[BKS PASSED] Motion to stop sale of BKS

masterOfDisaster · August 9, 2015, 11:37am

Lacking a proper subforum I decided to place this motion here.

Introduction

The discussion might as well be held at the bitcointalk.org thread, but developing it into a status which can be presented at bitcointalk.org might be preferred.
The reasoning for that includes:

participants in this forum are much more likely used to the incredibly powerful motion feature by having experienced it a t Nu
40% of all available BKS have been distributed to NSR holders which is over 50% of all distributed BKS so far:
42,500 BKS at seed investors
30,000 BKS sold
85,000 BKS distributed to NSR holders

157,500 BKS in total have been distributed of which 85,000 BKS are in the hands of NSR holders and I bet that most of the 42,500 BKS at seed investors and a decent amount of the 30,000 BKS are in the hands of frequent visitors of this forum.
A discussion here instead of at bitcointalk.org might lead faster to better results.
I find it necessary to advertise this motion at some point of time at bitcointalk.org

to show the power of motions
to include non NSR holders and (until then) non discuss.nubits.com visitors to the discussion before the voting starts

I hope that I’m not mistakenly assuming that BCE already supports motions and BKS grants.

Reasoning

Blocks & Chains Decentralized Exchange (below abbreviated BCE) is going to be of ground-breaking importance for exchanging crypto coins, crypto assets, blockchain based corporation shares.
The decentralized nature of it combined with multi signature transactions and native use of foreign blockchains makes it an ingenious piece of technology.

The expected support from Nu by supporting BCE with liquidity in USD equivalent, decentralized, blockchain based tokens (NBT) is limited to BCE and provides BCE with a position that can’t easily copied by competitors trying to create decentralized exchanges.

The potential of BCE is yet not widely understood or there’s not enough belief in BCE’s success.

Approximately 10,000 BKS are still for sale at $4.08, 20,187 BKS at $4.16, 20,187 BKS at $.4.24.
The last weeks showed a lack of interest in buying the remaining BKS.

People might want to wait until they see BCE work, before they want to put (more) money into it.
People who buy BKS late (after BCE is seen to be working) don’t have to shoulder the risk that seed investors or early funders had and still have to shoulder.

The seed investors had to pay roughly 2 NBT/BKS. Their risk was considerably high, because it was unclear whether the funding minimum would be reached.
Second round purchasers that made the minimum funding level complete by paying ~4 NBT/BKS still have a considerably higher risk than “late second round purchasers” who decide to buy once BCE is operational beyond an initial production blockchain.
The price of sold BKS needs to be adjusted accordingly.
4.08 NBT/BKS, 4.16 NBT/BKS or 4.24 NBT/BKS, respectively, doesn’t reflect that risk level appropriately.

When a certain milestone has been reached BKS holders can create BKS by a BKS grant and sell a batch of BKS at a price that is determined by then.

Possible milestones are

e.g. order messages are available at BCE
the first fill has been completed

This could be a viable way to better reflect the different level of risk in the BKS sale price.

It could also prevent the BKS price level from plummeting once BKS reaches exchanges (way before iterations of BCE with the exchange functions are available) as it reduces supply (at a fixed rate!) dramatically.

This leads to a very compact motion (“slightly” edited after @Nagalim’s suggestion and reworked after @tomjoad’s suggestion):

Motion

Motion RIPEMD160 hash: f8bcd3d068a6b35c92902a8d57e0e773e4e35352

=##=##=##=##=##=## Motion hash starts with this line ##=##=##=##=##=##=

This motion confirms BlockShareholders’ desire to cease the sale of undistributed BKS.At 23:59 UTC on the 5th day after this motion passes no new buy offers will be accepted by B&C Exchange.For purposes of accounting, this time will be defined as the time a message is received by B&C Exchange, not when the message was sent.At 23:59 UTC on the 7th day after this motion passes all undistributed BKS that have not been requested for purchase will be burned.At 23:59 UTC on the 14th day after this motion passes all undistributed BKS will be burned, including those that had been reserved for purchase, but no payment was sent.

=##=##=##=##=##=## Motion hash ends with this line ##=##=##=##=##=##=

Verify. Use everything between and including the <motionhash></motionhash> tags.

Nagalim · August 9, 2015, 2:19pm

The second-round has a total of $121,688 pledged. Can the language be something to the effect of ‘end the second-round funding x number of days after this motion passes, accepting all pledges before that time’ so that we get a last spurt of investors once the motion passes?

masterOfDisaster · August 9, 2015, 3:09pm

Sure, but there’s already some buffer from the draft of the motion until the voting for it. And it might take some time for it to pass as well.
So there’s a lot of time from now until the second-round sale can be called off.
But I agree that it helps to draw a proper line referring to a point of time after the motion passes to effectively stop the distribution and burn the BKS.

