PROPOSAL: Change Asset Issuance fee from XCP to BTC.
PROBLEM:
The Total XCP Supply is 2,648,735.92. The cost to issue an asset is 5 XCP which leaves us with a hard limit on asset issuance of 529, 747 for all of Counterparty. For any company using Counterparty to create assets, this is a hard ceiling on the business and incentive to move to other protocols to build asset businesses onto of the bitcoin protocol. I don’t believe Mastercoin has this limit.
SOLUTION:
I am sure we are using XCP to prevent asset spamming so I recommend that we change over to BTC burning for asset issuance. I propose we start with the equivalent BTC price for 5 XCP at the last DEX traded price. Thus the price of issuance moves to a floating price and we leave XCP available for other use cases such as dividends, betting, etc.
SOLUTION 2: BTC fees pegged at the 5XCP are paid to the currently Protocol Bounties in a portion to which bounties are a priority as determined by the community and the developers. For now, bounties are managed by the devs so all BTC fees will go to those bounties created and managed by the devs and the devs will update the community as to the use of funds. However, the future goal should be that bounties are protocol created, protocol voted (either by proof of stake) and then paid to BTC addresses are created and assigned by the protocol: A regular old decentralized autonomous Protocol.
I’d rather have the fee stay in XCP but the amount be fixed to a price in dollars or bitcoins so as the value of XCP goes up the amount required to create an asset stays low.
Maybe $100-$500 to create an asset? Perhaps issuance price should scale based on number of units since we’re seeing larger issuances have a greater chance of going viral but are also quite dangerous because people don’t do well with large ratios and on the fly mental math. Would be good for there to be a reason to create an asset with 1000 units instead of 100,000,000,000
[quote author=AdamBLevine link=topic=150.msg1003#msg1003 date=1393772733]
I’d rather have the fee stay in XCP but the amount be fixed to a price in dollars or bitcoins so as the value of XCP goes up the amount required to create an asset stays low.
Maybe $100-$500 to create an asset? Perhaps issuance price should scale based on number of units since we’re seeing larger issuances have a greater chance of going viral but are also quite dangerous because people don’t do well with large ratios and on the fly mental math. Would be good for there to be a reason to create an asset with 1000 units instead of 100,000,000,000
[/quote]
I totally agree that the price could be pegged to BTC, but I’m not sure of the benefit of burning XCP for asset issuance at all. I would ideally like to avoid burning XCP for asset issuance as the ongoing burning of XCP will make further business building on Counterparty too expensive and less compelling against new and coming substitute platforms willing to take this business at lower cost. Did I miss something about why you think burning XCP for asset issuance is vital to the protocol’s success?
I like the idea of scaling asset issuance cost with the volume of the asset, but I don’t think that’s a problem on Counterparty right now. The problem is asset spam and increasing the price for issuance scale will just mean more spam at lower numbers like units of 1.
Slightly Tangential other idea:
Maybe an Asset issuance subscription fee as well. Assets can be created and maintained for an ongoing fee. Any assets that aren’t “current” with their fees, simply expire in the same way domain names expire when they fail to pay their registration fees.
I was just having a conversation about this - Assets that expire is pretty drastic, an acquaintance suggested invalidating the tx of assets whose particular owners don’t pay their maintenance fees. So the asset is still fungible but it’s stuck wherever you last put it until the fees are paid.
I actually don’t think you should PoB for assets, I’d rather that go to a newbie faucet or some kind of redistribution mechanism as that creates a self perpetuating cycle of activity on the platform incentivizing new users with free money. The faucet could pay out a fixed % daily so it would never run out, but during a time when few assets are being created it might run low.
[quote author=Bountyful link=topic=150.msg1006#msg1006 date=1393774200]
[quote author=AdamBLevine link=topic=150.msg1003#msg1003 date=1393772733]
I’d rather have the fee stay in XCP but the amount be fixed to a price in dollars or bitcoins so as the value of XCP goes up the amount required to create an asset stays low.
