[Havelock] Bitcoin Difficulty Derivative (BDD)

[nycgoat]

Quick question, If I bought B.SELL now would it be entitled to the dividend? thats getting paid today?

Thanks
Red

They are paid at 12 noon EST the period after the last difficulty change for SELL.  For MINE they are paid at 12 noon every day EST.  Divs are processed once an hour by a script on Havelock supposedly.  

Last difficulty change, SELL divs were paid at 1pm EST due to the script having to be reconfigured.

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[twentyseventy]

Quick question, If I bought B.SELL now would it be entitled to the dividend? thats getting paid today?

Thanks
Red

Yep, all shares of SELL issued as of Noon ET tomorrow are eligible for the dividend. I will take down the EXCH ask around 1130AM tomorrow, so no new SELL/MINE pairs will be issued between that time and when the dividend is paid.

[twentyseventy]

Period 2 End Report - February 17, 2014


Previous Units              695
EXCH Sold                   1227
Less Buybacks              1
New Total Units            1921

Previous Balance          133.33297597
Price per EXCH             0.19376446
Gross Sales of EXCH      237.7489924

Less Fees                    0.9385551
Less Dividends              14.8872496
Less Buybacks              0.18926722
Net Balance                  355.06689645


End of Period 2 NAV/U     0.18483440

New Difficulty               3,129,573,175
New Daily Dividend      0.00080347
New Reserve                0.16069400

NAV/U Less New Reserve = 0.18483440 - 0.16069400 = 0.0241404

SELL Dividend                 0.02414040

You'll notice that I calculate the new Dividend to eight digits and multiply that times 200 Days to get the new Reserve. Those of you that did your own calculations may come up with a slightly different number if you chose not to round or to round elsewhere.

New EXCH Sales Price          0.16230094

In the future I'll be taking down the EXCH ask at 11AM instead of 1130AM to ensure I've got plenty of time to go over my numbers.

[twentyseventy]

Period 3, Day 1 Report - February 17, 2014

Balance Post Divs: BTC 307.14972218

Total Units: 1921

NAV/U: BTC 0.15989053



All Dividends for MINE and SELL have been paid and the EXCH ask is back up at 0.16230094!

[twentyseventy]

Period 3, Day 2 Report - February 18, 2014

Balance Post Divs: BTC 336.97166824

Total Units: 2116

NAV/U: BTC 0.1592493706

[twentyseventy]

Period 3, Day 3 Report - February 19, 2014

Balance Post Divs: BTC 360.36385527

Total Units: 2272 (as of Noon)

NAV/U: BTC 0.15861085


Guys, again, please don't purchase EXCH in the five minutes before Noon - even if I'm able to issue the MINE/SELL shares, this can create an issue where dividends are not paid to shares just exchanged/purchased during that time and I have to manually issue them. Thanks-

[Draino]

Period 3, Day 3 Report - February 19, 2014

Balance Post Divs: BTC 360.36385527

Total Units: 2272 (as of Noon)

NAV/U: BTC 0.15861085


Guys, again, please don't purchase EXCH in the five minutes before Noon - even if I'm able to issue the MINE/SELL shares, this can create an issue where dividends are not paid to shares just exchanged/purchased during that time and I have to manually issue them. Thanks-

Is the daily NAV/U what buy back would pay out, or is that the base from where the dividends would be deducted?

Also, if you could post some kind of big bold reminder on the share page itself, it may remind myself and others not to buy exchange during that window.  Sorry, by the way

[twentyseventy]

Period 3, Day 3 Report - February 19, 2014

Balance Post Divs: BTC 360.36385527

Total Units: 2272 (as of Noon)

NAV/U: BTC 0.15861085


Guys, again, please don't purchase EXCH in the five minutes before Noon - even if I'm able to issue the MINE/SELL shares, this can create an issue where dividends are not paid to shares just exchanged/purchased during that time and I have to manually issue them. Thanks-

Is the daily NAV/U what buy back would pay out, or is that the base from where the dividends would be deducted?

