[BTC-TC] Deprived Mining Speculation (DMS)

[stripykitteh]

I guess option 2 applies to this situation the most. Option 1 mostly covers a voluntary shutdown (which has to be approved by a vote).

There's also option 3, which I'd prefer: Move to another exchange and credit the shares there based on the BTCT records.

Guess it would depend on if there's anything in the contract that precludes moving to a new exchange. But assuming there isn't I'd like Deprived to explore the possibility of relisting on another exchange rather than winding up the assets.

[FloatesMcgoates]

I guess option 2 applies to this situation the most. Option 1 mostly covers a voluntary shutdown (which has to be approved by a vote).

There's also option 3, which I'd prefer: Move to another exchange and credit the shares there based on the BTCT records.

I would caution against moving to another exchange, Btct's shutdown leads me to believe that the legal threat posed by regulatory bodies is real enough to potentially scare off the owners of havelock and bitfunder as well. I would rather have Deprived carry out a buyback in order to fairly distribute the remaining assets so I can withdraw them to a safe haven instead of leave them in now the very precarious hands of securities exchange operators.

[Rannasha]

I guess option 2 applies to this situation the most. Option 1 mostly covers a voluntary shutdown (which has to be approved by a vote).

There's also option 3, which I'd prefer: Move to another exchange and credit the shares there based on the BTCT records.

I would caution against moving to another exchange, Btct's shutdown leads me to believe that the legal threat posed by regulatory bodies is real enough to potentially scare off the owners of havelock and bitfunder as well. I would rather have Deprived carry out a buyback in order to fairly distribute the remaining assets so I can withdraw them to a safe haven instead of leave them in now the very precarious hands of securities exchange operators.

Another issue is that both other exchanges don't seem to have API-functionality that is needed to update my automated transfer bot and I wonder how eager Deprived is to go back to manual transfers after having had the bot for a some time now.

[baloo_kiev]

Moving to another platform now looks like a huge risk. If BTC-TC closes smoothly, it will be the best case.
Now imagine if it was shut down by officials. Nobody would get a single satoshi back!

[Progressive]

BTCT will operate as usual until October 7

October 7, 2013, all forms of secondary market trading will be halted on both sites.

So in theory we could have two difficulty changes and then the buyback ;-)

Altough I would prefer for DMS to exist on other exchange. Ukyo is located in China? What about Havelock or Cryptostocks (I have no experience with CS)?

[FloatesMcgoates]

BTCT will operate as usual until October 7

October 7, 2013, all forms of secondary market trading will be halted on both sites.

So in theory we could have two difficulty changes and then the buyback ;-)

Altough I would prefer for DMS to exist on other exchange. Ukyo is located in China? What about Havelock or Cryptostocks (I have no experience with CS)?

I do not think we should take any chances with the exact date BTCT closes and instead focus on resolving this issue swiftly so we can get our coins to safety.

[Deprived]

Will need to consider carefully how to proceed from here.

In principle the options are :

1.  Move to another exchange,
2.  Close down - and distribute funds approximately in ratio to what market prices were just before the announcement.

Problem with #2 is it's going to be hard to have any sort of rational discussion over how much should go to mining and selling as everyone with an opinion likely has a lot of one and not much of the other so isn't unbiased.  Market prices is the only way to go - as those represent the prices people were happy to hold at (noone was trying hard to buy more of whichever they held or was desperate to sell into bids - or they'd have done so).

If problems arise with recovering investments then loss/delay from that MUST go to SELLING not MINING as SELLING were always getting the benefit from investment.

A few things seem pretty obvious immediately:

1.  No new investments should be made.
2.  Where investments can be cashed out they should be - so there's no further changes in NAV/U.
3.  Debatably I should withdraw all funds to a BTC wallet under my control and only return them when distribution is to occur.
4.  Trading will be disabled on PURCHASE - I won't sell more shares now obviously and also I can't redeem them until I'm sure all investments are safe and will be recoverable.  It would be bad form if I allowed sale back of PURCHASE then found we couldn't get one investment back and so those who had sold back had received more than their fair share.
5.  Similar to 4 I won't be redeeming pairs of MINING+SELLING.

This isn't a situation explicitly covered in the contract - but rest assured I'll resolve it in the fairest way I can.

[Rannasha]

Will need to consider carefully how to proceed from here.