Maybe $100-$500 to create an asset? Perhaps issuance price should scale based on number of units since we’re seeing larger issuances have a greater chance of going viral but are also quite dangerous because people don’t do well with large ratios and on the fly mental math. Would be good for there to be a reason to create an asset with 1000 units instead of 100,000,000,000
[/quote]
I totally agree that the price could be pegged to BTC, but I’m not sure of the benefit of burning XCP for asset issuance at all. I would ideally like to avoid burning XCP for asset issuance as the ongoing burning of XCP will make further business building on Counterparty too expensive and less compelling against new and coming substitute platforms willing to take this business at lower cost. Did I miss something about why you think burning XCP for asset issuance is vital to the protocol’s success?
I like the idea of scaling asset issuance cost with the volume of the asset, but I don’t think that’s a problem on Counterparty right now. The problem is asset spam and increasing the price for issuance scale will just mean more spam at lower numbers like units of 1.
Slightly Tangential other idea:
Maybe an Asset issuance subscription fee as well. Assets can be created and maintained for an ongoing fee. Any assets that aren’t “current” with their fees, simply expire in the same way domain names expire when they fail to pay their registration fees.
[/quote]
The reason that BTC cannot be burned is that politically it may be very damaging to indefinitely burn BTC
You are right that scaling asset issuance cost is missing the point of why there is a fee for asset issuance, in the first place: to prevent users from “spamming” the network with assets.
Your subscription fee idea requires that it be possible to destroy or “retire” an asset name, which cannot be done in Counterparty currently.
[quote author=cityglut link=topic=150.msg1008#msg1008 date=1393775122]
The reason that BTC cannot be burned is that politically it may be very damaging to indefinitely burn BTC
You are right that scaling asset issuance cost is missing the point of why there is a fee for asset issuance, in the first place: to prevent users from “spamming” the network with assets.
Your subscription fee idea requires that it be possible to destroy or “retire” an asset name, which cannot be done in Counterparty currently.
[/quote]
This is an excellent point. Yes, indefinite burning of BTC will bring the ire of those who think it is damaging to the ecosystem and as per Phantom’s statement regarding the unspendable Tx Outputs.
Maybe if I shared my “interests” as a Counterparty Smart Asset Issuer, that might help us find a more workable solution.
As an Asset Issuer my interests are as follows:
[list]
[li][size=1em]I have an profit interest to issue assets at a cost that does not put me out of business or force me to choose substitutes protocols[/size][/li]
[li][size=1em]I have a fair “value-exchanged” interest where my fees are aligned with the platform’s interest to cover the cost of maintenance and improvement for protocol continuance and increasing value against competing protocols. If the protocol continues to extend, the opportunities for my business may correlate and that is good for my profit interest above in #1.[/size][/li]
[li][size=1em]I have a competition interest where I seek sufficient barriers to entry against various competitors who may wish to compete with my offerings. Again, it helps improve my ability to make profits if I have less competition and less bad actors messing up the protocol.[/size][/li]
[/list]As an issuer, I would be willing to pay an asset issuance and maintenance fee to the protocol if these interests can be met because it would be considered a fair exchange of value and an incentive for continuity.
Does the protocol have any interests for which we can make a match?
For example: I see the protocol has bounties that need funding and these funds are currently being used to improve the protocol such as security hardening with Peter Todd and JahPowerBit’s GUI efforts.
Update Proposal: Fees instead of BTC being burnt, how about BTC being paid into the Counterparty Bounties? Ideally, this should be done in a decentralized manner where bounties are created by the community and the protocol automatically pays into the bounties with most votes or some other measurement mechanism. However, since we don’t have time to build entire new systems, if my fees were recorded in the blockchain as paid into these bounties BTC address, by the protocol, then I would be able to feel that I could meet my interests as well as the interest of the protocol. I would also be able to ask for performance value on the fees paid to the protocol, in the same way a member who pays fees to a club can ask to see where the dues are being spent and the value from those fees.
If there are many other issuers who share my interests, then the protocol may benefit by making it easier for us to build a smart property business on the Counterparty platform.
EDIT: Adam Levine’s thoughts about fees paying into a Faucet to increase participation in the protocol is another great idea of “use of fees” that can be delivered in a decentralized manner, except if I try to scam the faucet and get my fees back.
What about connecting a 24hr DEX price to a mechanism that lets you burn BTC at any point to create new XCP at a rate slightly above the 24hr or 7day market price.
