[BTC-TC] Deprived Mining Speculation (DMS)

[Rannasha]

If we haven't managed to move by the end of October when BTC-TC closes then we'd shut down.  At that stage mining would be paid thier amount in full immediately, SELLING would get whatever was left.  If there was still CIPHERMINE.B1 not sold then I'd have to do a final dividend manually when we sold them.

But Deprived has clearly said mining would be paid their amount in full immediately.

In case of a split of the asset funds, the amount that MINING has been assigned would be paid immediately from BTC being held. Since part of the funds are still tied up in Ciphermine bonds, SELLING would only receive their full amount once those have been liquidated. In his post Deprived makes no statements on what "their amount" would be for MINING, only that it would be paid immediately.

Which by the way makes it contradict with the assumption that MINING gets 365 of days of dividend, since Ciphermine makes up ~20% of the funds capital, while 365 days of dividend is close to 90% of the NAV. So there isn't enough BTC to pay MINING in full if they receive 365 dividend days.

Ok, fair enough. So how split between Selling and Mining is still a secret, right? But anyway, I think most likely it will be relisted, so it does not matter.

Yes, it doesn't make sense to announce what a split would be before the final decission to close the fund has been made and trading has been locked.

[BitThink]

If we haven't managed to move by the end of October when BTC-TC closes then we'd shut down.  At that stage mining would be paid thier amount in full immediately, SELLING would get whatever was left.  If there was still CIPHERMINE.B1 not sold then I'd have to do a final dividend manually when we sold them.

But Deprived has clearly said mining would be paid their amount in full immediately.

Right - but you seem confused over what "their amount" is.

As Rannasha pointed out, any closure would be because DMS can't  continue - not because of a vote by SELLING.  Under the contract the option I have (ignoring finding a new manager which obviously isn't practical) is to put up a vote with a proposed split and try to get both MINING and SELLING to agree it.

But if I do that, then I also have to stop paying dividends - as I can't have a 7 day long vote up with proposals that may not even be relevant a week later (if difficulty rises or falls by a lot).  And I can't even propose a split until I know what's happening with CL and CIPHERMINE.B1 - as I don't know how much there is to be split (though in theory I could get around that one by proposing an amount for MINING with SELLING getting the rest).

So at present we end up falling back on the final clause - that I have to decide the split myself.  Because the problem is that if I put up a proposal and it fails there won't be time to do a second one anyway.  So I'd end up having to decide myself - at which point I'd likely go with what I proposed (but was voted down on) anyway.  Which makes the vote pointless - as there's no way to act on (and get approval for) any revision to it.

IF the vote had indiciated most wanted to close then I MAY have considered halting all dividends and putting up a proposal for vote.  But as a clear majority wants to relist it seems rather silly to screw the market up and cause confusion when most likely we'll just be moving anyway.

EDIT: Just to be asolutely clear, no split I proposed or unilaterally imposed would be giving MINING anywhere NEAR 365 days of dividends.  And it won't be susceptible to market manipulation (by someone trying to move the price on low volume) either.  Once we've relisted (if we do) someone feel free to ask me how I was going to do it - and I'll explain it in detail.

Thanks. That makes sense totally.

Just wonder why DMS.MINING dropped so much. Maybe all people think the split will be beneficial to SELLING? But now it is quite clear relisting is almost decided, so I think the MINING price is a little bit under-priced.   (Admit now I am trying to push the MINING price up. Just a little effort to reduce the lost caused by my confusion, upon which I rushed to buy the MINING and pushed the price to a high level. )

[Deprived]

Yes, it doesn't make sense to announce what a split would be before the final decission to close the fund has been made and trading has been locked.

Yeah, at this stage if it becomes apparent we won't be able to relist then I'd wipe the order books, announce the split (and explain how I got the numbers), make MINING their full payment and SELLING a partial payment.