In principle the options are :

1.  Move to another exchange,
2.  Close down - and distribute funds approximately in ratio to what market prices were just before the announcement.

Problem with #2 is it's going to be hard to have any sort of rational discussion over how much should go to mining and selling as everyone with an opinion likely has a lot of one and not much of the other so isn't unbiased.  Market prices is the only way to go - as those represent the prices people were happy to hold at (noone was trying hard to buy more of whichever they held or was desperate to sell into bids - or they'd have done so).

If problems arise with recovering investments then loss/delay from that MUST go to SELLING not MINING as SELLING were always getting the benefit from investment.

A few things seem pretty obvious immediately:

1.  No new investments should be made.
2.  Where investments can be cashed out they should be - so there's no further changes in NAV/U.
3.  Debatably I should withdraw all funds to a BTC wallet under my control and only return them when distribution is to occur.
4.  Trading will be disabled on PURCHASE - I won't sell more shares now obviously and also I can't redeem them until I'm sure all investments are safe and will be recoverable.  It would be bad form if I allowed sale back of PURCHASE then found we couldn't get one investment back and so those who had sold back had received more than their fair share.
5.  Similar to 4 I won't be redeeming pairs of MINING+SELLING.

This isn't a situation explicitly covered in the contract - but rest assured I'll resolve it in the fairest way I can.

Personally I'd favour option 1, since DMS was a fun fund to mess around with. But if that's not an option, then the plan you laid out for termination looks fine to me.

[FloatesMcgoates]

Will need to consider carefully how to proceed from here.

In principle the options are :

1.  Move to another exchange,
2.  Close down - and distribute funds approximately in ratio to what market prices were just before the announcement.

Problem with #2 is it's going to be hard to have any sort of rational discussion over how much should go to mining and selling as everyone with an opinion likely has a lot of one and not much of the other so isn't unbiased.  Market prices is the only way to go - as those represent the prices people were happy to hold at (noone was trying hard to buy more of whichever they held or was desperate to sell into bids - or they'd have done so).

If problems arise with recovering investments then loss/delay from that MUST go to SELLING not MINING as SELLING were always getting the benefit from investment.

A few things seem pretty obvious immediately:

1.  No new investments should be made.
2.  Where investments can be cashed out they should be - so there's no further changes in NAV/U.
3.  Debatably I should withdraw all funds to a BTC wallet under my control and only return them when distribution is to occur.
4.  Trading will be disabled on PURCHASE - I won't sell more shares now obviously and also I can't redeem them until I'm sure all investments are safe and will be recoverable.  It would be bad form if I allowed sale back of PURCHASE then found we couldn't get one investment back and so those who had sold back had received more than their fair share.
5.  Similar to 4 I won't be redeeming pairs of MINING+SELLING.

This isn't a situation explicitly covered in the contract - but rest assured I'll resolve it in the fairest way I can.

The problem with option 2 that you present is that there was a severe price imbalance the last few days where purchasing selling and mining individually would add up to be a fair degree less than the cost of a PURCHASE, making it hard to accurately determine ratios. Furthermore, I think that actually attempting to determine anything based on "what seems to be fair/correct" will devolve into a shouting contest between the two sides in which the outcome will more or less be purely subjective.

Anyway, I would prefer to not move to another exchange but rather follow through with the buyback clause that was in the contract.

[baloo_kiev]

Maybe you should consider transfering to another exchange and stop selling PURCHASE at the same time?

[Rannasha]

Will need to consider carefully how to proceed from here.

In principle the options are :

1.  Move to another exchange,
2.  Close down - and distribute funds approximately in ratio to what market prices were just before the announcement.

Problem with #2 is it's going to be hard to have any sort of rational discussion over how much should go to mining and selling as everyone with an opinion likely has a lot of one and not much of the other so isn't unbiased.  Market prices is the only way to go - as those represent the prices people were happy to hold at (noone was trying hard to buy more of whichever they held or was desperate to sell into bids - or they'd have done so).

If problems arise with recovering investments then loss/delay from that MUST go to SELLING not MINING as SELLING were always getting the benefit from investment.