Dhume · August 9, 2015, 10:28pm

As posted in the other topic i strongly disagree, ill quote my reasoning here:

[quote=“Dhume, post:29, topic:2477, full:true”]This is where we completely disagree, I’ll also post my reasoning in your draft proposal topic.
Essentially my reasoning comes down to this, you can only make a first impression once so let’s try and make the best one? I think it would be much much better for B8C Exchange if we could launch it with additional features which have not been funded yet. Mainly a fully-fledged online wallet function, which could be a selling point of equal footing to being a decentralized exchange. And also a mobile app for both the wallet and exchange functions.

Just imagine if we could launch the exchange as both an 100% decentralized exchange as well as world’s safest online wallet, complete with mobile support for android and IOS. A wallet which is not only the safest online wallet but which would allow instant trading in the same app on your phone on world’s safest exchange with funds directly coming from your wallet without the need of having to transfer them to an exchange account. And all of this in 1 app. Now if we could get this up and running on release of the exchange I just can’t even imagine the success it will have. This is like every traders dream, or at least as a trader it’s my dream

Now I’m sure we need a lot of extra funding for this to become reality which is why in my opinion we NEED to sell the remaining Blockshares. Sell those shares now, maybe even cheaper than the current rate or in some kind of sale format where the more you buy the cheaper you get them. Like say 4% discount for every 1000 BKS you buy up to like 40% discount if you buy 10000 BKS. With the goal of generating additional funds so we can launch not a basic version of world’s first decentralized exchange but we can launch world’s best, safest, decentralized exchange and wallet all in 1 convenient package, including mobile support.
[/quote]

I would propose we suggest the wallet function and mobile app to the dev team to get an indication of what it might cost in terms of development. If this number is not to high (say below 100k USD) I strongly believe we should try and raise the funds necessary to realize these functions upon release of the exchange.

masterOfDisaster · August 9, 2015, 11:12pm

I would propose we wait for the first website offering convenient access to the BCE blockchain appears that has a nice mobile version and forget about the rest.
If that doesn’t happen in time, the development of exactly such a website gets funded by a BKS grant (or a BKC grant; unlikely, but possible if there’s already enough traffic by transactions on BCE’s blockchain).
I don’t see the benefit of an app for Android, IOS (what about WindowsPhone, etc.?)
You can have a very transparent funding of the website and as a result another product related to BCE that generates revenue: BCE’s exchange website with the fees for using the website!

edit: some more thoughts about such a website: [Passed] Motion to provide seed funding for B&C Exchange - a decentralized exchange built on the Peershares platform
Teaser for those who don’t know that post already: it deals with a trustless version of such a website

I don’t feel like you have explained why it’s necessary to continue the sale of BKS now.
And I haven’t found an explanation why those who come late and have to face much less risk, don’t have to pay more per BKS for having less risk…

Frankly, the current demand for buying BKS directly from BKS is low. This might change once BCE has it’s first success (whatever may be perceived as such). After that there will be demand, BKS will be more valuable. Let’s relfect that in the price.
If there’s no such success and BCE fails, the remaining 50,000 BKS will not be sold - either if the sale continues now or gets restarted by a new BKS grant.

But stopping the sale now would provide current BKS holders provide with a better exit from holding BKS (for those who want that):
stopping the BKS sale and burning the remaining BKS removes sell pressure from the market.
As long as the sale goes on it will be hard to come close to a price of $4 at the market.
…what you have demonstrated by your offer

A long as there’s a virtual sell wall of 10,000 BKS at $4.08 and over 20.000 BKS each at $4.16 and $4.24 the market price will be below that which is not in the best interest of the current BKS holders…
…who are able to change that by this motion once it has started.

Nagalim · August 9, 2015, 11:44pm

It’s really a question of business philosophy. I will attempt to outline a possible philosophy supported by this motion:

With funding for the barebones structure accomplished, we are given the capability to vote. The first kernel of motions should be a motion that empowers the shareholders to control their own economy, thus giving direction to future motions. As people discuss and propose new ideas that need funding, those projects can be funded with additional shares sold. This allows the shareholders to vote on each new project before allowing their money to be spent on it. Instead of channeling funds directly into the developer fund, the money is put into buying BKS on the open market, allowing price discovery so future sale prices can be more readily understood by shareholders.

JordanLee · August 9, 2015, 11:51pm

I’m in favour of a motion to cease BKS sales immediately. There are still a number of features we want to get funded. Ongoing development will be important to the success of B&C Exchange, so I fully expect we will see BKS grants in the future to fund development and marketing.

