[BitFunder] My name is Bond. MPOE Bond. ( Jan: 9.99%, Feb: 4.8% Mar: -23%)

[rini17]

Noticed a few trades of CoinBr.MPBPT-O at 0.12 . Would like to comment on it, since it seems grossly overvalued compared to the profit expectation. From the past performance, most likely profit from MPOE bonds is around 5%. Thus, CoinBr.MPBPT-O would liquidate at 0.105/share in the end of January and buying at 0.12 may result in a net loss.

It's not really so complicated, one has to just remember we will be offering every month fresh new MPBPT shares with prices under or at 0.101 . So when thinking about buying price, it's necessary to take only one month's expected profit into account, not anything further than that.

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[rini17]

MPOE announced January results. It ended up in profit, that means bondholders will receive full bond offered rate for this month: 9.99%. Thus we are pleased to announce every share of CoinBr.MPBPT-O will be liquidated at a price of 0.10999 in few hours.

Due to technical reasons, asset will be invisible during this time.

If you plan to reinvest in February, CoinBr.MPBPT-E February is staying open till tomorrow - Saturday evening (UTC). After this deadline, you may have to buy at market (presumably higher) rate, or wait for March offering.

[Peter Lambert]

MPOE announced January results. It ended up in profit, that means bondholders will receive full bond offered rate for this month: 9.99%. Thus we are pleased to announce every share of CoinBr.MPBPT-O will be liquidated at a price of 0.10999 in few hours.

Due to technical reasons, asset will be invisible during this time.

If you plan to reinvest in February, CoinBr.MPBPT-E February is staying open till tomorrow - Saturday evening (UTC). After this deadline, you may have to buy at market (presumably higher) rate, or wait for March offering.

With returns so high, it must be a ponzi

Wow, that turned out pretty nice. I wonder if next month will be as good?

[rini17]

MPOE announced January results. It ended up in profit, that means bondholders will receive full bond offered rate for this month: 9.99%. Thus we are pleased to announce every share of CoinBr.MPBPT-O will be liquidated at a price of 0.10999 in few hours.

Due to technical reasons, asset will be invisible during this time.

If you plan to reinvest in February, CoinBr.MPBPT-E February is staying open till tomorrow - Saturday evening (UTC). After this deadline, you may have to buy at market (presumably higher) rate, or wait for March offering.

With returns so high, it must be a ponzi

Wow, that turned out pretty nice. I wonder if next month will be as good?

January was looking like a boring month, until BTCUSD jumped up. That would likely adversely affect MPOE results, but such risk is mostly calculated in and it's likely the rate would stay in 4-5% territory. Then on Wednesday night serious whale action (over 10k BTC) on MPEx occurred - commentary. What was the exact intent is unclear, but the scheme seems to have failed and the money has stayed with MPOE, while also simultaneously raising the MPBOR. So... nobody knows what happens next month, the situation can change in matter of hours.

[MPOE-PR]

I wonder if next month will be as good?

Seems pretty unlikely.

January was looking like a boring month, until BTCUSD jumped up. That would likely adversely affect MPOE results, but such risk is mostly calculated in and it's likely the rate would stay in 4-5% territory. Then on Wednesday night serious whale action (over 10k BTC) on MPEx occurred - commentary. What was the exact intent is unclear, but the scheme seems to have failed and the money has stayed with MPOE, while also simultaneously raising the MPBOR.

On the balance of things kinda looks like somebody (the puts guy) was trying to momentum-trade. The trend reversed suddenly and they had to cover towards the end of the day at a ~15ish % loss. Had the trend continued they might have made some pretty decent bank. There was another large player paying ~5% to insure ~30k BTC via calls.

So... nobody knows what happens next month, the situation can change in matter of hours.

Very true.

[Peter Lambert]

January was looking like a boring month, until BTCUSD jumped up. That would likely adversely affect MPOE results, but such risk is mostly calculated in and it's likely the rate would stay in 4-5% territory. Then on Wednesday night serious whale action (over 10k BTC) on MPEx occurred - commentary. What was the exact intent is unclear, but the scheme seems to have failed and the money has stayed with MPOE, while also simultaneously raising the MPBOR. So... nobody knows what happens next month, the situation can change in matter of hours.