A few things seem pretty obvious immediately:

1.  No new investments should be made.
2.  Where investments can be cashed out they should be - so there's no further changes in NAV/U.
3.  Debatably I should withdraw all funds to a BTC wallet under my control and only return them when distribution is to occur.
4.  Trading will be disabled on PURCHASE - I won't sell more shares now obviously and also I can't redeem them until I'm sure all investments are safe and will be recoverable.  It would be bad form if I allowed sale back of PURCHASE then found we couldn't get one investment back and so those who had sold back had received more than their fair share.
5.  Similar to 4 I won't be redeeming pairs of MINING+SELLING.

This isn't a situation explicitly covered in the contract - but rest assured I'll resolve it in the fairest way I can.

The problem with option 2 that you present is that there was a severe price imbalance the last few days where purchasing selling and mining individually would add up to be a fair degree less than the cost of a PURCHASE, making it hard to accurately determine ratios. Furthermore, I think that actually attempting to determine anything based on "what seems to be fair/correct" will devolve into a shouting contest between the two sides in which the outcome will more or less be purely subjective.

Anyway, I would prefer to not move to another exchange but rather follow through with the buyback clause that was in the contract.

Honestly, with any solution there will be people dissatisfied, that unavoidable in a situation like this.

I personally feel that a splitting the funds proportionally based on something like the 7-day average price (exact parameters may vary) of both assets would be a reasonably fair distribution.

That said, I've fully covered my (smallish) position by ensuring that I have the same amount of MINING and SELLING, which means that regardless of the buyback plan, I will not lose too much.

[lenny_]

+1 for moving to another exchange. Why closing such professional and well thought assets?

[FloatesMcgoates]

Will need to consider carefully how to proceed from here.

In principle the options are :

1.  Move to another exchange,
2.  Close down - and distribute funds approximately in ratio to what market prices were just before the announcement.

Problem with #2 is it's going to be hard to have any sort of rational discussion over how much should go to mining and selling as everyone with an opinion likely has a lot of one and not much of the other so isn't unbiased.  Market prices is the only way to go - as those represent the prices people were happy to hold at (noone was trying hard to buy more of whichever they held or was desperate to sell into bids - or they'd have done so).

If problems arise with recovering investments then loss/delay from that MUST go to SELLING not MINING as SELLING were always getting the benefit from investment.

A few things seem pretty obvious immediately:

1.  No new investments should be made.
2.  Where investments can be cashed out they should be - so there's no further changes in NAV/U.
3.  Debatably I should withdraw all funds to a BTC wallet under my control and only return them when distribution is to occur.
4.  Trading will be disabled on PURCHASE - I won't sell more shares now obviously and also I can't redeem them until I'm sure all investments are safe and will be recoverable.  It would be bad form if I allowed sale back of PURCHASE then found we couldn't get one investment back and so those who had sold back had received more than their fair share.
5.  Similar to 4 I won't be redeeming pairs of MINING+SELLING.

This isn't a situation explicitly covered in the contract - but rest assured I'll resolve it in the fairest way I can.

The problem with option 2 that you present is that there was a severe price imbalance the last few days where purchasing selling and mining individually would add up to be a fair degree less than the cost of a PURCHASE, making it hard to accurately determine ratios. Furthermore, I think that actually attempting to determine anything based on "what seems to be fair/correct" will devolve into a shouting contest between the two sides in which the outcome will more or less be purely subjective.

Anyway, I would prefer to not move to another exchange but rather follow through with the buyback clause that was in the contract.

Honestly, with any solution there will be people dissatisfied, that unavoidable in a situation like this.

I personally feel that a splitting the funds proportionally based on something like the 7-day average price (exact parameters may vary) of both assets would be a reasonably fair distribution.

That said, I've almost covered my (smallish) position by ensuring that I have the same amount of MINING and SELLING, which means that regardless of the buyback plan, I will not lose too much.

Undoubtedly, there will be people disappointed with any one buyback plan. Equally undoubtedly, I do not want to be on the wrong side of any buyback plan  . It's just that in this scenario, the method in which a buyback would operate seems to have already been fairly reasonably described in the contract, and I would rather see this particular method executed than any plan hatched in the last few or next few hours.

Also, I was previously an exclusive holder of SELLING. And as you have done, I have moved to purchase shares on the other side of the coin in order to properly hedge against any potentially hazardous proceedings going forward.