I’ve actually got a paper on this concept.
[quote author=AdamBLevine link=topic=150.msg1015#msg1015 date=1393783170]
What about connecting a 24hr DEX price to a mechanism that lets you burn BTC at any point to create new XCP at a rate slightly above the 24hr or 7day market price.
I’ve actually got a paper on this concept.
[/quote]
I think the problem with burning BTC is that it creates unspendable txoutputs that risks raising the ire of the greater bitcoin community which will negatively impact future development on the protocol and further acceptance by the bitcoin community.
[quote author=Bountyful link=topic=150.msg1012#msg1012 date=1393782862]
[quote author=cityglut link=topic=150.msg1008#msg1008 date=1393775122]
The reason that BTC cannot be burned is that politically it may be very damaging to indefinitely burn BTC
You are right that scaling asset issuance cost is missing the point of why there is a fee for asset issuance, in the first place: to prevent users from “spamming” the network with assets.
Your subscription fee idea requires that it be possible to destroy or “retire” an asset name, which cannot be done in Counterparty currently.
[/quote]
This is an excellent point. Yes, indefinite burning of BTC will bring the ire of those who think it is damaging to the ecosystem and as per Phantom’s statement regarding the unspendable Tx Outputs.
Maybe if I shared my “interests” as a Counterparty Smart Asset Issuer, that might help us find a more workable solution.
As an Asset Issuer my interests are as follows:
[list]
[li][size=1em]I have an profit interest to issue assets at a cost that does not put me out of business or force me to choose substitutes protocols[/size][/li]
[li][size=1em]I have a fair “value-exchanged” interest where my fees are aligned with the platform’s interest to cover the cost of maintenance and improvement for protocol continuance and increasing value against competing protocols. If the protocol continues to extend, the opportunities for my business may correlate and that is good for my profit interest above in #1.[/size][/li]
[li][size=1em]I have a competition interest where I seek sufficient barriers to entry against various competitors who may wish to compete with my offerings. Again, it helps improve my ability to make profits if I have less competition and less bad actors messing up the protocol.[/size][/li]
[/list]As an issuer, I would be willing to pay an asset issuance and maintenance fee to the protocol if these interests can be met because it would be considered a fair exchange of value and an incentive for continuity.
Does the protocol have any interests for which we can make a match?
For example: I see the protocol has bounties that need funding and these funds are currently being used to improve the protocol such as security hardening with Peter Todd and JahPowerBit’s GUI efforts.
Update Proposal: Fees instead of BTC being burnt, how about BTC being paid into the Counterparty Bounties? Ideally, this should be done in a decentralized manner where bounties are created by the community and the protocol automatically pays into the bounties with most votes or some other measurement mechanism. However, since we don’t have time to build entire new systems, if my fees were recorded in the blockchain as paid into these bounties BTC address, by the protocol, then I would be able to feel that I could meet my interests as well as the interest of the protocol. I would also be able to ask for performance value on the fees paid to the protocol, in the same way a member who pays fees to a club can ask to see where the dues are being spent and the value from those fees.
If there are many other issuers who share my interests, then the protocol may benefit by making it easier for us to build a smart property business on the Counterparty platform.
EDIT: Adam Levine’s thoughts about fees paying into a Faucet to increase participation in the protocol is another great idea of “use of fees” that can be delivered in a decentralized manner, except if I try to scam the faucet and get my fees back.
[/quote]
Bountyful, please allow me to summarize the issues you are facing and the proposed solution:
1- it sounds like you intend to issue 1000s of small assets, and a 5 XCP fee (approx $30 at today’s pricing) would be prohibitive to your business model (eg. maybe you plan to issue 1 new Counterparty asset per baseball card in your collection, or something like that?)
2 - at 5 XCP there are 529,747 assets available; this is not going to be enough and could introduce problems in the future
3 - you are happy to pay a fee for issuance, but you want to know that the fee is going into making the protocol stronger, and not being wastefully burned
Does this basically summarize the situation? And then, as a solution, you are proposing:
1 - smaller USD-pegged fees
2 - all fees paid into the bounties
If I am understanding the problem and solution correctly, then it would be +1 from me.
