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Author Topic: [soon on GLBSE?] brendio to pirate pass through - up to 6.79%  (Read 1357 times)
Sukrim
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May 21, 2012, 01:04:56 PM
 #1

As brendio was quite interested in raising his pirate account to higher tiers (https://bitcointalk.org/index.php?topic=82572.msg911809#msg911809) I thought of the following concept:

Pirate pass through shares traded on GLBSE, pirate account by brendio, management of GLBSE operations by me. I'll take a 3% cut on the dividends for trade fees (e.g. filling buy offers costs 0.5%) + time invested, so in a 7% account scenario it would pay out 7 * 0.97 = 6.79% per week.
Brendio however said, he would only pay the 7% for the first 1700 BTC invested and 6.75% for BTC deposited after that, so we'll have to see about that. Mathematically, it can be simply treated as a slight decrease in interest on pirate side, but even in the worst case (millions and milions of BTC at 6.75 so the 1700 with 7% don't really matter any more) it still pays out better than any other 1-week pirate pass through bond on GLBSE: 6.75 * 0.97 = 6.5475%. The average case should be something in between.

Intended share price:
1 share = 1 Bitcent (0.01 BTC) to allow people with a few mining bonds to reinvest their earnings. Also I like to have more liquidity.

Outline of terms (to be feedbacked) in "prose":

Every Sunday there will be the dividends for the last week (the ones pirateat40 pays on monday). To clarify, I pay the dividends from the 1st-7th on the 14th while brendio receives them on the 8th, so he has a few days buffer to transfer them to GLBSE.
Every share receives the interest as dividend via GLBSE (minus GLBSE fees, if any get introduced there). To receive the dividend, you need to hold the share at the time the dividend is paid, there's no way currently to track if somone held a share for say 6 out of 7 days.
After the dividend payment on Sunday, all outstanding bids of 0.01 BTC or higher receive new shares. The money from this sale then is transmitted to brendio and put by him into his savings account asap.
I'd love to sell shares more often or just put up a huge bidwall, but there might be problems with dilution and it would be too hard to sell shares again if you don't want them any more.
Since pirateat40 seems to calculate interest by the minute(!) there might be some slight inconsistencies (especially once interest on brendio's account increases or decreases) - so the final dividend will simply be:
( Brendio's total interest of the week * fraction of pass-through money in his account (e.g. 3/4) ) * 0.97 (the 3% cut)

If pirateat40 lowers or increases the interest on brendio's account, everything stays the same, just the interest gets increased or decreased on shares too (and my 3% of the interest is worth more as well). To hit the 7% weekly, this asset needs to sell 170000 shares worth 1 bitcent each (or 1700 BTC worth of shares), until then rates are as displayed in pirate's thread. After this amount is reached, there will either be a motion or a discussion here how to continue - or maybe brendio even decides to continue paying 7% to the fund as well, since he hopefully won't have a lot of hassle with all of this anyways.

As always with pirate investments, one of the first questions coming up would be: "How do I get out?!". On one hand, you can of course fill the ask spots on Sunday yourself, when I try to raise new capital, on the other hand you can also request a payout at a 5% fee. You'll have to transfer the shares back to me for this and won't receive dividends for that last week (obviously). I'll then ask brendio to withdraw the proper amount of BTC from pirate and transfer these asap to the GLBSE account where the share transfer originated from. You'll then receive 0.0095 per share sold this way, the 0.0005 BTC fee will most likely go to brendio and me (+ GLBSE for fees) - I haven't talked to him about that yet though so this is subject to change.

Another question that might be important:
Why should I trust you and will you verify with GLBSE?
You should trust nobody on the internet and no, I won't verify with GLBSE for the simple reason that I don't want my personal data floating somewhere on a server/HDD in the UK or US. If you really think I'll take the money and run, well then simply don't invest here. I don't know brendio in person either, neither pirateat40. All I'm offering is a little bit of convenience and I also tried to keep share prices low enough that you don't have to put up hundreds of BTC just to see if I would steal them from you or not. Most of the time the money anyways will lie at pirateat40's accounts, so you should rather ask yourself if you trust him and his operation.

I plan however to publicly release the following information that can be verified with the blockchain (the blockchain never lies!!!11):
* An address to the GLBSE account of this asset to be used by brendio for dividend payments
* An address to the GLBSE account of this asset to be used by brendio for withdrawn money (e.g. someone want to withdraw 100 BTC and sends 10000 shares - then brendio would send the 100 BTC to that address after getting the coins from pirateat40 for everyone to see. This also means that you can withdraw quite in silence and anonymously)
* TX hashes of:
  # The sunday payments to brendio to be deposited to pirateat40 (or, if I get a direct deposit address to pirate, then the TX hashes to this account)
  # The TX hashes of dividend payments from brendio to the dividend GLBSE address (a bit redundant, I know)
  # The TX hashes of withdrawal payments from brendio to the withdrawal GLBSE address (this can as well already be seen on blockexplorer by knowing the address)

What if pirate defaults and brendio won't get paid or only gets a fraction of the deposit back? - Well, in this case the shares will simply be bought back for either 0 BTC or the fraction that brendio got per piece and the asset is dead.