If it reaches a stage where relisting looks unlikely then I MAY:

1.  WIpe order books,
2.  Explain how I'd split if the fund closes,
3.  Reopen order books

Then people can make their own call on whether they want to trade based on what they believe the shares are worth if we continue or on what they believe they'll get if we close.

Right now I rate closure as unlikely - so it would do more harm than good for me to give numbers that most likely have no meaning.  But if closure becomes likely I'll definitely reconsider.

Comments on that general approach are definitely welcome - I don't want to distort the market, but nor would I want people buying one or the other of MINING/SELLING if I knew there was a high chance they'd get a lot less back from an imminent closure.  Right now I rate closure as low enough probability that the harm from disclosure outweighs the benefits.

[Rannasha]

If we haven't managed to move by the end of October when BTC-TC closes then we'd shut down.  At that stage mining would be paid thier amount in full immediately, SELLING would get whatever was left.  If there was still CIPHERMINE.B1 not sold then I'd have to do a final dividend manually when we sold them.

But Deprived has clearly said mining would be paid their amount in full immediately.

Right - but you seem confused over what "their amount" is.

As Rannasha pointed out, any closure would be because DMS can't  continue - not because of a vote by SELLING.  Under the contract the option I have (ignoring finding a new manager which obviously isn't practical) is to put up a vote with a proposed split and try to get both MINING and SELLING to agree it.

But if I do that, then I also have to stop paying dividends - as I can't have a 7 day long vote up with proposals that may not even be relevant a week later (if difficulty rises or falls by a lot).  And I can't even propose a split until I know what's happening with CL and CIPHERMINE.B1 - as I don't know how much there is to be split (though in theory I could get around that one by proposing an amount for MINING with SELLING getting the rest).

So at present we end up falling back on the final clause - that I have to decide the split myself.  Because the problem is that if I put up a proposal and it fails there won't be time to do a second one anyway.  So I'd end up having to decide myself - at which point I'd likely go with what I proposed (but was voted down on) anyway.  Which makes the vote pointless - as there's no way to act on (and get approval for) any revision to it.

IF the vote had indiciated most wanted to close then I MAY have considered halting all dividends and putting up a proposal for vote.  But as a clear majority wants to relist it seems rather silly to screw the market up and cause confusion when most likely we'll just be moving anyway.

EDIT: Just to be asolutely clear, no split I proposed or unilaterally imposed would be giving MINING anywhere NEAR 365 days of dividends.  And it won't be susceptible to market manipulation (by someone trying to move the price on low volume) either.  Once we've relisted (if we do) someone feel free to ask me how I was going to do it - and I'll explain it in detail.

Thanks. That makes sense totally.

Just wonder why DMS.MINING dropped so much. Maybe all people think the split will be beneficial to SELLING? But now it is quite clear now relisting is almost decided, so I think the MINING price is a little bit under-priced.   (Admit now I am trying to push the MINING price up. Just a little effort to reduce the lost caused by my confusion, upon which I rushed to buy the MINING and pushed the price to a high level. )

If you look at the graph of MINING, you'll see that it was already in strong decline before the BTCT announcement hit. The BTCT announcement mostly hurt the price of SELLING (which dropped to 0.0045 at some point, thanks for that btw!), which has mostly recovered since.

I think that the drop of MINING is more due to people readjusting their view on how things are to be valued than anything to do with the BTCT closure.

[BitThink]

If we haven't managed to move by the end of October when BTC-TC closes then we'd shut down.  At that stage mining would be paid thier amount in full immediately, SELLING would get whatever was left.  If there was still CIPHERMINE.B1 not sold then I'd have to do a final dividend manually when we sold them.

But Deprived has clearly said mining would be paid their amount in full immediately.

Right - but you seem confused over what "their amount" is.

As Rannasha pointed out, any closure would be because DMS can't  continue - not because of a vote by SELLING.  Under the contract the option I have (ignoring finding a new manager which obviously isn't practical) is to put up a vote with a proposed split and try to get both MINING and SELLING to agree it.