[quote author=ginko-B link=topic=150.msg1019#msg1019 date=1393784440]
[quote author=Bountyful link=topic=150.msg1012#msg1012 date=1393782862]
[quote author=cityglut link=topic=150.msg1008#msg1008 date=1393775122]
The reason that BTC cannot be burned is that politically it may be very damaging to indefinitely burn BTC
You are right that scaling asset issuance cost is missing the point of why there is a fee for asset issuance, in the first place: to prevent users from “spamming” the network with assets.
Your subscription fee idea requires that it be possible to destroy or “retire” an asset name, which cannot be done in Counterparty currently.
[/quote]
This is an excellent point. Yes, indefinite burning of BTC will bring the ire of those who think it is damaging to the ecosystem and as per Phantom’s statement regarding the unspendable Tx Outputs.
Maybe if I shared my “interests” as a Counterparty Smart Asset Issuer, that might help us find a more workable solution.
As an Asset Issuer my interests are as follows:
[list]
[li][size=1em]I have an profit interest to issue assets at a cost that does not put me out of business or force me to choose substitutes protocols[/size][/li]
[li][size=1em]I have a fair “value-exchanged” interest where my fees are aligned with the platform’s interest to cover the cost of maintenance and improvement for protocol continuance and increasing value against competing protocols. If the protocol continues to extend, the opportunities for my business may correlate and that is good for my profit interest above in #1.[/size][/li]
[li][size=1em]I have a competition interest where I seek sufficient barriers to entry against various competitors who may wish to compete with my offerings. Again, it helps improve my ability to make profits if I have less competition and less bad actors messing up the protocol.[/size][/li]
[/list]As an issuer, I would be willing to pay an asset issuance and maintenance fee to the protocol if these interests can be met because it would be considered a fair exchange of value and an incentive for continuity.
Does the protocol have any interests for which we can make a match?
For example: I see the protocol has bounties that need funding and these funds are currently being used to improve the protocol such as security hardening with Peter Todd and JahPowerBit’s GUI efforts.
Update Proposal: Fees instead of BTC being burnt, how about BTC being paid into the Counterparty Bounties? Ideally, this should be done in a decentralized manner where bounties are created by the community and the protocol automatically pays into the bounties with most votes or some other measurement mechanism. However, since we don’t have time to build entire new systems, if my fees were recorded in the blockchain as paid into these bounties BTC address, by the protocol, then I would be able to feel that I could meet my interests as well as the interest of the protocol. I would also be able to ask for performance value on the fees paid to the protocol, in the same way a member who pays fees to a club can ask to see where the dues are being spent and the value from those fees.
If there are many other issuers who share my interests, then the protocol may benefit by making it easier for us to build a smart property business on the Counterparty platform.
EDIT: Adam Levine’s thoughts about fees paying into a Faucet to increase participation in the protocol is another great idea of “use of fees” that can be delivered in a decentralized manner, except if I try to scam the faucet and get my fees back.
[/quote]
Bountyful, please allow me to summarize the issues you are facing and the proposed solution:
1- it sounds like you intend to issue 1000s of small assets, and a 5 XCP fee would be prohibitive to your business model (eg. 1 token per baseball card, or something?)
2 - at 5 XCP there are 529,747 assets available; this is not going to be enough and could introduce problems in the future
3 - you are happy to pay a fee for issuance, but you want to know that the fee is going into making the protocol stronger, and not being wastefully burned
Does this basically summarize the situation? And then, as a solution, you are proposing:
1 - smaller USD-pegged fees
2 - all fees paid into the bounties
If I am understanding the problem and solution correctly, then it would be +1 from me.
[/quote]
Indeed ginko-B. Thank you for helping me articulate my interests in simple, straightforward sentences. I welcome the +1
[quote author=ginko-B link=topic=150.msg1019#msg1019 date=1393784440]
2 - all fees paid into the bounties
[/quote]
IMHO is not a good idea. Developments must be funded by donations from the community and those who develop successful business with XCP. Using fees for bounties adds a notion of authority and thus centralization.
