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Author Topic: (FEEDBACK WANTED) 100% Insured PPT bond (GLBSE)  (Read 4289 times)
El Cabron
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August 02, 2012, 02:17:42 AM
 #1


The bond would have a face value of 1 BTC.

Assuming Pirate has not defaulted I will buy back the bonds at 1 BTC.

Assuming Pirate has defaulted I will buy back the bonds at 1 BTC.

The fee would be 1.5% interest per week of the face so .055 BTC a week would be paid out.

75% of the insurance money would be either at a public BTC address or in escrow at a public bitcoin address.

The point of this is to know that the "insurance money" is not being invested in pirate or being loaned out to people who lend to pirate or in GLBSE assets that might be helped out by pirate.

If I have 750 BTC in the insurance address then I would only be able to sell 1000 bonds.

If the default with pirate happens 100% will be paid back. Clearly you will have to trust I can come up with the other 25% but at least you know most of the BTC exists in a very very safe form.

I would sell this around 1.5 to 1.6 BTC each. That is less than what YARR is going for. The difference will be that you can see 75% of the insurance money in the block chain and know it will get distributed.


All idea welcome.

Thanks.

Sorry El Cabron, you are banned from posting or sending personal messages on this forum.
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JoelKatz
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August 02, 2012, 02:38:11 AM
 #2

Everyone loves 1,000% interest.

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August 02, 2012, 03:13:13 AM
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I'm not quite sure how you arrive at 1000%.  Should be higher if you count a full 5.5% at "face value," or "only" about 600% if you count it at the sell price (that seems like the more accurate figure to me).

So it's really more like 60% insured--you take a haircut if default is soon (as I think it may be). But it seems like a relatively attractive product. I don't know why anyone would get YARR if this was available.
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August 02, 2012, 03:24:39 AM
 #4

I would get a few of these.

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August 02, 2012, 06:37:30 AM
 #5

I'm not so sure I agree with the pricing plan.

YARR pays 1% per day, or 7.214% compounded per week.
This proposed asset would pay 5.5% per week, or a bit over 30% less than YARR.

I suspect both asset issuers are trusted by most of the general population, or at least trusted enough not to hinder purchase of these bonds. Given that, I think the trust difference, if one exists, would have a negligible effect.

YARR's current market price is around ~1.7 BTC. Given that one share of YARR pays the equivalent of 1.31164 shares of this bond, one would conclude that this bond should be priced at around ~1.3 BTC, not ~1.5 to 1.6 BTC.

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August 02, 2012, 07:01:46 AM
 #6

The advantage of Goat's bond is that insurance is much more reliable, as most of the coins are visible and stored offline.  Goat also has a more established reputation.

All of usagi's bonds (YARR, CPA and NYAN) would suffer when/if pirate defaults.  There is no guarantee he would be able to pay back in full.

1.6 is probably too high though.  YARR IPO'ed at 1.2 IIRC which was probably too low.

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August 02, 2012, 07:08:47 AM
 #7

Would be very interested in some of these

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August 02, 2012, 07:28:41 AM
 #8

I'm not quite sure how you arrive at 1000%.  Should be higher if you count a full 5.5% at "face value," or "only" about 600% if you count it at the sell price (that seems like the more accurate figure to me).
You get .055BTC per bond. At 1.6BTC per bond, that .055BTC buys you .034375 bonds. So if you start a week with one bond in value, you end a week with the value of 1.034375 bonds. There are 52 weeks in a year, and 1.034375^52 = 5.8. So in a year, you go from 1 units to 5.8 units, an increase of 4.8 units. That means the interest rate is 4,800%480%.

Quote
So it's really more like 60% insured--you take a haircut if default is soon (as I think it may be). But it seems like a relatively attractive product. I don't know why anyone would get YARR if this was available.
I agree. You're betting that there won't be a default (or cessation of operations, or huge interest rate reduction) before the interest you've accumulated equals the premium that you paid. Depending on how you calculate it, that's between 12 and 20 weeks.

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August 02, 2012, 09:40:56 AM
 #9

What advantage has this offer over DeadTerra's GIPPT (https://glbse.com/asset/view/GIPPT)?

 - Both are 100% insured
 - He pays 2.5%, you pay 1.5% a week,
 - His IPO price is 1 BTC, yours is 1.5 BTC
 - He puts 100% in escrow, you put 75%

I can't seem to find any reason to go for this proposal instead.

wrong- he pays 0.055 a week....

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August 02, 2012, 10:40:26 AM
 #10

wrong- he pays 0.055 a week....

My mistake, so it's 0.025 vs 0.055 BTC. And because you can buy about 1.5 Terra bonds for the price of 1 Goat bond, the actual comparison should be 0.0375 vs 0.055 BTC. Seems like Goat is indeed offering a better deal.