But if I do that, then I also have to stop paying dividends - as I can't have a 7 day long vote up with proposals that may not even be relevant a week later (if difficulty rises or falls by a lot).  And I can't even propose a split until I know what's happening with CL and CIPHERMINE.B1 - as I don't know how much there is to be split (though in theory I could get around that one by proposing an amount for MINING with SELLING getting the rest).

So at present we end up falling back on the final clause - that I have to decide the split myself.  Because the problem is that if I put up a proposal and it fails there won't be time to do a second one anyway.  So I'd end up having to decide myself - at which point I'd likely go with what I proposed (but was voted down on) anyway.  Which makes the vote pointless - as there's no way to act on (and get approval for) any revision to it.

IF the vote had indiciated most wanted to close then I MAY have considered halting all dividends and putting up a proposal for vote.  But as a clear majority wants to relist it seems rather silly to screw the market up and cause confusion when most likely we'll just be moving anyway.

EDIT: Just to be asolutely clear, no split I proposed or unilaterally imposed would be giving MINING anywhere NEAR 365 days of dividends.  And it won't be susceptible to market manipulation (by someone trying to move the price on low volume) either.  Once we've relisted (if we do) someone feel free to ask me how I was going to do it - and I'll explain it in detail.

Thanks. That makes sense totally.

Just wonder why DMS.MINING dropped so much. Maybe all people think the split will be beneficial to SELLING? But now it is quite clear now relisting is almost decided, so I think the MINING price is a little bit under-priced.   (Admit now I am trying to push the MINING price up. Just a little effort to reduce the lost caused by my confusion, upon which I rushed to buy the MINING and pushed the price to a high level. )

If you look at the graph of MINING, you'll see that it was already in strong decline before the BTCT announcement hit. The BTCT announcement mostly hurt the price of SELLING (which dropped to 0.0045 at some point, thanks for that btw!), which has mostly recovered since.

I think that the drop of MINING is more due to people readjusting their view on how things are to be valued than anything to do with the BTCT closure.

Yes, you are right SELLING dropped more upon the announcement.
Regards MINING, I think one reason could be that a lot of hashing power is supposed to be deployed in October and November. Another reason is that previously MINING price is mainly driven high by the speculation, so now the price decreases with the liquidity together. I still think it will recover once it is re-listed on an exchange with enough liquidity.

[vandinn]

Deprived, I really do not understand, why we should only get 99% of NAV/U? It's ok if people want to continue, but the ones who do not should be given the chance to get a fair deal.

The contract is quite explicit in terms of what will happen in unforseen circumstances.

Cease making new investments,
Liquidate investments where possible,
Cease selling new DMS.PURCHASE
Offer redemption at 100% (less any exchange fees) of NAV/U for DMS.PURCHASE and bundles of equal numbers of DMS.MINING and DMS.SELLING where it is possible to do so whilst retaining at least 50 days dividend cover in liquid BTC for the remaining DMS.MINING.


Either way, the fund is closing down. It may reopen on a different exchange, with very similar contract (but not quite the same), it may offer the redemption of Mining and Selling for Mining and Selling on the new exchange. That is all fine with me. You have proceeded with the first three steps, I believe you should with the last one as well. (I have read everything up until now and agree that we wait for the CL coins.)



Disclaimer: I own slightly above 6% of Mining and Selling. I bought the overpriced Mining only after the BTCT announcement of its closure, exactly because of this part of the contract.)

[Deprived]

Deprived, I really do not understand, why we should only get 99% of NAV/U? It's ok if people want to continue, but the ones who do not should be given the chance to get a fair deal.

The contract is quite explicit in terms of what will happen in unforseen circumstances.

Cease making new investments,
Liquidate investments where possible,
Cease selling new DMS.PURCHASE
Offer redemption at 100% (less any exchange fees) of NAV/U for DMS.PURCHASE and bundles of equal numbers of DMS.MINING and DMS.SELLING where it is possible to do so whilst retaining at least 50 days dividend cover in liquid BTC for the remaining DMS.MINING.