[quote author=ginko-B link=topic=150.msg1019#msg1019 date=1393784440]
[quote author=Bountyful link=topic=150.msg1012#msg1012 date=1393782862]
[quote author=cityglut link=topic=150.msg1008#msg1008 date=1393775122]
The reason that BTC cannot be burned is that politically it may be very damaging to indefinitely burn BTC
You are right that scaling asset issuance cost is missing the point of why there is a fee for asset issuance, in the first place: to prevent users from “spamming” the network with assets.
Your subscription fee idea requires that it be possible to destroy or “retire” an asset name, which cannot be done in Counterparty currently.
[/quote]
This is an excellent point. Yes, indefinite burning of BTC will bring the ire of those who think it is damaging to the ecosystem and as per Phantom’s statement regarding the unspendable Tx Outputs.
Maybe if I shared my “interests” as a Counterparty Smart Asset Issuer, that might help us find a more workable solution.
As an Asset Issuer my interests are as follows:
[list]
[li][size=1em]I have an profit interest to issue assets at a cost that does not put me out of business or force me to choose substitutes protocols[/size][/li]
[li][size=1em]I have a fair “value-exchanged” interest where my fees are aligned with the platform’s interest to cover the cost of maintenance and improvement for protocol continuance and increasing value against competing protocols. If the protocol continues to extend, the opportunities for my business may correlate and that is good for my profit interest above in #1.[/size][/li]
[li][size=1em]I have a competition interest where I seek sufficient barriers to entry against various competitors who may wish to compete with my offerings. Again, it helps improve my ability to make profits if I have less competition and less bad actors messing up the protocol.[/size][/li]
[/list]As an issuer, I would be willing to pay an asset issuance and maintenance fee to the protocol if these interests can be met because it would be considered a fair exchange of value and an incentive for continuity.
Does the protocol have any interests for which we can make a match?
For example: I see the protocol has bounties that need funding and these funds are currently being used to improve the protocol such as security hardening with Peter Todd and JahPowerBit’s GUI efforts.
Update Proposal: Fees instead of BTC being burnt, how about BTC being paid into the Counterparty Bounties? Ideally, this should be done in a decentralized manner where bounties are created by the community and the protocol automatically pays into the bounties with most votes or some other measurement mechanism. However, since we don’t have time to build entire new systems, if my fees were recorded in the blockchain as paid into these bounties BTC address, by the protocol, then I would be able to feel that I could meet my interests as well as the interest of the protocol. I would also be able to ask for performance value on the fees paid to the protocol, in the same way a member who pays fees to a club can ask to see where the dues are being spent and the value from those fees.
If there are many other issuers who share my interests, then the protocol may benefit by making it easier for us to build a smart property business on the Counterparty platform.
EDIT: Adam Levine’s thoughts about fees paying into a Faucet to increase participation in the protocol is another great idea of “use of fees” that can be delivered in a decentralized manner, except if I try to scam the faucet and get my fees back.
[/quote]
Bountyful, please allow me to summarize the issues you are facing and the proposed solution:
1- it sounds like you intend to issue 1000s of small assets, and a 5 XCP fee (approx $30 at today’s pricing) would be prohibitive to your business model (eg. maybe you plan to issue 1 new Counterparty asset per baseball card in your collection, or something like that?)
2 - at 5 XCP there are 529,747 assets available; this is not going to be enough and could introduce problems in the future
3 - you are happy to pay a fee for issuance, but you want to know that the fee is going into making the protocol stronger, and not being wastefully burned
Does this basically summarize the situation? And then, as a solution, you are proposing:
1 - smaller USD-pegged fees
2 - all fees paid into the bounties
If I am understanding the problem and solution correctly, then it would be +1 from me.
[/quote]
(1) would require making extremely frequent changes to the protocol indefinitely, which is to be avoided.
[quote author=JahPowerBit link=topic=150.msg1023#msg1023 date=1393785790]
[quote author=ginko-B link=topic=150.msg1019#msg1019 date=1393784440]
2 - all fees paid into the bounties
[/quote]
IMHO is not a good idea. Developments must be funded by donations from the community and those who develop successful business with XCP. Using fees for bounties adds a notion of authority and thus centralization.
