[Havelock] Bitcoin Difficulty Derivative (BDD)

[twentyseventy]

I just noticed that the NAV/U I calculate automatically doesn't match the reported value. Now I want to be sure: The NAV/U from the API-available data is:
B.EXCH = 0.02172270
NAV/U = 0.02172270 / 1.03 = .021090 (day zero)
DIV(MINE) = 0.00010545

-> NAV/U today = NAV/U - 3*DIV(MINE) = .021090 - .00031635 = .02077365

The difference to the reported NAV/U of 0.02078206 is caused by the new buys of B.EXCH. If there was a buyback, then NAV/U would go down further than the calculated-as-above NAV/U. Is this correct?

Actually, if there was a buy-back, the NAV/U would increase, as buybacks are done at 98% of the last published NAV/U.

The only time that NAV/U decreases is when SELL or MINE dividends are issued. Does that help?

[junkonator]

Actually, if there was a buy-back, the NAV/U would increase, as buybacks are done at 98% of the last published NAV/U.

The only time that NAV/U decreases is when SELL or MINE dividends are issued. Does that help?

If the calculation is implicitly correct otherwise then yes, thanks

[twentyseventy]

Actually, if there was a buy-back, the NAV/U would increase, as buybacks are done at 98% of the last published NAV/U.

The only time that NAV/U decreases is when SELL or MINE dividends are issued. Does that help?

If the calculation is implicitly correct otherwise then yes, thanks

Yes, the calculation is correct!

Period 18, Day 3 Report - August 23, 2014

Balance Post Divs: BTC 309.96318335

Total Units: 14991

NAV/U: BTC 0.02067661

Just curious, what are everyone's strategies when you're considering whether or not to buy B.EXCH vs. either MINE or SELL (apart from clearing a set of bids above NAV/U)?

jjdub7, are you asking when it's more beneficial to buy EXCH and sell the non-desired half of it, versus simply buying the half that you want (MINE or SELL)?

[jjdub7]

Just curious, what are everyone's strategies when you're considering whether or not to buy B.EXCH vs. either MINE or SELL (apart from clearing a set of bids above NAV/U)?

jjdub7, are you asking when it's more beneficial to buy EXCH and sell the non-desired half of it, versus simply buying the half that you want (MINE or SELL)?

Thread members' idea of it, yes.  Just off predictions of what the future prices will be.  Because of the way you have the EXCH price update with the difficulty, but the buy-back NAV/U price update daily (decreasing with MINE divs), it rules out arbitrage to a certain degree regarding the timing of whether to buy EXCH or not.  It's probably one factor that contributes to the variance of prices over the 2-week periods (i.e. SELL starting out low and then getting bought up at the end once people forecast what the next period will be).

[twentyseventy]

Period 18, Day 4 Report - August 24, 2014

Balance Post Divs: BTC 308.30175192

Total Units: 14987

NAV/U: BTC 0.02057127

[twentyseventy]

Period 18, Day 5 Report - August 25, 2014

Balance Post Divs: BTC 306.72137277

Total Units: 14987

NAV/U: BTC 0.02046582

[twentyseventy]

Period 18, Day 6 Report - August 26, 2014

Balance Post Divs: BTC 306.34029809

Total Units: 15044

NAV/U: BTC 0.02036295

[twentyseventy]

Period 18, Day 7 Report - August 27, 2014

Balance Post Divs: BTC 304.77494872

Total Units: 15045

NAV/U: BTC 0.02025755

[twentyseventy]

Period 18, Day 8 Report - August 28, 2014

Balance Post Divs: BTC 303.18845347

Total Units: 15045

NAV/U: BTC 0.02015210

[twentyseventy]

Period 18, Day 9 Report - August 29, 2014

Balance Post Divs: BTC 301.60195822

Total Units: 15045

NAV/U: BTC 0.02004665

Looking like diff will change Sunday night / Monday morning, so it's looking like SELL dividend will be issued Monday if the current increase trend keeps up.

[twentyseventy]

Period 18, Day 10 Report - August 30, 2014

Balance Post Divs: BTC 301.46725258

Total Units: 15114

NAV/U: BTC 0.01994622

[twentyseventy]

Period 18, Day 11 Report - August 31, 2014

Balance Post Divs: BTC 301.89336247

Total Units: 15210

NAV/U: BTC 0.01984834

[twentyseventy]

Period 18 End Report - September 1, 2014


Previous Units              14329
EXCH Sold                   885
Less Buybacks              4
New Total Units            15210

Previous Balance          302.19874817
Price per EXCH             0.02172270
Gross Sales of EXCH      19.22971782

Less Fees                    0.07689794
Less Dividends              18.94356525
Less Buybacks              0.08105228
Less Mgmt Fee              0.43358805
Net Balance                  301.89336247

End of Period NAV/U     0.01984834

New Difficulty                  27,428,630,902
New Daily Dividend         0.00009167
New Reserve per Unit        0.01833400

NAV/U Less New Reserve = 0.01984834 - 0.01833400 = 0.00151434

SELL Dividend                 0.00151434

Days of Dividends On Hand    ~216.5 (Before Sell Div)

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          0.01888402

[twentyseventy]

Period 19, Day 0 Report - September 1, 2014

Balance Post Divs: BTC 277.46595037

Total Units: 15210

NAV/U: BTC 0.01824233

Happy Labor Day to everyone in the US!

[twentyseventy]

Period 19, Day 1 Report - September 2, 2014

Balance Post Divs: BTC 279.00767109

Total Units: 15370

NAV/U: BTC 0.01815274

[twentyseventy]

Period 19, Day 2 Report - September 3, 2014

Balance Post Divs: BTC 277.59870319

Total Units: 15370

NAV/U: BTC 0.01806107

[Bonam]

I'm interested in these funds, however, I got burned pretty bad by Deprived.

Is there any mechanism in place to protect investors from a similar eventuality here, other than the reputation of twentyseventy?

[twentyseventy]

I'm interested in these funds, however, I got burned pretty bad by Deprived.

Is there any mechanism in place to protect investors from a similar eventuality here, other than the reputation of twentyseventy?

Unfortunately, there's really not. I'd rather be up front about it than skirt around the subject.

The main difference is that I don't hold the funds myself; they remain on Havelock's systems in my manager account. Deprived's DMS funds (the liquid funds) are just sitting there in the DMS BTC address; he owns the private keys and can sit on them forever (though I hope he doesn't).

I really can't do that - straight withdrawals from my manager account require approval directly from Havelock, so that kills that possibility. Theoretically I could perform a buy-back to my personal account (or a dummy account) for all of the funds and then perform a withdrawal from there.

With the amount of funds in BDD (currently ~297 BTC), however, I'd (likely) exhaust the hot wallet first, but the withdrawal vector still exists.

So, while you only had one person to trust with DMS (Deprived), you have to trust both me and Havelock for BDD - some may see this as a lower risk and others might possibly see it as a higher one.

I'd like to give a more confidence inspiring answer, but that's the truth. For what it's worth, I'd much rather earn BTC legitimately and build up a good reputation in the online (and someday IRL) community than make off with the BTC. However, as they say, actions speak louder than words.

[twentyseventy]

Period 19, Day 3 Report - September 4, 2014

Balance Post Divs: BTC 276.18973529

Total Units: 15370

NAV/U: BTC 0.01796940

[twentyseventy]

Period 19, Day 4 Report - September 5, 2014

Balance Post Divs: BTC 274.79911752

Total Units: 15371

NAV/U: BTC 0.01787776