Also, if you could post some kind of big bold reminder on the share page itself, it may remind myself and others not to buy exchange during that window.  Sorry, by the way

It was you!   It's okay, it just throws me into rush mode trying to get the shares exchanged before the dividend script runs - in this case, I got the shares out to you but the script didn't see it in time for you to get the dividends, hence the push-buyback of one EXCH share for the dividends that should have been paid to you.

Thinking about it again, this means that there is a small window where people could possibly have MINE shares pushed to them, sell the shares, and then those shares would not be paid dividends because of the lag-time between the shareholder list updating and the dividend push, leading to me not knowing who is missing their dividends.

So, due to this, I will hold off on all exchanges between 1155AM and until dividends are paid - this is usually around 1202 or 1203PM Havelock time.

Anyone holding EXCH shares during this time (since I'll hold off on the exchange) will still received their dividends when I buy the EXCH shares back from them.

Regaring the message, I don't have much control over how the site is laid out or the ability to put custom text there, so I'll just whine about it here to whomoever will listen  

EDIT: It actually wasn't you, but the rest remains the same-

[Draino]

It was you!  It's okay, it just throws me into rush mode trying to get the shares exchanged before the dividend script runs - in this case, I got the shares out to you but the script didn't see it in time for you to get the dividends, hence the push-buyback of one EXCH share for the dividends that should have been paid to you.

Thinking about it again, this means that there is a small window where people could possibly have MINE shares pushed to them, sell the shares, and then those shares would not be paid dividends because of the lag-time between the shareholder list updating and the dividend push, leading to me not knowing who is missing their dividends.

So, due to this, I will hold off on all exchanges between 1155AM and until dividends are paid - this is usually around 1202 or 1203PM Havelock time.

Anyone holding EXCH shares during this time (since I'll hold off on the exchange) will still received their dividends when I buy the EXCH shares back from them.

Regaring the message, I don't have much control over how the site is laid out or the ability to put custom text there, so I'll just whine about it here to whomoever will listen 

Glad to see you're always looking for ways to improve!

So, how about the pair buy-back price? 

The original outline says the NAV/U gets a .5% per dividend deduction, but is that the NAV/U from it's list price or the NAV/U daily update?

Thanks

[twentyseventy]

Period 3, Day 3 Report - February 19, 2014

Balance Post Divs: BTC 360.36385527

Total Units: 2272 (as of Noon)

NAV/U: BTC 0.15861085


Guys, again, please don't purchase EXCH in the five minutes before Noon - even if I'm able to issue the MINE/SELL shares, this can create an issue where dividends are not paid to shares just exchanged/purchased during that time and I have to manually issue them. Thanks-

Is the daily NAV/U what buy back would pay out, or is that the base from where the dividends would be deducted?

Also, if you could post some kind of big bold reminder on the share page itself, it may remind myself and others not to buy exchange during that window.  Sorry, by the way

Sorry, forgot to answer your question - A buyback would pay out the NAV/U less .5% * the number of dividends paid for the period (three so far).

So, at Noon, that would be .15861084 - 1.5% = .15623167

If anyone has purchased more EXCH after the daily report, the buyback amount would be slightly higher due to the premium paid on newly purchased EXCH shares, which raises the NAV/U slightly. Anyone wanting the latest NAV/U can always post here to ask, but it will be at or higher than the daily report NAV/U.

[twentyseventy]

It was you!  It's okay, it just throws me into rush mode trying to get the shares exchanged before the dividend script runs - in this case, I got the shares out to you but the script didn't see it in time for you to get the dividends, hence the push-buyback of one EXCH share for the dividends that should have been paid to you.

Thinking about it again, this means that there is a small window where people could possibly have MINE shares pushed to them, sell the shares, and then those shares would not be paid dividends because of the lag-time between the shareholder list updating and the dividend push, leading to me not knowing who is missing their dividends.

So, due to this, I will hold off on all exchanges between 1155AM and until dividends are paid - this is usually around 1202 or 1203PM Havelock time.

Anyone holding EXCH shares during this time (since I'll hold off on the exchange) will still received their dividends when I buy the EXCH shares back from them.

Regaring the message, I don't have much control over how the site is laid out or the ability to put custom text there, so I'll just whine about it here to whomoever will listen 

Glad to see you're always looking for ways to improve!

So, how about the pair buy-back price? 

