[Havelock] Bitcoin Difficulty Derivative (BDD)

[pabad812]

I just now got paid the dividends on B.MINE

[1714644389]

1714644389

[twentyseventy]

Period 14, Day 9 Report - July 8, 2014

Balance Post Divs: BTC 333.88640415

Total Units: 11718

NAV/U: BTC 0.02849346

Dividend was paid and Auto-EXCH is back up, so I'll be reposting the EXCH ask in just a minute. The four shares purchased after noon were not exchanged before the dividends were paid, and the other four were actually purchased yesterday, so no adjustment needed.   

[twentyseventy]

Period 14, Day 10 Report - July 9, 2014

Balance Post Divs: BTC 332.76309008

Total Units: 11739

NAV/U: BTC 0.02834680

This a great time to bring up jjdub7's comment from this past week - there is a minimum increase required in the Difficulty for a SELL dividend to be paid. Right now, the Difficulty increase percentage for this period has been hovering around 5% - 6%, below the ~6.5% required for any SELL dividend to be paid.

Difficulty looks like it will change Saturday afternoon, so the report would be issued on Sunday.

For those of you that don't have one yet, my favorite site for tacking the Difficulty is https://bitcoinwisdom.com/bitcoin/difficulty

2070 - if I remember correctly, there was a minimum difficulty bump in order for SELL to be paid.  It was around 6.5% the last time the topic was covered.  Is this a constant minimum percentage inherent to your model or does it change as we move between rounds?  Thanks as always, man.

No problem - yes, this is a constant figure for any Period, not any specific one. It just has to do with the number of daily dividend payments made versus the number of days in the period.

Each day pays out 1 out of 200 Days worth of the dividend Reserve. 1 / 200 = .005 (or .5%).

13 Days of dividends = 13 * .5% = 6.5%. This seems to be the mathematical 'sweet spot' - just shy of 14 days, which is of course the 'Standard' Difficulty period time period (no increase/no decrease).

So, if you're paying out .5% per day, the difficulty needs to increase by at least .5% per day, otherwise the Reserve is decreasing faster than difficulty is increasing. Hope this helps-

[twentyseventy]

Period 14, Day 11 Report - July 10, 2014

Balance Post Divs: BTC 333.28269355

Total Units: 11815

NAV/U: BTC 0.02820843

[twentyseventy]

Period 14, Day 12 Report - July 11, 2014

Balance Post Divs: BTC 310.51526054

Total Units: 11051

NAV/U: BTC 0.02809838

[twentyseventy]

Period 14, Day 13 Report - July 12, 2014

Balance Post Divs: BTC 309.19238648

Total Units: 11062

NAV/U: BTC 0.02795085

Right now, Difficulty is set to change in about six hours, ~7PM ET. The change is estimated to be 3% - 4%, below the ~6.5% required to generate excess capital to be paid out to SELL.

So, I will issue the report tomorrow at Noon, like normal, and the MINE dividend will change, but SELL will not be issued a dividend (barring some major increase in the next six hours).

Just wanted to make this clear so that there's no confusion tomorrow.

[dyask]

Period 14, Day 13 Report - July 12, 2014

Balance Post Divs: BTC 309.19238648

Total Units: 11062

NAV/U: BTC 0.02795085

Right now, Difficulty is set to change in about six hours, ~7PM ET. The change is estimated to be 3% - 4%, below the ~6.5% required to generate excess capital to be paid out to SELL.

So, I will issue the report tomorrow at Noon, like normal, and the MINE dividend will change, but SELL will not be issued a dividend (barring some major increase in the next six hours).

Just wanted to make this clear so that there's no confusion tomorrow.

B.Sell is way down pushing the value of B.Mine way up.   Seems like the market clearly knows there isn't any B.Sell dividend this time.   

[twentyseventy]

Period 14 End Report - July 13, 2014


Previous Units              9951
EXCH Sold                   2475
Less Buybacks              766
New Total Units            11660

Previous Balance          297.55487733
Price per EXCH             0.03079906
Gross Sales of EXCH      76.22767350

Less Fees                    0.30491071
Less Dividends              23.64485699
Less Buybacks              21.17550316
Less Mgmt Fee              1.47820537
Net Balance                  327.17907460

End of Period NAV/U     0.02805995

New Difficulty                  17,336,316,979
New Daily Dividend         0.00014504
New Reserve per Unit        0.02900800

NAV/U Less New Reserve = 0.02805995 - 0.02900800 = -0.00094805

SELL Dividend                 None (Because NAV/U is less than the new Reserve (200 Days of Dividends))

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          0.02987824 0.02890175

[twentyseventy]

Period 15, Day 0 Report - July 13, 2014

Balance Post Divs: BTC 325.48790820

Total Units: 11660

NAV/U: BTC 0.02791491

[baloo_kiev]

What's wrong with B.EXCH price? It must be NAV/U * 1,03 = 0,02890175

[twentyseventy]

What's wrong with B.EXCH price? It must be NAV/U * 1,03 = 0,02890175

You are correct! I apologize for the oversight; my sheet was calculating EXCH price as The Reserve * 1.03 which, up until this period, would have been the same as the new NAV/U * 1.03.

