I’m cross-posting from the Bitcoin talk thread:
All,
I’ve been discussing with busoni who operates Poloniex the possibility of Poloniex basically issuing and underwriting the value of 1 XBTC = 1 BTC.
I have already issued 21M XBTC (divisible, non callable). It isn’t locked because I’m getting an error locking it but this will be done prior to any sale of XBTC.
The idea is that Poloniex will create an service which will buy and sell XBTC to BTC at a fixed value of 1:1. The fee will be kept low + tx fees.
Pros
* Frictionless trading against XBTC
* More choice in the way the DEX is utilized
Cons
* Further centralized risk on Poloniex
If the idea goes forward, I’ll transfer the asset to himself so there will be no more XBTC in circulation than what he sells.
How does everyone feel about this?
Edit: so many spaces
[quote author=Global_trade_repo link=topic=117.msg680#msg680 date=1392769423]
I’m cross-posting from the Bitcoin talk thread:
All,
I’ve been discussing with busoni who operates Poloniex the possibility of Poloniex basically issuing and underwriting the value of 1 XBTC = 1 BTC.
I have already issued 21M XBTC (divisible, non callable). It isn’t locked because I’m getting an error locking it but this will be done prior to any sale of XBTC.
The idea is that Poloniex will create an service which will buy and sell XBTC to BTC at a fixed value of 1:1. The fee will be kept low + tx fees.
Pros
* Frictionless trading against XBTC
* More choice in the way the DEX is utilized
Cons
* Further centralized risk on Poloniex
If the idea goes forward, I’ll transfer the asset to himself so there will be no more XBTC in circulation than what he sells.
How does everyone feel about this?
Edit: so many spaces
[/quote]
How will Poloniex handle the centralization risk of this experiment?
The idea is interesting, but it would be nice to articulate the cons further.
[quote author=Bountyful link=topic=117.msg682#msg682 date=1392773972]
How will Poloniex handle the centralization risk of this experiment?
The idea is interesting, but it would be nice to articulate the cons further.
[/quote]
If there is sufficient interest from the community, I’d let the operator of Poloniex describe how he handles the operational risk of running an exchange.
Regarding the cons of XBTC, the risk to the community is firewalled to those who hold XBTC. Here are some scenerios I can think of:
1) The operator of Poloniex decides to disappear to a nice tropical island, the price of XBTC would collapse. XBTC would still be tradeable on the DEX but it’s unlikely to have much value.
2) Poloniex fails to meet meet obligations of delivery of XBTC <–> BTC due to insolvency. Same effect as 1)
3) Poloniex modifies the price of XBTC <–> BTC away from 1:1.
As with all exchanges, we hope that the transactional fees generated by the services on the exchange is sufficient to dissuade the operators from taking the funds in the wallets and disappearing.
Btw, regarding Poloniex it is quite easy to follow the deposit address of XCP to the main holding wallet for XCP. It currently contains some ~54,000 XCP. Around ~2% of all XCP in existance.
yes this is totally interesting.