So this high January month should be viewed as an outlier, with earlier months' returns being more probable, unless something unexpected happens, in which case nobody knows what the result will be.

[rini17]

January was looking like a boring month, until BTCUSD jumped up. That would likely adversely affect MPOE results, but such risk is mostly calculated in and it's likely the rate would stay in 4-5% territory. Then on Wednesday night serious whale action (over 10k BTC) on MPEx occurred - commentary. What was the exact intent is unclear, but the scheme seems to have failed and the money has stayed with MPOE, while also simultaneously raising the MPBOR. So... nobody knows what happens next month, the situation can change in matter of hours.

So this high January month should be viewed as an outlier, with earlier months' returns being more probable, unless something unexpected happens, in which case nobody knows what the result will be.

Another opinion can be that interest rate currently tends to increase over time because demand for options grows faster than capital provided by bondholders. But it's no clear trend, too... LOL, maybe I should hire a salesman to create some hype instead Anyone?

[🏰 TradeFortress 🏰]

January was looking like a boring month, until BTCUSD jumped up. That would likely adversely affect MPOE results, but such risk is mostly calculated in and it's likely the rate would stay in 4-5% territory. Then on Wednesday night serious whale action (over 10k BTC) on MPEx occurred - commentary. What was the exact intent is unclear, but the scheme seems to have failed and the money has stayed with MPOE, while also simultaneously raising the MPBOR. So... nobody knows what happens next month, the situation can change in matter of hours.

So this high January month should be viewed as an outlier, with earlier months' returns being more probable, unless something unexpected happens, in which case nobody knows what the result will be.

Another opinion can be that interest rate currently tends to increase over time because demand for options grows faster than capital provided by bondholders. But it's no clear trend, too... LOL, maybe I should hire a salesman to create some hype instead Anyone?

Hire smoothie 

[Deprived]

In fact the optimum strategy for bond purchasers collectively is for someone (not for everyone) to ask high, but for each individually to ask low. On analysis this situation is slightly different both from the prisoner dilemma (where indeed best strategy collectively is for everyone to x but best strategy individually is for each to y) and from the classical disaster of commons (where best strategy for each individually is to take most and give least). Maybe Bitcoin has just created its very own game theory situation.

What I can't work out is what the large investors are doing.

I mean if someone is putting thousands of BTC in (which some are) then how hard is to figure out that rather than put it all in at X% (where X% is the lowest rate they'd prefer to risk at rather than not bear the risk) they should put all except 100 BTC in at X% and the last 100 BTX at 100% or 1000% or whatever - to guarantee getting the whole pot when there's insufficient capital offered for the rate to be capped.

As 100 becomes a smaller pecentage of their total committed capital they need a smaller chance of capital being exhausted for this to be profitable.  If they know other investors then this 100 BTC max-rate block could be privately shared between them reducing the cost to them of ensuring a scoop (where insufficent capital is offered) even further.

That's why I was surprised at absolutely no cap on rate - as when one individual can submit different bids it's very easy to game (yet noone seems to have bothered doing it).

[MPOE-PR]

I mean if someone is putting thousands of BTC in (which some are) then how hard is to figure out that rather than put it all in at X% (where X% is the lowest rate they'd prefer to risk at rather than not bear the risk) they should put all except 100 BTC in at X% and the last 100 BTX at 100% or 1000% or whatever - to guarantee getting the whole pot when there's insufficient capital offered for the rate to be capped.

Let's see, how would that work? Guy A with 5000 BTC, guy B with 5000 BTC, guy C with 5000 BTC. Bonds structure:

4900 BTC @ 0%
4900 BTC @ 0%
4900 BTC @ 0%
100 BTC @ 5%
100 BTC @ 10%
100 BTC @ 15%

Now f(BTC) = % does something like this: (0 , 14700] -> 0%; (14701, 14800] -> 5%; (14801, 14900] -> 10%; (14901, inf) -> 15%. That make any sense to you?

That's why I was surprised at absolutely no cap on rate - as when one individual can submit different bids it's very easy to game (yet noone seems to have bothered doing it).