However, with there being no SELL Dividend this time (due to the deficient Reserve), these amounts are now divergent.

There have been 256 units sold today at this higher price. I will go through tonight and refund the difference to the four users who purchased EXCH units at this price.

Thanks for pointing that out!

[dyask]

Dear "twentyseventy",
Thank you for this funny funds - B.EXCH, B.MINE, B.SELL It's better than having mining rigs
But why "Last Dividend" for B.SELL is indicating now ฿0.0056 and not "None"
and "Annual Yield" 1147.64% and is not <nothing> ?

There wasn't a 7/13 dividend for B.SELL!   It was none, it just isn't listed probably because there is nothing to list. 

I'm expecting we will have a dividend this next time around, but probably not as huge as the 0.0056 one.   

[twentyseventy]

Dear "twentyseventy",
Thank you for this funny funds - B.EXCH, B.MINE, B.SELL It's better than having mining rigs
But why "Last Dividend" for B.SELL is indicating now ฿0.0056 and not "None"
and "Annual Yield" 1147.64% and is not <nothing> ?

There wasn't a 7/13 dividend for B.SELL!   It was none, it just isn't listed probably because there is nothing to list. 

I'm expecting we will have a dividend this next time around, but probably not as huge as the 0.0056 one.   

Correct, the system just reported the last dividend, so that's still accurate. The Annual Yield, which I've asked Havelock to consider taking down, is still accurate for the math that HL uses- however, it's very misleading in this instance because a consistently falling price of MINE/SELL will always make the AY look sky-high, when it really won't be.

[twentyseventy]

Period 15, Day 1 Report - July 14, 2014

Balance Post Divs: BTC 343.11079646

Total Units: 12348

NAV/U: BTC 0.02778675

[twentyseventy]

Correct, the system just reported the last dividend, so that's still accurate. The Annual Yield, which I've asked Havelock to consider taking down, is still accurate for the math that HL uses- however, it's very misleading in this instance because a consistently falling price of MINE/SELL will always make the AY look sky-high, when it really won't be.

There is misleading information for B.MINE and B.SELL in the dashboard "All Funds".

The "Last Dividend" column must indicate last period dividend, so for B.SELL must be "None" and  "Annual Yield" must be empty (unknown) and not 475.35% !!!

There is another error now, for B.MINE You indicate
86.33% for Price = ฿0.0168 and daily dividend 0.00014504 !!!
It is more than 315% !

How are calculated this 475.35% for B.SELL and 86.33% B.MINE ?!?

Do realize that these are all Havelock conventions, so your issues are with them, not me. Also, you assume that "The "Last Dividend" column must indicate last period dividend". This, however, is not necessarily true.

Havelock literally tracks the 'Last Dividend' and their measure of this is true. In addition, by HL's measure, "Annual Yield" must be empty (unknown)" is correct- but, again, this is their measure, not mine.

[ddalex]

Correct, the system just reported the last dividend, so that's still accurate. The Annual Yield, which I've asked Havelock to consider taking down, is still accurate for the math that HL uses- however, it's very misleading in this instance because a consistently falling price of MINE/SELL will always make the AY look sky-high, when it really won't be.

As I understand, there is an error for B.MINE  in the dashboard "All Funds".
Column "Annual Yield" for B.MINE shows 86.33% for Price = ฿0.0168 and daily dividend 0.00014504 !!!

IMHO, "Annual Yield" for B.MINE is more than 300% and not 86.33%!
IMHO, "Annual Yield" for B.SELL was 0% for last and may be again 0% for the current period.

Am I wrong ? 0.00014504/0.0168*100*365.25 = 315.320325

P.S. Difficulty increment considered 0%

[Phildo]

You have different definitions for those terms than havelock does, and that's your problem not theirs.