Either way, the fund is closing down. It may reopen on a different exchange, with very similar contract (but not quite the same), it may offer the redemption of Mining and Selling for Mining and Selling on the new exchange. That is all fine with me. You have proceeded with the first three steps, I believe you should with the last one as well. (I have read everything up until now and agree that we wait for the CL coins.)



Disclaimer: I own slightly above 6% of Mining and Selling. I bought the overpriced Mining only after the BTCT announcment of its closure, exactly because of this part of the contract.)

In theory I agree with you - and if ALL investments were 100% BTC then I'd do that.  Problem is that it's highly unlikely we'll have the option to convert CIPHERMINE.B1 into BTC by then.  Even if we're promised it'll later become liquid it still can't truly be valued at full face value whlst it isn't tradable.  So some discount to its value has to be applied.

Easiest way around it to be totally fair would be to do all redemptions by sending cash plus a portion of CIPHERMINE.B1 - but we still have the problem of very small holdings too low to give even 1 CIPHERMINE.B1.

If I have the option of liquidiating it then yes - I'd give 100% NAV/U.  If I don't have that option then I'd probably have to give cash + some of them and then slightly under NAV/U for tiny holdings.

As you correctly point out - if the contract changes then it MUST be considered as being an effective closure/reopening, so the general rule is that anyone choosing to sell out should get precisely their fair share of NAV/U.  The 99% NAV/U was intended as a means to pay in all cash whilst reflecting the fact that a significant portion of assets weren't actually liquid (assuming I was satisifed there was every intent to honour the bond commitments).  Any time risk is passed to someone else there MUST be a cost associated with it.

EDIT:  Just realised in a previous post I'd referred to paying 99% of NAV/U + some bonds.  That is incorrect - if everything bar the bonds is in cash then one-time redemptions before moving would be at 100% NAV/U (excluding bonds) + bonds.  That much is definite.

[vandinn]

EDIT:  Just realised in a previous post I'd referred to paying 99% of NAV/U + some bonds.  That is incorrect - if everything bar the bonds is in cash then one-time redemptions before moving would be at 100% NAV/U (excluding bonds) + bonds.  That much is definite.

Thanks, that's what I was refering to. (Should have quoted it.)

[Deprived]

BTC Balance (BTC-TC)   1132.709586
9071 LTC-ATF.B1    90.71000000
CIPHERMINE Bonds    360.61000000
Coinlenders CD 27/9   203.3303975
Coinlenders Cash   0
Just-Dice Balance    153.86146722
TOTAL ASSETS    1,941.22145068
   
Outstanding MINING   210981
Outstanding SELLING   210981
Outstanding PURCHASE   14397
Effective Units   225378
   
Block reward   25
Difficulty   112,628,549
Hashes per MINING   5000000
   
Daily Dividend    0.00002233
50 days (Min Liquid)    0.00111629
100 days (Forced Close)    0.00223259
365 days (Buyback)    0.00814895
405 days (IPO)    0.00904199
400 days (Post SELLING div)    0.00893036
410 days (Pre SELLING div)    0.00915361
   
NAV Post MINING Div    1,936.18968626
NAV/U Post MINING Div    0.00859085
Days Dividend Post Div   384.79
SELLING Dividend    -         
NAV Post SELLING Div    1,936.18968626
NAV/U Post Selling Div    0.00859085

Posting report slightly early as I have to go out later and may not be aorund at usual time.  Dividends are set for usual time of course.  As I don't have to update PURCHASE orders I can post the reports in advance now - other than when it's SELLING dividend day (which is tomorrow).

[twentyseventy]

I've been very happy with the operation of this asset until this time. Deprived, you stated that you had a good idea that the closure of BTCT was coming - why did you still continue to pursue an investment in CIPHERMINE if the liquidity of these bonds could have been such an issue, especially at such an early date?

SELLING did approve the investment, so a significant amount of responsibility lies there, but this investment is only 1-2 weeks old and there is already talk of liquidation value.