All in all I want to offer a service that I would like to see: Low fees, long time forum members, always a chance to cash out, high return rates, clear terms and low share price for liquidity.

The "real" terms will be worded a bit more strictly than what's written above, but contain in essence the same things.

Do you have any feedback?
Would you buy such shares?
Is there something that I overlooked (unfair advantage, too much work for me or brendio in case of X or too high a risk for doing Y...)?
Please comment (in a civil way) below and let me hear your ideas.

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brendio
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May 21, 2012, 03:16:45 PM
 #2

As brendio was quite interested in raising his pirate account to higher tiers (https://bitcointalk.org/index.php?topic=82572.msg911809#msg911809) I thought of the following concept:

Pirate pass through shares traded on GLBSE, pirate account by brendio, management of GLBSE operations by me. I'll take a 3% cut on the dividends for trade fees (e.g. filling buy offers costs 0.5%) + time invested, so in a 7% account scenario it would pay out 7 * 0.97 = 6.79% per week.
Brendio however said, he would only pay the 7% for the first 1700 BTC invested and 6.75% for BTC deposited after that, so we'll have to see about that. Mathematically, it can be simply treated as a slight decrease in interest on pirate side, but even in the worst case (millions and milions of BTC at 6.75 so the 1700 with 7% don't really matter any more) it still pays out better than any other 1-week pirate pass through bond on GLBSE: 6.75 * 0.97 = 6.5475%. The average case should be something in between.

Intended share price:
1 share = 1 Bitcent (0.01 BTC) to allow people with a few mining bonds to reinvest their earnings. Also I like to have more liquidity.

Outline of terms (to be feedbacked) in "prose":

Every Sunday there will be the dividends for the last week (the ones pirateat40 pays on monday). To clarify, I pay the dividends from the 1st-7th on the 14th while brendio receives them on the 8th, so he has a few days buffer to transfer them to GLBSE.
Every share receives the interest as dividend via GLBSE (minus GLBSE fees, if any get introduced there). To receive the dividend, you need to hold the share at the time the dividend is paid, there's no way currently to track if somone held a share for say 6 out of 7 days.
After the dividend payment on Sunday, all outstanding bids of 0.01 BTC or higher receive new shares. The money from this sale then is transmitted to brendio and put by him into his savings account asap.
I'd love to sell shares more often or just put up a huge bidwall, but there might be problems with dilution and it would be too hard to sell shares again if you don't want them any more.
Since pirateat40 seems to calculate interest by the minute(!) there might be some slight inconsistencies (especially once interest on brendio's account increases or decreases) - so the final dividend will simply be:
( Brendio's total interest of the week * fraction of pass-through money in his account (e.g. 3/4) ) * 0.97 (the 3% cut)

If pirateat40 lowers or increases the interest on brendio's account, everything stays the same, just the interest gets increased or decreased on shares too (and my 3% of the interest is worth more as well). To hit the 7% weekly, this asset needs to sell 170000 shares worth 1 bitcent each (or 1700 BTC worth of shares), until then rates are as displayed in pirate's thread. After this amount is reached, there will either be a motion or a discussion here how to continue - or maybe brendio even decides to continue paying 7% to the fund as well, since he hopefully won't have a lot of hassle with all of this anyways.

As always with pirate investments, one of the first questions coming up would be: "How do I get out?!". On one hand, you can of course fill the ask spots on Sunday yourself, when I try to raise new capital, on the other hand you can also request a payout at a 5% fee. You'll have to transfer the shares back to me for this and won't receive dividends for that last week (obviously). I'll then ask brendio to withdraw the proper amount of BTC from pirate and transfer these asap to the GLBSE account where the share transfer originated from. You'll then receive 0.0095 per share sold this way, the 0.0005 BTC fee will most likely go to brendio and me (+ GLBSE for fees) - I haven't talked to him about that yet though so this is subject to change.

Another question that might be important:
Why should I trust you and will you verify with GLBSE?
You should trust nobody on the internet and no, I won't verify with GLBSE for the simple reason that I don't want my personal data floating somewhere on a server/HDD in the UK or US. If you really think I'll take the money and run, well then simply don't invest here. I don't know brendio in person either, neither pirateat40. All I'm offering is a little bit of convenience and I also tried to keep share prices low enough that you don't have to put up hundreds of BTC just to see if I would steal them from you or not. Most of the time the money anyways will lie at pirateat40's accounts, so you should rather ask yourself if you trust him and his operation.