Havelock was not designed for these types of things, it was designed for regular stocks, and it is designed for those. The last dividend/next dividend/annual yield don't really apply to b.mine and b.sell because the point of those wasn't to buy something at the ipo and own part of a company, they are something else that is completely different. B.Sell having no dividend last period does not change the fact that it had a yield previously. mine having a bigger payout than previously last period doesn't change how it performed in the past, and none of those facts have any real bearing on what the hell is going to happen next time.

[ddalex]

You have different definitions for those terms than havelock does, and that's your problem not theirs.

Havelock was not designed for these types of things, it was designed for regular stocks, and it is designed for those. The last dividend/next dividend/annual yield don't really apply to b.mine and b.sell because the point of those wasn't to buy something at the ipo and own part of a company, they are something else that is completely different. B.Sell having no dividend last period does not change the fact that it had a yield previously. mine having a bigger payout than previously last period doesn't change how it performed in the past, and none of those facts have any real bearing on what the hell is going to happen next time.

I know and understand all that since January 25, 2014, and finance since 1982.
But I try to explain You something else. Basta. I stop here.

[twentyseventy]

You have different definitions for those terms than havelock does, and that's your problem not theirs.

Havelock was not designed for these types of things, it was designed for regular stocks, and it is designed for those. The last dividend/next dividend/annual yield don't really apply to b.mine and b.sell because the point of those wasn't to buy something at the ipo and own part of a company, they are something else that is completely different. B.Sell having no dividend last period does not change the fact that it had a yield previously. mine having a bigger payout than previously last period doesn't change how it performed in the past, and none of those facts have any real bearing on what the hell is going to happen next time.

I know and understand all that since January 25, 2014, and finance since 1982.
But I try to explain You something else. Basta. I stop here.

Korbman did a great analysis of how HL calculates this Yield but again, yes, these calculations are misleading when applied to B.SELL and B.MINE and, also, I have no control over them.

How is the Annual Yield on Havelock for these funds calculated?

That's a great question, I'm not sure actually. [...]

If I remember correctly, it's something like this:
A = Currently price per unit
B = Last Dividend per unit
C = How often after dividends paid. 12 = once per month, 365 = once per day, 52 = once per week, etc.

[(B * C) / A] * 100 = APY in %

For example, with B.MINE:
[(0.00041088 * 365) / 0.032] * 100 = 468.66%

With AM1:
[(0.000065 * 52) / 0.60] * 100 = 0.5633%

In reality, it sort of breaks based on how Havelock determines the timeframe. For me, paying every 2 weeks means 26 periods...an APY of about 43.3% at current prices...but for whatever reason Havelock calculates it as if it were only 12 periods per year. 

And for the Difficulty Derivative, it's even more skewed since the overall timeframe of the asset doesn't reach one year anyway.

[ddalex]

You have different definitions for those terms than havelock does, and that's your problem not theirs.

Havelock was not designed for these types of things, it was designed for regular stocks, and it is designed for those. The last dividend/next dividend/annual yield don't really apply to b.mine and b.sell because the point of those wasn't to buy something at the ipo and own part of a company, they are something else that is completely different. B.Sell having no dividend last period does not change the fact that it had a yield previously. mine having a bigger payout than previously last period doesn't change how it performed in the past, and none of those facts have any real bearing on what the hell is going to happen next time.

I know and understand all that since January 25, 2014, and finance since 1982.
But I try to explain You something else. Basta. I stop here.

Korbman did a great analysis of how HL calculates this Yield but again, yes, these calculations are misleading when applied to B.SELL and B.MINE and, also, I have no control over them.

How is the Annual Yield on Havelock for these funds calculated?

That's a great question, I'm not sure actually. [...]

If I remember correctly, it's something like this:
A = Currently price per unit
B = Last Dividend per unit
C = How often after dividends paid. 12 = once per month, 365 = once per day, 52 = once per week, etc.

[(B * C) / A] * 100 = APY in %

For example, with B.MINE:
[(0.00041088 * 365) / 0.032] * 100 = 468.66%

With AM1:
[(0.000065 * 52) / 0.60] * 100 = 0.5633%

In reality, it sort of breaks based on how Havelock determines the timeframe. For me, paying every 2 weeks means 26 periods...an APY of about 43.3% at current prices...but for whatever reason Havelock calculates it as if it were only 12 periods per year.  

And for the Difficulty Derivative, it's even more skewed since the overall timeframe of the asset doesn't reach one year anyway.

Yes, I tried to show you exactly that !
[(B * C) / A] * 100 = APY in % is OK, for the short period between Dificulty changes.
So you can compare easily with other funds, knowing this is an approximation, for the short time frame (12 days).
And APY was computed using this formula until Jul 12 2014.
But WHY now APY for B.MINE is computed with another formula ?!?