of interest.

Ive not seen usagi post anything in the OP of any of the funds they run about conflicting interests they may have. In the CPA thread for example usagi doesnt mention NYAN.A or BMF which is required as a fund manager imo.

Usagi has never ever brought up the conflicts of interest and this is quite telling.

(quoted from Icebreaker)

Quote
http://www.efmoody.com/arbitration/fiduciary.html

In the handling of money and when one acts as a corporate or individual trustee, there is a fiduciary responsibility owed to the principal party.

It is defined as a relationship imposed by law where someone has voluntarily agreed to act in the capacity of a "caretaker" of another's rights, assets and/or well being.

The fiduciary owes an obligation to carry out the responsibilities with the utmost degree of "good faith, honesty, integrity, loyalty and undivided service of the beneficiaries interest."

The good faith has been interpreted to impose an obligation to act reasonably in order to avoid negligent handling of the beneficiary's interests as well the duty not to favor ANYONE ELSE'S INTEREST (INCLUDING THE TRUSTEES OWN INTEREST) over that of the beneficiary.

Further, if the agent should find him/herself in a position of conflicting interests, the agent must disclose the dual agency (acting for two parties at the same time) or risk being accused of constructive fraud in regards to both or either principals.

Yeah, conflict of interest is definitely one the problems that has happened.  I've specifically referred to it a few times - most notably in the CPA insuring BMF debacle.  usagi negotiated and agreed the contract for BOTH parties to it - without bothering to even inform share-holders in advance, let alone ask them to approve it.

There's been other conflicts of interests - such as one of the nyans (can't remember for sure which one - 95% sure it was nyan.b) lending cash interest-free to CPA and disguising it on the books as an investment.  That was clearly against nyan.b's interest.  Hmm, on reflection maybe it wasn't - there's a case to be made that nyan.b giving an interest-free loan that it was confident would be repaid is more profitable (i.e. makes less loss) than usagi actually investing it.  I somehow doubt usagi would use that argument though.  Not only was that a conflict of interest - there was also an attempt to deceive investors by putting it on the books as an investment.

There's other examples as well - but they aren't amusing enough to warrant the time explaining them in detail really.

Because of all the inbred share holdings in one another, there's an ongoing conflict of interest.  e.g. nyan.a holds a ton of shares in BMF.  nyan badly needs liquidity (to buy-back all the sells at 0.99) and BMF needs to sell more shares.  IF the two had seperate management then there's a good chance nyan.a would just start selling off its BMF - but it won't whilst usagi also runs BMF and is desperate for its price to rise into the ask-walls for funds to get new hardware.

Which reminds me - time to buy up some BMF and relist at .49 which is where usagi has stated it'll be supporting the price.  More free money I guess (I would be doing that if I was actually confident usagi would deliver - I'm not confident, so I won't: but it's free money for any true believers still left).
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October 04, 2012, 06:28:02 AM
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So, let's get this clear:

Half (roughly) of nyan.a's holdings are BMF.
BMF is insured by CPA.
CPA's only assets of any note are BMF.

Its even worse than that, CPA also insures Nyan.A.

NYAN ("the customer") will be indemnified (by CPA) against loss defined
   as a NAV (Net Asset Value) of NYAN.A less than 1 per unit.

http://www.tsukino.ca/cpa/customers/account-15/


Was actually a typo which I'll correct - 2nd line was meant to say "Nyan.a is insured by CPA".

You just fucked up.

You made a typo -- as puppet -- and corrected it as Deprived.

I was waiting for this, asshole.
No.  Deprived corrected his own typo.


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