Lastly, if Deprived were to close down and buy out shares right now, there is nothing stopping him from starting right back up on another exchange fresh. Given how this particular asset works, such a plan could be carried out with relative ease. This allows people who want to get out (such as myself) and people who want to continue playing to both be satisfied.

[Rannasha]

Will need to consider carefully how to proceed from here.

In principle the options are :

1.  Move to another exchange,
2.  Close down - and distribute funds approximately in ratio to what market prices were just before the announcement.

Problem with #2 is it's going to be hard to have any sort of rational discussion over how much should go to mining and selling as everyone with an opinion likely has a lot of one and not much of the other so isn't unbiased.  Market prices is the only way to go - as those represent the prices people were happy to hold at (noone was trying hard to buy more of whichever they held or was desperate to sell into bids - or they'd have done so).

If problems arise with recovering investments then loss/delay from that MUST go to SELLING not MINING as SELLING were always getting the benefit from investment.

A few things seem pretty obvious immediately:

1.  No new investments should be made.
2.  Where investments can be cashed out they should be - so there's no further changes in NAV/U.
3.  Debatably I should withdraw all funds to a BTC wallet under my control and only return them when distribution is to occur.
4.  Trading will be disabled on PURCHASE - I won't sell more shares now obviously and also I can't redeem them until I'm sure all investments are safe and will be recoverable.  It would be bad form if I allowed sale back of PURCHASE then found we couldn't get one investment back and so those who had sold back had received more than their fair share.
5.  Similar to 4 I won't be redeeming pairs of MINING+SELLING.

This isn't a situation explicitly covered in the contract - but rest assured I'll resolve it in the fairest way I can.

The problem with option 2 that you present is that there was a severe price imbalance the last few days where purchasing selling and mining individually would add up to be a fair degree less than the cost of a PURCHASE, making it hard to accurately determine ratios. Furthermore, I think that actually attempting to determine anything based on "what seems to be fair/correct" will devolve into a shouting contest between the two sides in which the outcome will more or less be purely subjective.

Anyway, I would prefer to not move to another exchange but rather follow through with the buyback clause that was in the contract.

Honestly, with any solution there will be people dissatisfied, that unavoidable in a situation like this.

I personally feel that a splitting the funds proportionally based on something like the 7-day average price (exact parameters may vary) of both assets would be a reasonably fair distribution.

That said, I've almost covered my (smallish) position by ensuring that I have the same amount of MINING and SELLING, which means that regardless of the buyback plan, I will not lose too much.

Undoubtedly, there will be people disappointed with any one buyback plan. Equally undoubtedly, I do not want to be on the wrong side of any buyback plan  . It's just that in this scenario, the method in which a buyback would operate seems to have already been fairly reasonably described in the contract, and I would rather see this particular method executed than any plan hatched in the last few or next few hours.

Also, I was previously an exclusive holder of SELLING. And as you have done, I have moved to purchase shares on the other side of the coin in order to properly hedge against any potentially hazardous proceedings going forward.

Same here, I was SELLING-only (except for the brief moments where my arb-bot hit a good trade), but now I'm fully split. I bought MINING at a reasonable discount compared to what it was previously trading at and if all of the investments of DMS can be liquidated properly, I should even make a tiny profit.

Lastly, if Deprived were to close down and buy out shares right now, there is nothing stopping him from starting right back up on another exchange fresh. Given how this particular asset works, such a plan could be carried out with relative ease. This allows people who want to get out (such as myself) and people who want to continue playing to both be satisfied.

Havelock and BitFunder don't have the necessary API-functions for a transfer-bot (yet). And I don't know how eager Deprived will be to do manual transfers again.

[Deprived]

The problem with option 2 that you present is that there was a severe price imbalance the last few days where purchasing selling and mining individually would add up to be a fair degree less than the cost of a PURCHASE, making it hard to accurately determine ratios. Furthermore, I think that actually attempting to determine anything based on "what seems to be fair/correct" will devolve into a shouting contest between the two sides in which the outcome will more or less be purely subjective.

Anyway, I would prefer to not move to another exchange but rather follow through with the buyback clause that was in the contract.

If MINING + SELLING was X% less than the NAV/U of PURCHASE (which, remember, is 5% LESS than the selling price of PURCHASE) then it's rather simple to convert them to add up to NAV/U whilst being in the same ratio to one another.