[Rannasha]

Difficulty just jumped by 32%. Tomorrows SELLING dividend will be 1.189 mBTC, the new MINING dividend will be 1690 satoshi per day.

[FloatesMcgoates]

Deprived, the offer of exchanging MINING+SELLING for some of NAV/U and then a certain amount of CIPHERMINE bonds that could be sold into the market represents a loss of 23% off of original NAV/U. This is made worse by the statements that Kate has given regarding her lack of interest in dealing with small owners of her securities. As you are a major holder, I and i'm sure many of the other individuals who want to exchange MINING+SELLING for NAV/U*.99 would like to see you continue to try and get the bonds redeemed at face value as quickly as possible.

[twentyseventy]

Deprived, the offer of exchanging MINING+SELLING for some of NAV/U and then a certain amount of CIPHERMINE bonds that could be sold into the market represents a loss of 23% off of original NAV/U. This is made worse by the statements that Kate has given regarding her lack of interest in dealing with small owners of her securities. As you are a major holder, I and i'm sure many of the other individuals who want to exchange MINING+SELLING for NAV/U*.99 would like to see you continue to try and get the bonds redeemed at face value as quickly as possible.

I second this motion. IF it's necessary to liquidate the bonds at this time, DMS shouldn't be taking any discount off of the face value. Nothing about BTCT closing has affected the underlying business that the bond payments were relying on.

If Kate decides to move to another exchange, I don't see any reason not to continue to hold the bonds.

[Deprived]

I've been very happy with the operation of this asset until this time. Deprived, you stated that you had a good idea that the closure of BTCT was coming - why did you still continue to pursue an investment in CIPHERMINE if the liquidity of these bonds could have been such an issue, especially at such an early date?

SELLING did approve the investment, so a significant amount of responsibility lies there, but this investment is only 1-2 weeks old and there is already talk of liquidation value.

I only became confident that was the case within the last week - after the CIPHERMINE.B1 investment.  I wouldn't have proposed it or done it if I'd believed at the time that there was a significant likelihood of BTC-TC's imminent demise.  My belief changed from "he's having to pay lawyers to tidy up the TOS and/or get rid of US customers" to "This looks like closure is a real likelihood" at the point where signups and asset creation were disabled and he didn't respond to the initial queries about it whilst answering other questions.

That belief is why, the evening before BTC-TC close, I sold back 1K CIPHERMINE.B1 at about .0103.  Until then I'd only been trickling them out at .0105+.  At that point, whilst I still rated closure as a fairly likely outcome. I DID expect there to be significantly more time until the shit hit the fan : so I didn't want to scare the market down.

[Deprived]

Deprived, the offer of exchanging MINING+SELLING for some of NAV/U and then a certain amount of CIPHERMINE bonds that could be sold into the market represents a loss of 23% off of original NAV/U. This is made worse by the statements that Kate has given regarding her lack of interest in dealing with small owners of her securities. As you are a major holder, I and i'm sure many of the other individuals who want to exchange MINING+SELLING for NAV/U*.99 would like to see you continue to try and get the bonds redeemed at face value as quickly as possible.

No it doesn't represent a loss of 23% of NAV/U.  It would represent a loss of 20% of 23% of NAV/U - so a bit over 4%.

And that loss would only be for those who chose to sell out AND chose to then sell the CIPHERMINE.B1 into bids on the market.

If you're aware of some option I'm missing to redeem the bonds at face value then let me know - the only option I know of is to give 3 months notice and surrender all right to dividends in the meantime.  Which anyone who cashes out will be entirely entitled to do with their own bonds once they get them.

For those who don't cash out, I obviously intend to try to liquidate CIPHERMINE.B1 down to under 25% of capital as soon as I can (assuming it gets above that after next difficulty change).  My belief is that we risk more trying to request a cashout immediately (which would only occur in 3 months) than waiting a week or so to see what Kate proposes.