Now is not the right time to raise funds for future development.

Dhume · August 10, 2015, 12:02am

[quote=“masterOfDisaster, post:5, topic:2485, full:true”]
I don’t feel like you have explained why it’s necessary to continue the sale of BKS now.[/quote]
Additional funding for additional features. The better the exchange when it go’s live the faster it’ll become successful in my opinion.

I don’t think the current risk is much lower than the risk of the initial funders, it’s not like the exchange is up and running the blockchain isn’t even finalized yet (not trying to sound negative here).

[quote]But stopping the sale now would provide current BKS holders provide with a better exit from holding BKS (for those who want that):
stopping the BKS sale and burning the remaining BKS removes sell pressure from the market.
As long as the sale goes on it will be hard to come close to a price of $4 at the market.
…what you have [demonstrated by your offer][1]
A long as there’s a virtual sell wall of 10,000 BKS at $4.08 and over 20.000 BKS each at $4.16 and $4.24 the market price will be below that which is not in the best interest of the current BKS holders…
…who are able to change that by this motion once it has started.[/quote]
I do think it’s a good idea to stop the sale before BKS hits the markets, as explained in my post initial market prospect seems grim in the current situation, hence my offer. My reason for not supporting an immediate halt of the sale is my perceived belief we need additional funds for the additional features, if this is not the case then it would support this motion.

Dhume · August 10, 2015, 12:04am

Would you disagree with my opinion that it would be better to get the best possible version of the exchange developed before release instead of improving it after it has been released? I"m referring to the first impression argument i made in the other topic.

willy · August 10, 2015, 12:05am

No need to:

Dhume · August 10, 2015, 12:06am

That is great news!

tomjoad · August 10, 2015, 12:16am

I agree that releasing a stronger B&C Exchange initially would improve the odds that it generates early momentum. I’m curious how @JordanLee’s perspective has changed since he commented on this last:

[Passed] Motion to provide seed funding for B&C Exchange - a decentralized exchange built on the Peershares platform

Just as Nu development was greatly needed after our initial release in September, I’m sure additional development on B&C will also be essential. There are additional features which are very important like using time lock to release deposited funds regardless of what signers do. For instance, funds could be transferred from a deposit address to a withdrawal address one year after deposit. This would occur even if every single signer failed to sign. I have discussed how B&C can be used to guarantee Nu liquidity for a period of time and that is not part of the initial implementation. I suspect the escrow and reversible transaction capabilities are also very much worth pursuing but are unfunded at the 200,000 level. QA is also almost completely unfunded at that level (we are only paying for 8 hours a week at the 200,000 level). There are a lot of good reasons to continue getting additional funding. It will either have to be provided now or in a few months if B&C Exchange is to continue to flower.

We should use the time when B&C Exchange is novel and exciting to members of the community to get full funding.

masterOfDisaster · August 10, 2015, 12:22am

Thank you for your vote of confidence!

If there’s no demand for substantial change of the motion draft, I’m going to finalize it within the next two days.

If each of the features gets funded with a grant, there’s transparency and the possibility to achieve financial controlling.

The seed investors provided BCE development with money when it was unclear whether minimum funding would be achieved. They could have faced a total loss or would have funded the remaining money themselves.
Second-round purchasers sit here and wait for BCE to work and try to support the best they can whatever that means.
Their risk is considerably higher than the risk of people who wait for the first order to be processed on BCE to storm th e inbox of BCE and grab some of the remaining 50,000 BKS at $4.something.

The blockchain is finalized like @willy already pointed out.

Everything comes at a price.
The $200,000 that BCE has available for development will already fund some milestones. After only some of them have been achieved I bet there’s some recognition of BCE and people might want to buy BKS.
They will pay more than $4 then.
BCE will get even more money to develop an even better exchange if the sale gets stopped now and continued by BKS grants later.
If you are in favor of continuing the sale now, BCE will get money, but according to my prediction less than with a stopped sale and BKS grants later.
No need for a panic sale now

masterOfDisaster · August 10, 2015, 12:24am

I totally agree with your assessment, only I see a different and more efficient way to that goal.
Please have a look at the last paragraph of my last post. I don’t want to quote this here, would feel silly

Dhume · August 10, 2015, 12:35am

I’m very curious about this as well, since from the quote you posted it seems Jordan originally had the same position I am now holding. What is your reasoning for this reversal in position Jordan?