[/quote]
But what if the bounties are community-generated and community-ranked, like Bountyful was proposing? (And I understand that building such a system is a huge amount of work… sigh)
[quote author=ginko-B link=topic=150.msg1030#msg1030 date=1393789506]
[quote author=cityglut link=topic=150.msg1025#msg1025 date=1393787794]
[quote author=ginko-B link=topic=150.msg1019#msg1019 date=1393784440]
[quote author=Bountyful link=topic=150.msg1012#msg1012 date=1393782862]
[quote author=cityglut link=topic=150.msg1008#msg1008 date=1393775122]
The reason that BTC cannot be burned is that politically it may be very damaging to indefinitely burn BTC
You are right that scaling asset issuance cost is missing the point of why there is a fee for asset issuance, in the first place: to prevent users from “spamming” the network with assets.
Your subscription fee idea requires that it be possible to destroy or “retire” an asset name, which cannot be done in Counterparty currently.
[/quote]
This is an excellent point. Yes, indefinite burning of BTC will bring the ire of those who think it is damaging to the ecosystem and as per Phantom’s statement regarding the unspendable Tx Outputs.
Maybe if I shared my “interests” as a Counterparty Smart Asset Issuer, that might help us find a more workable solution.
As an Asset Issuer my interests are as follows:
[list]
[li][size=1em]I have an profit interest to issue assets at a cost that does not put me out of business or force me to choose substitutes protocols[/size][/li]
[li][size=1em]I have a fair “value-exchanged” interest where my fees are aligned with the platform’s interest to cover the cost of maintenance and improvement for protocol continuance and increasing value against competing protocols. If the protocol continues to extend, the opportunities for my business may correlate and that is good for my profit interest above in #1.[/size][/li]
[li][size=1em]I have a competition interest where I seek sufficient barriers to entry against various competitors who may wish to compete with my offerings. Again, it helps improve my ability to make profits if I have less competition and less bad actors messing up the protocol.[/size][/li]
[/list]As an issuer, I would be willing to pay an asset issuance and maintenance fee to the protocol if these interests can be met because it would be considered a fair exchange of value and an incentive for continuity.
Does the protocol have any interests for which we can make a match?
For example: I see the protocol has bounties that need funding and these funds are currently being used to improve the protocol such as security hardening with Peter Todd and JahPowerBit’s GUI efforts.
Update Proposal: Fees instead of BTC being burnt, how about BTC being paid into the Counterparty Bounties? Ideally, this should be done in a decentralized manner where bounties are created by the community and the protocol automatically pays into the bounties with most votes or some other measurement mechanism. However, since we don’t have time to build entire new systems, if my fees were recorded in the blockchain as paid into these bounties BTC address, by the protocol, then I would be able to feel that I could meet my interests as well as the interest of the protocol. I would also be able to ask for performance value on the fees paid to the protocol, in the same way a member who pays fees to a club can ask to see where the dues are being spent and the value from those fees.
If there are many other issuers who share my interests, then the protocol may benefit by making it easier for us to build a smart property business on the Counterparty platform.
EDIT: Adam Levine’s thoughts about fees paying into a Faucet to increase participation in the protocol is another great idea of “use of fees” that can be delivered in a decentralized manner, except if I try to scam the faucet and get my fees back.
[/quote]
Bountyful, please allow me to summarize the issues you are facing and the proposed solution:
1- it sounds like you intend to issue 1000s of small assets, and a 5 XCP fee (approx $30 at today’s pricing) would be prohibitive to your business model (eg. maybe you plan to issue 1 new Counterparty asset per baseball card in your collection, or something like that?)
2 - at 5 XCP there are 529,747 assets available; this is not going to be enough and could introduce problems in the future
3 - you are happy to pay a fee for issuance, but you want to know that the fee is going into making the protocol stronger, and not being wastefully burned
Does this basically summarize the situation? And then, as a solution, you are proposing:
1 - smaller USD-pegged fees
2 - all fees paid into the bounties
If I am understanding the problem and solution correctly, then it would be +1 from me.
[/quote]
(1) would require making extremely frequent changes to the protocol indefinitely, which is to be avoided.
[/quote]
Is there a way to do this with a formula in the protocol? So that the protocol would not need constant modification?