I'm not so sure it can be gamed at all, but if you don't feel like explaining it theoretically you can always do a demonstration I guess.

[rini17]

That's why I was surprised at absolutely no cap on rate - as when one individual can submit different bids it's very easy to game (yet noone seems to have bothered doing it).

I'm not so sure it can be gamed at all, but if you don't feel like explaining it theoretically you can always do a demonstration I guess.

Mircea Popescu as creditor of last instance used to set maximal rate and I don't remember him officially saying he discontinued that forever. So if someone requests insane rate like 1000% I guess he can step in and set the cap.

[Deprived]

I mean if someone is putting thousands of BTC in (which some are) then how hard is to figure out that rather than put it all in at X% (where X% is the lowest rate they'd prefer to risk at rather than not bear the risk) they should put all except 100 BTC in at X% and the last 100 BTX at 100% or 1000% or whatever - to guarantee getting the whole pot when there's insufficient capital offered for the rate to be capped.

Let's see, how would that work? Guy A with 5000 BTC, guy B with 5000 BTC, guy C with 5000 BTC. Bonds structure:

4900 BTC @ 0%
4900 BTC @ 0%
4900 BTC @ 0%
100 BTC @ 5%
100 BTC @ 10%
100 BTC @ 15%

Now f(BTC) = % does something like this: (0 , 14700] -> 0%; (14701, 14800] -> 5%; (14801, 14900] -> 10%; (14901, inf) -> 15%. That make any sense to you?

That's why I was surprised at absolutely no cap on rate - as when one individual can submit different bids it's very easy to game (yet noone seems to have bothered doing it).

I'm not so sure it can be gamed at all, but if you don't feel like explaining it theoretically you can always do a demonstration I guess.

Lets take your example where there's 3 guys A,B and C all putting in 5k.

At the moment (i.e. not doing what I propose) their bids would have been:

A = 5000 @ X
B = 5000 @ Y
C = 5000 @ Z

Where X,Y and Z represent whatever values they otherwise believe are best for them to bid.  I'd NEVER suggest bidding at 0% - as the investment is NOT risk-free.  What X,Y and Z are (or should be) is a different discussion - but in general it should be the lowest rate at which you'd prefer your capital to be risked rather than unused.

If A was to do this on his own then instead of bidding 5000 @ X he'd make 2 bids:

4900 @ X
100 @ 500% (or any rate large enough to ensure grabbing all profits)

If the demand for capital doesn't exceed available bond capital then only  4900 of his capital would be used and his profit (or loss) would be 98% of what he'd have got had he just bid all 5000 @ X.  So the WORST outcome of this scenario is losing 2% of profits.

If demand for capital exceeds available bond capital then the bonds get ALL the capital.  For this to be profitable for A, the gains when insufficient capital is offered need to exceed the 2% of profits he loses when sufficient capital is offered.

But now consider if A, B and C collude to a very limited extent - by combining to make the 100 bid.  Then the bids look like:

A = 4966 @ X
B = 4966 @ Y
C = 4966 @ Z

(A+B+C) 100 @ 400%

Each of them now only has to throw in 33.3333 BTC for the high bid - ensuring they all get the lot if insufficient capital is offered.  That only costs each of them under 1% of profits when sufficient capital is offered in return for guaranteeing a scoop when when there's a shortfall.  Does the benefit from this more than cover that?  Well take a look at the last 2 months and you tell me?  Remember - I suggested this BEFORE this month.  How would the real equivalents of A,B and C have done this month had they done something like this?  How many months of giving up under 1% (or 2% if done solo) of profits does that cover?

[MPOE-PR]

Mircea Popescu as creditor of last instance used to set maximal rate and I don't remember him officially saying he discontinued that forever. So if someone requests insane rate like 1000% I guess he can step in and set the cap.

No, it was discontinued in August, effective September.

V. To allow for a fairer pricing of risk, starting in September the limit on bonds interest is lifted (it was 2% at launch and then 5% starting in May).

Mircea Popescu will continue to supplement any capital shortfall, at an interest equal to the last bond but not less than the MPBOR for the previous month.

A cap could be introduced again in the future, of course, but currently it's not being entertained.