Yes, but Goat insures only 1 BTC, at least 0.5 BTC is not covered.

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August 02, 2012, 10:50:34 AM
 #11

Goat, selling at 1.6 and buying back at 1 would also be a great option if you know that pirate will default in the next few days.
How do you address this?
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August 02, 2012, 11:56:44 AM
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Would you make an offer to convert TYGRR.BOND-P to these new bonds.
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August 02, 2012, 11:58:56 AM
 #13

I'm not so sure I agree with the pricing plan.

YARR pays 1% per day, or 7.214% compounded per week.
This proposed asset would pay 5.5% per week, or a bit over 30% less than YARR.

I suspect both asset issuers are trusted by most of the general population, or at least trusted enough not to hinder purchase of these bonds. Given that, I think the trust difference, if one exists, would have a negligible effect.

YARR's current market price is around ~1.7 BTC. Given that one share of YARR pays the equivalent of 1.31164 shares of this bond, one would conclude that this bond should be priced at around ~1.3 BTC, not ~1.5 to 1.6 BTC.

This is wrong, YARR doesn't pay on Sunday.  Its 6.15% (1.01^6) compounded per week.
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August 02, 2012, 12:02:11 PM
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I'm not quite sure how you arrive at 1000%.  Should be higher if you count a full 5.5% at "face value," or "only" about 600% if you count it at the sell price (that seems like the more accurate figure to me).
You get .055BTC per bond. At 1.6BTC per bond, that .055BTC buys you .034375 bonds. So if you start a week with one bond in value, you end a week with the value of 1.034375 bonds. There are 52 weeks in a year, and 1.034375^52 = 5.8. So in a year, you go from 1 units to 5.8 units, an increase of 4.8 units. That means the interest rate is 4,800%.



1 to 5.8 is a 480% increase, not a 4800% increase.
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August 02, 2012, 12:05:09 PM
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Conversion from TYGRR-P would be of high interest! Do You consider it?
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August 02, 2012, 12:28:05 PM
 #16

Goat, selling at 1.6 and buying back at 1 would also be a great option if you know that pirate will default in the next few days.
How do you address this?

On the flip side, if you're eternally optimistic and think that Pirate will pay back all his loans in 2 weeks, it would also be a good sell.
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August 02, 2012, 12:54:26 PM
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Please correct me if am wrong: @ 1.5 per bond and 1 BTC insurance, this is 66.6 % insurance. If I decide to invest in an uninsured PPT that pays 7% weekly instead of 5.5% "insured" and save 0.5 BTC per bond on the side. I would then self insure my bonds by 33.3%. I just can not see any huge deference between self insuring "33.3%" vs your insurance of "66.6%". Cause the 33.3% self insurance would grow weekly by adding the 1.5% to it "the 1.5% that will be lost in your insured PPT".

Bottom line, I don't see any great value in any of the current insured PPT including this one you are about to issue. Personally I found that the best thing about YARR is the daily dividends. However I've sold all my YARR shares and decided to switch to self insuring my PPT bonds "I guess that can easily be done by anyone". I would be interested in insured PPT that can introduce a magical formula, one that can not easily achieved through self insurance. For example 90% insurance: 1 Bond = 1 BTC 90% insured. But that is almost imposible to promis starting from day one. The only solution that I think would solve such problem is to engage mining hardware/hashing power in the insurance. For example 1 PPT bond = 1 BTC and insured by 100 MH/s of ASIC.
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August 02, 2012, 02:13:51 PM
 #18

You're betting that there won't be a default before the interest you've accumulated equals the premium that you paid. Depending on how you calculate it, that's between 12 and 20 weeks.
...and goat is betting that there will be a pirate default before the accumulated interest equals the premium that you paid. Caveat emptor.

edit: OK, I take that back. It's not quite that simple. Goat can structure this to make a profit with or without a pirate default.
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August 02, 2012, 02:21:50 PM
 #19

You're betting that there won't be a default before the interest you've accumulated equals the premium that you paid. Depending on how you calculate it, that's between 12 and 20 weeks.
...and goat is betting that there will be a pirate default before the accumulated interest equals the premium that you paid. Caveat emptor.

edit: OK, I take that back. It's not quite that simple. Goat can structure this to make a profit with or without a pirate default.

Was just about to correct ya then saw your edit xD.

Looks like there would be some demand... I personally will be sticking with the GIPPT because well... 100% insurance. Although being able to view the escrow coins is attractive.

EDIT: mixed feelings about this as well, does this show confidence in pirate or a lack of?
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August 02, 2012, 04:15:33 PM
 #20

When can I invest?

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