For example, what about embedding a formula in the protocol, i.e. Asset Issuance Price = XCP / USD exchange rate (possibly 3-day rolling average) * USD $3 price = “x” XCP.
And then perhaps on the Counterparty home page you could quote a daily update for the[font=verdana] “XCP Asset Issuance Price Fix”?[/font]
[/quote]
Where would you get your data for the conversion rate? From a centralized exchange? From the DEX?
How would you justify picking one over the other?
[quote author=cityglut link=topic=150.msg1031#msg1031 date=1393789740]
[quote author=ginko-B link=topic=150.msg1030#msg1030 date=1393789506]
[quote author=cityglut link=topic=150.msg1025#msg1025 date=1393787794]
[quote author=ginko-B link=topic=150.msg1019#msg1019 date=1393784440]
[quote author=Bountyful link=topic=150.msg1012#msg1012 date=1393782862]
[quote author=cityglut link=topic=150.msg1008#msg1008 date=1393775122]
The reason that BTC cannot be burned is that politically it may be very damaging to indefinitely burn BTC
You are right that scaling asset issuance cost is missing the point of why there is a fee for asset issuance, in the first place: to prevent users from “spamming” the network with assets.
Your subscription fee idea requires that it be possible to destroy or “retire” an asset name, which cannot be done in Counterparty currently.
[/quote]
This is an excellent point. Yes, indefinite burning of BTC will bring the ire of those who think it is damaging to the ecosystem and as per Phantom’s statement regarding the unspendable Tx Outputs.
Maybe if I shared my “interests” as a Counterparty Smart Asset Issuer, that might help us find a more workable solution.
As an Asset Issuer my interests are as follows:
[list]
[li][size=1em]I have an profit interest to issue assets at a cost that does not put me out of business or force me to choose substitutes protocols[/size][/li]
[li][size=1em]I have a fair “value-exchanged” interest where my fees are aligned with the platform’s interest to cover the cost of maintenance and improvement for protocol continuance and increasing value against competing protocols. If the protocol continues to extend, the opportunities for my business may correlate and that is good for my profit interest above in #1.[/size][/li]
[li][size=1em]I have a competition interest where I seek sufficient barriers to entry against various competitors who may wish to compete with my offerings. Again, it helps improve my ability to make profits if I have less competition and less bad actors messing up the protocol.[/size][/li]
[/list]As an issuer, I would be willing to pay an asset issuance and maintenance fee to the protocol if these interests can be met because it would be considered a fair exchange of value and an incentive for continuity.
Does the protocol have any interests for which we can make a match?
For example: I see the protocol has bounties that need funding and these funds are currently being used to improve the protocol such as security hardening with Peter Todd and JahPowerBit’s GUI efforts.
Update Proposal: Fees instead of BTC being burnt, how about BTC being paid into the Counterparty Bounties? Ideally, this should be done in a decentralized manner where bounties are created by the community and the protocol automatically pays into the bounties with most votes or some other measurement mechanism. However, since we don’t have time to build entire new systems, if my fees were recorded in the blockchain as paid into these bounties BTC address, by the protocol, then I would be able to feel that I could meet my interests as well as the interest of the protocol. I would also be able to ask for performance value on the fees paid to the protocol, in the same way a member who pays fees to a club can ask to see where the dues are being spent and the value from those fees.
If there are many other issuers who share my interests, then the protocol may benefit by making it easier for us to build a smart property business on the Counterparty platform.
EDIT: Adam Levine’s thoughts about fees paying into a Faucet to increase participation in the protocol is another great idea of “use of fees” that can be delivered in a decentralized manner, except if I try to scam the faucet and get my fees back.
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Bountyful, please allow me to summarize the issues you are facing and the proposed solution:
1- it sounds like you intend to issue 1000s of small assets, and a 5 XCP fee (approx $30 at today’s pricing) would be prohibitive to your business model (eg. maybe you plan to issue 1 new Counterparty asset per baseball card in your collection, or something like that?)
2 - at 5 XCP there are 529,747 assets available; this is not going to be enough and could introduce problems in the future
3 - you are happy to pay a fee for issuance, but you want to know that the fee is going into making the protocol stronger, and not being wastefully burned
Does this basically summarize the situation? And then, as a solution, you are proposing:
1 - smaller USD-pegged fees
2 - all fees paid into the bounties
If I am understanding the problem and solution correctly, then it would be +1 from me.