The original outline says the NAV/U gets a .5% per dividend deduction, but is that the NAV/U from it's list price or the NAV/U daily update?

Thanks

I believe that I answered your questions, but to be explicitly clear, it's the NAV/U at the time that the buy-back is requested, which would be equal to or higher than the Daily Update NAV/U depending on the number of EXCH sold that day after Noon.

[twentyseventy]

Period 3, Day 4 Report - February 20, 2014

Balance Post Divs: BTC 374.78404633

Total Units: 2373

NAV/U: BTC 0.15793680

[twentyseventy]

Period 3, Day 5 Report - February 21, 2014

Balance Post Divs: BTC 382.20661148

Total Units: 2431

NAV/U: BTC 0.15722197

[twentyseventy]

Period 3, Day 6 Report - February 22, 2014

Balance Post Divs: BTC 385.72221699

Total Units: 2465

NAV/U: BTC 0.15647960

[twentyseventy]

Hey everyone, I wanted to provide a few updates on BDD:

Regarding the suggestions that I proposed to Havelock on behalf of shareholders:

• Auto Exchange: I'm still waiting on a status update from Havelock regarding this capability. Last that I heard, they were close, so I'm still hoping to have that up and running before the end of the month, but the ball is in their court on this one. That being said, they've been very helpful so far and I'm very happy that they're looking to implement this for the fund.
• Regarding P/L for SELL/MINE in Account Overview: This one is a no-go. As I suspected, there are too many variables with determining absolute purchase price on the MINE and SELL shares. I know this is a bit of an annoyance to those of you that keep track of P/L via HL's purchase price / current price on the Account Overview page, but you'll just have to do the legwork on this one.
• Updating Account Overview's Digits to 8: This is something that they're looking into - I don't have any specific promise from them to make the change to 8 digits 'past the period' on the account overview page, but it does seem to be something that's on their radar.
• BDD Contingency Plan: As previously stated, in the event of my (extremely unlikely) disappearance or other unplanned absence (hospital stay, car accident, etc.) Havelock will take over the administration of the fund. They have all the details needed to do so and, since the capital are kept on-exchange, all BTC will be available to them.
  

Overall, I'm very happy with the funds' performance, with nearly 2,500 BDD Pairs distributed on the exchange. I believe that I've answered the community's questions and concerns in a thorough manner and reasonable timeframe as well.

That being said, I do want to broach a subject with shareholders regarding my compensation for running the fund. Currently, there is a 1% premium over NAV/U added onto EXCH shares - this 1% breaks down as follows:

• .4% to Havelock for the exchange fee (like all funds listed on Havelock)
• .6% to the Fund, providing holders of SELL an initial incentive to hold SELL shares. I believe that this somewhat makes up for the lack of possible investment revenue from the funds' capital on hand.

Currently, I'm compensated for running the fund and its communications to the community through a portion of the .4% Havelock exchange fee. This amount isn't disclosed publicly, but suffice to say that Havelock keeps the majority.

I'd like to propose a management fee of 2% on top of the EXCH sales price paid out each Difficulty period. I began this fund with the intention of offering minimal friction to initial purchasers of EXCH - the .4% exchange fee is, again, the price of being listed on an exchange, and the .6% fee is paid back to the fund (SELL in times of increase, MINE in times of decrease). I'd say that shareholders have implicitly approved of this fund their purchase of nearly 2,500 shares of EXCH.

Currently EXCH is NAV/U +1%, this proposal would raise it to NAV/U +3%. This would not affect current holders of MINE or SELL - MINE would still be paid out the exact same amount as promised in the contract. The same goes for holders of SELL - the fund would still receive the exact same .6% premium on sales of EXCH and the dividends from excess capital on hand after a Difficulty Increase.

This would only affect new purchasers of EXCH, notably arbitrageurs who profit off of the market price of MINE and SELL being too high. Those of you that traded in DMS may remember that Deprived charged a management fee of 3%, so this would still be lower than that. Other BTC-denominated ventures such as dooglus' Just-Dice and TAT's ASICMiner passthroughs charge higher fees than this proposed 2% as well (10% on Just-Dice profits; 5% of AM's dividends).