[quote=“masterOfDisaster, post:13, topic:2485, full:true”]The seed investors provided BCE development with money when it was unclear whether minimum funding would be achieved. They could have faced a total loss or would have funded the remaining money themselves.
Second-round purchasers sit here and wait for BCE to work and try to support the best they can whatever that means.
Their risk is considerably higher than the risk of people who wait for the first order to be processed on BCE to storm th e inbox of BCE and grab some of the remaining 50,000 BKS at $4.something.[/quote]
People buying BKS right now are still part of the second-round purchasers no? As stated I would agree with you that it’s a good idea to have the sale finished by the time BKS hits the exchanges.

Just now ye, right after I posted.

[quote]Everything comes at a price.
The $200,000 that BCE has available for development will already fund some milestones. After only some of them have been achieved I bet there’s some recognition of BCE and people might want to buy BKS.
They will pay more than $4 then.
BCE will get even more money to develop an even better exchange if the sale gets stopped now and continued by BKS grants later.
If you are in favor of continuing the sale now, BCE will get money, but according to my prediction less than with a stopped sale and BKS grants later.
No need for a panic sale now
[/quote]
The question is will additional functionalities upon release be more valuable than selling part or whole of that 50000 unsold BKS later on for a higher price? I think it is you disagree. I’m afraid we’re going to have to agree to disagree on this.

masterOfDisaster · August 10, 2015, 12:48am

I don’t know what you mean with “release”, but we already have a production blockchain. That doesn’t support the transactions required for BCE being an exchange.

I’m not talking about stopping the BKS sale now and wait until all is complete and the $200,000 funding is consumed.

I’m talking about stopping the BKS sale now and making grants once the demand for BKS is higher than it is now, because some parts of it are already working.
I doubt this will bring BCE less than $4 per BKS

It will bring even more functionalities if you can sell 50,000 BKS at $6 and have $300,000 for additional development instead of selling them for $200,000!

Regarding current demand for BKS:

Sabreiib · August 10, 2015, 1:11am

Potential investors are waiting and seeing. Just like me.

Because we don’t know the activity of NSR holders’ BKS, will they sell cheaply? If so, I’ll buy BKS on CCEK etc. If not, I’ll buy directly from developers.

Since we can go for auction of BKS as BKS holders wish from now, does it matter if we stop sale of BKS and open again in future?

Nagalim · August 10, 2015, 2:02am

The difference is accountability of the shareholders to the allocation of funds. If we raise 50k for general developer funds, we operate under the concept of a reserve with money that can flow from project to project. If we make individual project grants the money is allocated by the shareholders directly, rather than using a third party to act as reserve.

Dhume · August 10, 2015, 2:12am

With release I mean once the exchange is functional and opened to the public.

[quote]I’m not talking about stopping the BKS sale now and wait until all is complete and the $200,000 funding is consumed.
I’m talking about stopping the BKS sale now and making grants once the demand for BKS is higher than it is now, because some parts of it are already working.
I doubt this will bring BCE less than $4 per BKS
It will bring even more functionalities if you can sell 50,000 BKS at $6 and have $300,000 for additional development instead of selling them for $200,000! [/quote]
Your automatically assuming that BKS demand will be higher when the exchange is released. This is not necessarily the case, as stated in my post I think demand will be less then sell pressure. Even if we burn the 50000 for now. It could take months if not more than a year before demand is high enough to raise price over 4 dollars a piece.

My whole point is that to ensure demand is high in the future (and thus increase value of BKS) we need to release the best possible exchange we can. And I’m assuming that’s going to acquire additional funding (according to JasonLee the 200k is only for basic functioning, no gimmicks) on top of the 200k. Hence why I’m all for selling as much of that 50k shares we have left as we can, even if we need to sell them slightly cheaper (action them if you will).

You’re wrong to automatically assume that demand will be higher when the exchange starts operating and thus giving us the possibility to sell the remaining BKS at a higher price.

I feel my proposed strategy is less risky than yours and will ensure a greater chance of success and eventually lead to more valuable BKS.

JordanLee · August 10, 2015, 2:56am

The only thing that has changed is that we have observed weak demand for BlockShares very recently. Leaving BKS sales open prevents BKS from going up until all shares have sold. With shares not selling quickly right now, that could be a while. Creating a situation where BKS can drop in value but not rise for months is likely to have a dampening effect on BKS purchases.

In order to succeed, we have to prioritize defending the value of BlockShares. Making BlockShares more scarce than planned is an excellent way to do that. We have funding to complete a functional exchange. As we progress down that path, hopefully the project will get more recognition and BKS demand will rise. Then we can get additional funding.

I suspect those who are opposed to stopping BKS sales haven’t sufficiently appreciated that the current pace of BKS sales suggests that we simply don’t have the option of raising significant additional funds right now, even if we keep sales open. Where keeping sales open places heavy selling pressure on the BKS price, the potential problems of keeping sales open outweigh the potential benefits.