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(1) would require making extremely frequent changes to the protocol indefinitely, which is to be avoided.
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Is there a way to do this with a formula in the protocol? So that the protocol would not need constant modification?
For example, what about embedding a formula in the protocol, i.e. Asset Issuance Price = XCP / USD exchange rate (possibly 3-day rolling average) * USD $3 price = “x” XCP.
And then perhaps on the Counterparty home page you could quote a daily update for “x” the[font=verdana] “XCP Asset Issuance Price Fix”?[/font]
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Where would you get your data for the conversion rate? From a centralized exchange? From the DEX?
How would you justify picking one over the other?
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The fairest approach would be a volume-weighted average of all XCP trading volume across all exchanges including on DEX, Poloniex, and any future exchange. Once there are more than 5 exchanges making a market in XCP then you could re-vert to volume-weighted average of, say, the three highest-volume exchanges.
EDIT: 7-day to 14-day rolling average probably best for a number of reasons.
How about simply setting issuance fee value so that on average X number of assets are expected to be issued per Y days? e.g. more assets issued in the last N blocks, costs go up. Make it auto adjust like the bitcoin difficulty. We just need to decide on a reasonable target like 10 assets every 2016 blocks or something.
This will remove the limit on asset issuance while limiting the number of issuance.
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How about simply setting issuance fee value so that on average X number of assets are expected to be issued per Y days? e.g. more assets issued in the last N blocks, costs go up. Make it auto adjust like the bitcoin difficulty. We just need to decide on a reasonable target like 10 assets every 2016 blocks or something.
This will remove the limit on asset issuance while limiting the number of issuance.
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This is an interesting proposal, and I can see the benefit of ensuring quality control, basically, the asset issuance fee value would rise dynamically to such a level that only, say, 10 assets could be issued in the last, say, 10 blocks, ensuring an average issuance rate of, say, 1 new asset issuance per block.
Edit: What kind of an equilibrium would form under such a system? Well, projecting forward, my intuition tells me that such a scheme would result in Counterparty becoming a relatively more exclusive platform for listing the highest value assets, as only the owners of the most valuable assets could afford to compete in the dynamic auction for the "listing rights". This bias towards high-value assets might be viewed as form of quality control.
ASsuming that I fully understand the proposal, sadly, it would wipe out the possibility of an owner of a collection of thousands of hockey cards, stamps, gemstones, pieces of art, silver bars, or rare coins creating a new Counterparty asset for each and every item in the collection, which, in full disclosure, is the business model I have been pursuing.
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2 - all fees paid into the bounties
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IMHO is not a good idea. Developments must be funded by donations from the community and those who develop successful business with XCP. Using fees for bounties adds a notion of authority and thus centralization.
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But what if the bounties are community-generated and community-ranked, like Bountyful was proposing? (And I understand that building such a system is a huge amount of work… sigh)
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I like this proposal, we desperately needs funds for security and development related bounties.
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2 - all fees paid into the bounties
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IMHO is not a good idea. Developments must be funded by donations from the community and those who develop successful business with XCP. Using fees for bounties adds a notion of authority and thus centralization.
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Well, there’s a free-rider problem that funding with donations doesn’t solve: Donations are voluntary so most people will not give a donation to cover the true cost of improving the protocol. Being a free rider is cheaper than putting up funds for development.
Secondly, the bounties are already handled by the devs and it is centralized as of today so I’m not sure we can avoid centralization. Like you, I aspire to pure decentralization which is why i say this is a bridge to building a self-sustaining funding system inside the protocol or a Decentralized Autonomous Protocol. I would like to know that the system can fund itself given that the burn period is over and there is no further way to create more XCPs. I would also like to find a way to make sure that my fees for asset issuance can benefit the protocol vs. just going to burning which is unattractive for the various reasons I listed above.
If collecting fees for the protocol is not attractive because it centralizes authority and is too onerous to put into the protocol, then let’s reduce the XCP burning fee to something much lower than 5XCP?
In this way, the hurdle to building asset issuance businesses is much cheaper than the current cost.