Barring a truly massive increase in network hashpower, it will likely be 6+ months before this Round of BDD is over and I would be able to freely change the contract, so it isn't as if I can just wait a month or so for the next Round to freely update the contract to my preference. Unlike BTCT, there is no formal voting mechanism in place for Havelock - I've considered putting it to a community vote, but that would require accepting votes by email and setting a date for counting votes (as shares are traded between holders, of course). That would also require the community to trust that I wouldn't rig the vote, or to select an independent party to review the votes.

So, I'd really like to hear the community's thoughts on this - I think that it is a fair proposal but I want those participating in BDD to have their say in the matter. I wouldn't make any changes until the next DI, at earliest, and only that soon with (near) unanimous support. I will also be putting out an update to shareholders via Havelock.

[junkonator]

Rannasha is in the right ballpark when it comes to the benefit of my managing the fund.

The beauty of a thing like DMS, BDD, eltopos ET.DIFF etc. is that you don't have to trust the issuer because it's obvious he or she'll make more money doing this honestly than scamming people. Guess what that means or at least should mean for you concerning disclosing your source of income, especially if there's doubt about your previous ventures. You have "some kind of deal", undisclosed, doesn't quite cut it...

That's why I asked

While it would be nice if you were able to do this for más o menos free it's not realistic.
Your proposed fee's is 2%plus this minor fraction from havelock? Fine with me.

[eltopo]

I'm ok with the 2% man fee. But as the fee affects arbitrageurs more than others, I'd like to see the auto-exchange first. That would be some kind of value for the additional fee.

[twentyseventy]

Rannasha is in the right ballpark when it comes to the benefit of my managing the fund.

The beauty of a thing like DMS, BDD, eltopos ET.DIFF etc. is that you don't have to trust the issuer because it's obvious he or she'll make more money doing this honestly than scamming people. Guess what that means or at least should mean for you concerning disclosing your source of income, especially if there's doubt about your previous ventures. You have "some kind of deal", undisclosed, doesn't quite cut it...

That's why I asked

While it would be nice if you were able to do this for más o menos free it's not realistic.
Your proposed fee's is 2%plus this minor fraction from havelock? Fine with me.

I did figure that was why it was being brought up the first time around - it's a fair question. As I said earlier, I started the fund wanting as little friction as possible to A) get it off of the ground, and B) give those new to the fund some time to get used it - buying into something you don't understand (as some people will do, not matter what I say) and holding the BDD pair only came at the cost of the .4% Havelock exchange fee. I'm thinking that, since we're now a month along, that this will be less of an issue.

I'm ok with the 2% man fee. But as the fee affects arbitrageurs more than others, I'd like to see the auto-exchange first. That would be some kind of value for the additional fee.

I think that's a fair way to look at it - I'll be following up with them again this week on that. I'm eager to have that done as well, as it will A) allow arbitrageurs to take more immediate advantage of trade opportunities, and B) eliminate the need for me to be online every day at Noon to ensure that all shares have been exchanged before the MINE dividend posts. You know all of this, but I'm just putting it out there for those that may not.

Once it's up, I'll still issue a daily report, but it won't necessarily have to be at Noon - the NAV/U doesn't change significantly enough between Noon and the afternoon/evening for it to make a huge difference for those relying on it.

Thanks to both of you for your responses-

[twentyseventy]

Period 3, Day 7 Report - February 23, 2014

Balance Post Divs: BTC 384.70675304

Total Units: 2471

NAV/U: BTC 0.1556886900


Please be sure to read the latest update and feel free to provide feedback here on the thread or directly to me at bitcoinderiv@gmail.com

[Auburn]

I support your proposal to add the 2% management fee.  It works out to only about $2/new EXCH share.  And the only ones affected are arbitrageurs who want to profit from various price discrepancies.  To them, it's just another cost of doing business.  All of us benefit from  the liquidity they provide.  You have committed to daily management of these funds for at least the next 6 months.  I want you to continue to administer for the long haul, and to feel that you are being adequately compensated for your time and trouble.  Your proposal is transparent and easy to understand by all.  Anyone who feels it's not worth it can just take their investment funds to another Havelock offering.  Go for it!