[MPOE-PR]

@Deprived I see now what you mean. Sure, for those months where capital requirements exceed total bonds posted it pays to have a high floater and ensure you soak up all available profit (notice that in no case can the bonds make more than what MPOE makes), with the drawback that when capital requirements do not exceed total bonds posted, that high floater makes nothing.

I wouldn't call this "gaming" it though, I would call it working as intended. Capital requirements should not exceed total bonds posted, and if they do interests should be giving a clear signal that more BTC is needed.

[Deprived]

@Deprived I see now what you mean. Sure, for those months where capital requirements exceed total bonds posted it pays to have a high floater and ensure you soak up all available profit (notice that in no case can the bonds make more than what MPOE makes), with the drawback that when capital requirements do not exceed total bonds posted, that high floater makes nothing.

I wouldn't call this "gaming" it though, I would call it working as intended. Capital requirements should not exceed total bonds posted, and if they do interests should be giving a clear signal that more BTC is needed.

Yeah maybe saying it was "gaming" it wasn't the most accurate terminology.  More accurately, perhaps, I was surprised to see that none of the big investors were taking a pretty simple (and cheap) step to ensure they left no cash on the table if capital requirements weren't met (without resort to MP himself).

If the floater is a small percentage of invested capital then the loss is so small when it isn't used (less than you'd immediately think - as the cost is offset to an extent by not paying losses on it if there's a losing month) that capital requirements only need to exceed total offered funds once every few years.  Of course if multiple investors start doing it then we get a second-level of gaming - where some could risk NOT doing it and rely on others actually doing it to get the benefits without the small cost.

[MPOE-PR]

Yeah maybe saying it was "gaming" it wasn't the most accurate terminology.  More accurately, perhaps, I was surprised to see that none of the big investors were taking a pretty simple (and cheap) step to ensure they left no cash on the table if capital requirements weren't met (without resort to MP himself).

If the floater is a small percentage of invested capital then the loss is so small when it isn't used (less than you'd immediately think - as the cost is offset to an extent by not paying losses on it if there's a losing month) that capital requirements only need to exceed total offered funds once every few years.  Of course if multiple investors start doing it then we get a second-level of gaming - where some could risk NOT doing it and rely on others actually doing it to get the benefits without the small cost.

I think you are spot-on with the 2nd paragraph: there was a 25% floater in Dec iirc, then it got removed and there was none in Jan.

[EskimoBob]

Pervert and a woman beater, mircea popescu, needs coin to finance his options bazaar.
He has the required funds (or is he just bragging?), but he is so afraid of the risk, he is actually willing to pay absurdly high rates to third party and use their money instead.
I guess this shit must be riskier than you two scumbags from mpex care to admit. If it was all so safe and sound, why borrow if you have the coin?
PS! PR-fluff please, sing that stupid "he has better investments" bullshit song to your pervert master.

[Peter Lambert]

Pervert and a woman beater mircea popescu needs coin to finance his options bazaar.
He has the required funds (or is he just bragging?), but he is so afraid of the risk, he is actually willing to pay absurdly high rates to third party and use their money instead.
I guess this shit must be riskier than you two scumbags from mpex care to admit. If it was all so safe and sound, why borrow if you have the coin?
PS! PR-fluff please, sing that stupid "he has better investments" bullshit song to your pervert master.

This post makes no sense and is mostly off-topic?

[EskimoBob]

Pervert and a woman beater, mircea popescu, needs coin to finance his options bazaar.
He has the required funds (or is he just bragging?), but he is so afraid of the risk, he is actually willing to pay absurdly high rates to third party and use their money instead.
I guess this shit must be riskier than you two scumbags from mpex care to admit. If it was all so safe and sound, why borrow if you have the coin?
PS! PR-fluff please, sing that stupid "he has better investments" bullshit song to your pervert master.

This post makes no sense and is mostly off-topic?

added few ","
Not really. I guess you have no idea who popescu really is

[rini17]

Very interesting how February interest rate unfolded, it is possible market reacted to our announcement to set our request to 4.8%, despite MPBPT-E was among smallest players. So this time we will announce it only after bond will be bought.

At the moment 178.2 BTC was raised in MPBPT-O for March bonds, bid still open till tomorrow evening.