In short, excessively chasing these up right now would be less likely to get us what we want (to continue to get our interest and be able to slowly sell them off at face value) than having a bit of patience.  Once I have convincing assurances then, at worst, I'd offer to buy them back personally off investors at much nearer face value than the market gives.  And once I have such assurancces then, at worst, those looking to cash before moving would get either bonds + 100% of remainder of NAV OR the 98% of NAV promised in the contract.  Without the actual ability to sell at face value there'd always be a discount on cash withdrawals - as all risk associated with those bonds backing your share of NAV is being left for those not cashing out.

[Deprived]

Difficulty just jumped by 32%. Tomorrows SELLING dividend will be 1.189 mBTC, the new MINING dividend will be 1690 satoshi per day.

Agree with the new MINING dividend but getting a very different SELLING dividend.  This is EXACTLY what tomorrow's report will look other than a minor adjustment up in the Coinlenders CD (which I actually didn't do in last report - but it has trivial impact):

BTC Balance (BTC-TC)   1132.709586
9071 LTC-ATF.B1    90.71000000
CIPHERMINE Bonds    360.61000000
Coinlenders CD 27/9   203.3303975
Coinlenders Cash   0
Just-Dice Balance    153.86146722
TOTAL ASSETS    1,941.22145068
   
Outstanding MINING   210981
Outstanding SELLING   210981
Outstanding PURCHASE   14397
Effective Units   225378
   
Block reward   25
Difficulty   148,819,200
Hashes per MINING   5000000
   
Daily Dividend    0.00001690
50 days (Min Liquid)    0.00084483
100 days (Forced Close)    0.00168966
365 days (Buyback)    0.00616724
405 days (IPO)    0.00684311
400 days (Post SELLING div)    0.00675862
410 days (Pre SELLING div)    0.00692759
   
NAV Post MINING Div    1,937.41333771
NAV/U Post MINING Div    0.00859628
Days Dividend Post Div   508.76
SELLING Dividend    0.00183766
NAV Post SELLING Div    1,523.24518627
NAV/U Post Selling Div    0.00675862

[HowlingMad]

   
NAV Post MINING Div    1,937.41333771
NAV/U Post MINING Div    0.00859628
Days Dividend Post Div   508.76
SELLING Dividend    0.00183766
NAV Post SELLING Div    1,523.24518627
NAV/U Post Selling Div    0.00675862
[/quote] Sorry first time I am reading one of these reports so forgive the ignorance.  Selling will get 0.00675863 for the ten-day dividend and Purchase gets none because it is frozen?
Thanks for your time, HowlingMad

[Deprived]

   
NAV Post MINING Div    1,937.41333771
NAV/U Post MINING Div    0.00859628
Days Dividend Post Div   508.76
SELLING Dividend    0.00183766
NAV Post SELLING Div    1,523.24518627
NAV/U Post Selling Div    0.00675862

Sorry first time I am reading one of these reports so forgive the ignorance.  Selling will get 0.00675863 for the ten-day dividend and Purchase gets none because it is frozen?
Thanks for your time, HowlingMad
[/quote]

PURCHASE gets the MINING dividend AND the SELLING dividend - as each PURCHASE is exactly same as 1 MINING + 1 SELLING.

The .00675862 is the NAV/U (value) of each PURCHASE (or each pair of MINING+SELLING) after the dividends are paid.

The SELLING dividend is : SELLING Dividend    0.00183766

Every PURCHASE will get that AND the MINING dividend tomorrow.

[HowlingMad]

Thanks much!  Enjoy your night out and have one on me.

[Rannasha]

Difficulty just jumped by 32%. Tomorrows SELLING dividend will be 1.189 mBTC, the new MINING dividend will be 1690 satoshi per day.

Agree with the new MINING dividend but getting a very different SELLING dividend.

Yeah, I found an error in my calculation. I don't have access to my desktop machine with most of my Mathematica notebooks (including DMS calculations that do tend to give good results), so I hastily slapped something together.