I'm not sure which buyback clause in the contract you refer to:

If you refer to repurchasing PURCHASE and matching bundles of MINING+SELLING then yes - that will of course be possible once we've established what NAV/U is.  The only real issue I see with determining NAV/U will be the Ciphermine bonds.  Those won't be refunded by the issuer as the cash from them has been used to purchase mining hardware.  If the bonds relists elsewhere then there's no problem - otherwise, per the contract, we have to give notice of redemption and wait three months with zero interest before the cash arrives.  And until it does I can't in good conscience include it in the NAV/U.

The contract, on closure for exceptional reasons (which this is) says :

"Propose a split of funds between DMS.MINING and DMS.SELLING to be approved by a majority vote by both all outstanding DMS.MINING and all outstanding DMS.SELLING.

In the event of a vote with a proposal to split funds being left up for 7 days and (in either vote) the total of (Yes votes + No votes) being less than 50% of all outstanding shares then the Manager will determine a fair (in his best judgement) split of funds and execute final payments in accordance with that decision.  This clause is added specifically to address the scenario where most shares have been redeemed with a large part of those remaining outstanding being unable or unwilling to participate in reaching closure."

That's aside from the option of getting a new manager which clearly isn't an option here.  Moving to a different exchange wasn't covered in the contract - but if that proves easy to do then I'll certainly consider it, even if only to let existing shares run their natural course.

At present everything will continue as normal in terms of dividends etc - just there'll be no trading of PURCHASE and no redemptions.  Swaps of PURCHASE for MINING+SELLING will still be allowed.

There's no need to resolve it today - and no way I can anyway as I need to find out what's happening with the CIPHERMINE bonds, see what options are available and get as much feedback as possible.

[Deprived]

Havelock and BitFunder don't have the necessary API-functions for a transfer-bot (yet). And I don't know how eager Deprived will be to do manual transfers again.

One change I'd make if I started this anew without bot transfers possible is that I'd make 1 PURCHASE = 1000 MINING+SELLING (or even 5000).  That would cut transfers right down as I'd only sell to people who were either taking a large position or actively market-making.  And they'd have more incentive to do it due to not being undercut by bots buying 1 purchase, splitting it then trying to sell the components seperately for a fraction of a cent profit.

[Rannasha]

Havelock and BitFunder don't have the necessary API-functions for a transfer-bot (yet). And I don't know how eager Deprived will be to do manual transfers again.

And they'd have more incentive to do it due to not being undercut by bots buying 1 purchase, splitting it then trying to sell the components seperately for a fraction of a cent profit.

Aww... It's not my bots fault that people kept buying into its SELLING ask 1 share at a time

[baloo_kiev]

Havelock and BitFunder don't have the necessary API-functions for a transfer-bot (yet). And I don't know how eager Deprived will be to do manual transfers again.

One change I'd make if I started this anew without bot transfers possible is that I'd make 1 PURCHASE = 1000 MINING+SELLING (or even 5000).  That would cut transfers right down as I'd only sell to people who were either taking a large position or actively market-making.  And they'd have more incentive to do it due to not being undercut by bots buying 1 purchase, splitting it then trying to sell the components seperately for a fraction of a cent profit.

This will probably cause monopoly of those market-makers with little people having to benefit them.

[Deprived]

Havelock and BitFunder don't have the necessary API-functions for a transfer-bot (yet). And I don't know how eager Deprived will be to do manual transfers again.

And they'd have more incentive to do it due to not being undercut by bots buying 1 purchase, splitting it then trying to sell the components seperately for a fraction of a cent profit.

Aww... It's not my bots fault that people kept buying into its SELLING ask 1 share at a time

Wasn't your bot I was thinking of - it was the other one that would sometimes do 3-4 tiny buys of PURCHASE + swaps in a minute.

[Deprived]

I just did a final full repurchase at face value on LTC-ATF.B1.

DMS held 9071 of them so should, after conversion from LTC receive exactly 90.71 BTC.

For now that 90.71 is reserved in my own wallet - seems unwise right now to transfer it into BTC-TC until we know what we're doing.  It'll stay listed in daily reports as being LTC-ATF.B1 - but is actually cash BTC now (the LTC received are being used to buy out LTC-ATF - seemed pointless for DMS to exchange them into BTC, losing out on fees/spread, when I have plenty of liquid BTC myself and needed to get more LTC onto LTC-Global anyway).