I plan however to publicly release the following information that can be verified with the blockchain (the blockchain never lies!!!11):
* An address to the GLBSE account of this asset to be used by brendio for dividend payments
* An address to the GLBSE account of this asset to be used by brendio for withdrawn money (e.g. someone want to withdraw 100 BTC and sends 10000 shares - then brendio would send the 100 BTC to that address after getting the coins from pirateat40 for everyone to see. This also means that you can withdraw quite in silence and anonymously)
* TX hashes of:
  # The sunday payments to brendio to be deposited to pirateat40 (or, if I get a direct deposit address to pirate, then the TX hashes to this account)
  # The TX hashes of dividend payments from brendio to the dividend GLBSE address (a bit redundant, I know)
  # The TX hashes of withdrawal payments from brendio to the withdrawal GLBSE address (this can as well already be seen on blockexplorer by knowing the address)

What if pirate defaults and brendio won't get paid or only gets a fraction of the deposit back? - Well, in this case the shares will simply be bought back for either 0 BTC or the fraction that brendio got per piece and the asset is dead.

All in all I want to offer a service that I would like to see: Low fees, long time forum members, always a chance to cash out, high return rates, clear terms and low share price for liquidity.

The "real" terms will be worded a bit more strictly than what's written above, but contain in essence the same things.

Do you have any feedback?
Would you buy such shares?
Is there something that I overlooked (unfair advantage, too much work for me or brendio in case of X or too high a risk for doing Y...)?
Please comment (in a civil way) below and let me hear your ideas.

My thoughts:

1. A reply to my PM alerting me to this thread would have been nice so that we could nut out the details before going public, but here I am, so I guess we nut it out here.

2. Upon reading this thread, I realised a small mistake in my post. I said I needed 300 BTC to reach pirate's next interest tier, but 1700 BTC to reach the full 7 %. I currently have a bit over 200 BTC deposited and was thinking of adding another 100 BTC. So we'll keep it at 1700 BTC to reach the full amount and 200 BTC to the next level.

3. The offer does not take into account if others decide to invest with me directly prior to the GLBSE offer.

4. I would like to preserve my minimum deposit amount of 20 BTC. I also don't want to be handling lots of little withdrawals either, so I would want either a minimum withdrawal amount or a minimum fee for me processing withdrawals. Maybe 1 BTC minimum.

Sukrim
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May 21, 2012, 04:30:48 PM
 #3

1) In my opinion public is always better - also your PM was so short that I thought all you wanted is to alert me that you read my post... sorry for that! I expected you to roam these forums frequently enough anyways.

2) Not too much of a problem, in the end the real return rate for investors will anyways be between 6.79% and 6.55%, depending on how many people actually want to trust you and me. It could also be that they don't even want this and I end up raising only 10 BTC or so.

3) Also in that case the worst thing that can happen is that you raise 1700 prior to IPO and the shares "only" return 6.55%

4) Small withdrawals should anyways not happen, as they can be bought up by ask offers (that's also the reason for the 5% withdrawal fee, so it makes more sense to sell at 0.0099 BTC instead of requesting a payout). A minimum amount of 20 BTC or so for manual payouts seems reasonable to me.

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brendio
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May 22, 2012, 02:39:00 AM
 #4

After the dividend payment on Sunday, all outstanding bids of 0.01 BTC or higher receive new shares. The money from this sale then is transmitted to brendio and put by him into his savings account asap.
I'd love to sell shares more often or just put up a huge bidwall, but there might be problems with dilution and it would be too hard to sell shares again if you don't want them any more.
Since pirateat40 seems to calculate interest by the minute(!) there might be some slight inconsistencies (especially once interest on brendio's account increases or decreases) - so the final dividend will simply be:
( Brendio's total interest of the week * fraction of pass-through money in his account (e.g. 3/4) ) * 0.97 (the 3% cut)

I think there could be an issue with the lost interest on the delay between when new funds are issued and when they get into Pirate's program. If you just average this out, you penalise long term holders and reward new investors.

Also, I'd like to increase the 20 BTC minimum deposit once I have full capacity. (https://bitcointalk.org/index.php?topic=82772.msg913578#msg913578)

One solution is to pay a day's less interest on bonds newly issued after a dividend payment by selling them for 1 % higher than the face value. I get to keep any difference in interest if I get the bitcoins to pirate faster. If there are not enough bids to cover the minimum deposit, no new bonds are issued.

Another solution is to get some market makers. They would buy and sell the bonds for a certain spread. They can redeem bonds by transferring a minimum number of bonds to the issuer for redemption and I would then request a withdrawal with pirate. They can also  deposit funds with me and receive bonds in return, which they can sell on market if there are sufficient buyers.

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