From b7e638653a7a5d1a725c26de3a26c7f4c3234f51 Mon Sep 17 00:00:00 2001 From: Fabian Schuh Date: Wed, 16 Dec 2015 14:55:53 +0100 Subject: [PATCH] BSIP-0008 --- bsip-0008.md | 113 +++++++++++++++++++++++++++++++++++++++++++++++++++ 1 file changed, 113 insertions(+) create mode 100644 bsip-0008.md diff --git a/bsip-0008.md b/bsip-0008.md new file mode 100644 index 0000000..8661e9d --- /dev/null +++ b/bsip-0008.md @@ -0,0 +1,113 @@ + BSIP: 0008 + Title: Fee Backed Assets + Authors: Danial Larimer + Stan Larimer + Fabian Schuh + Status: Draft + Type: Protocol + Created: 2015-12-16 + Discussion: + Worker: not applicable + +# Abstract + +We're all familiar with counterparty free Market Pegged Assets (MPA) and issuer +backed User Issued Assets (UIA). Theoretically, there could be a third type: Fee +Backed Assets (FBA). + +Hence we propose to develop a feature for *Market based innovation*: if people +can profit from successful features in the form of fees then it definitely helps +BitShares become more adaptable over time. More importantly it promotes +innovation. + +# Motivation + +A developer installs a new function that charges fees for its service and pays +those fees to holders of a UIA she creates for that purpose. + +She naturally starts out as the owner of those revenue producing assets. + +She is free to sell them since each one is a revenue generating counterparty +free asset backed solely by the blockchain. + +Since they have no counterparty, they are not a security. They are simply +capital equipment, like selling a mining machine. + +This new kind of digital asset trades like any of the others but has fascinating +new properties. + +There could be a new asset for every new revenue generating feature in the whole +ecosystem. Developers recoup their costs by selling (or pre-selling) these +revenue generating software devices (or keeping them to earn the revenue they +produce.) + +# Examples + +## Taxi Rental + +Build 100 robotic software taxi cabs that deliver private packages for hire. +Program them via blockchain logic to take turns delivering packages. Sell the +cabs to the network in exchange for a set of tickets good for rental minutes on +a cab. Resell/trade those tickets on the open market. This way, anyone can +rent time on any of the limited supply of "cabs" and earn fees for performing +delivery services. + +The TAXI FPA could represent all available minutes on a network-owned fleet of +robotic taxi cabs. Buy up as many minutes of their time as you want and you have +your own revenue generating business with no counter parties. + +## Project/Feature Funding + +In the case of [BSIP-0007](bsip-0007.md), the project development can be funded +by a PRIVACY FPA that gets their owners a cut of fees produced by transactions +using that feature in the future. + +# Regulatory issues + +Much consultation with Cryptonomex and with several prominent and trusted +members of the BitShares community has lead me to some preliminary conclusions +as to how a "Privacy Mode" feature could best be implemented and used in a +safe and timely fashion and at no risk to the BitShares Community. + +One of the first and thorniest problems we tackled is the nasty fact of +*Regulatory Risk*. There exists a vocal contingent of people who want very much +that an FBA (fee based asset) be created to fund this feature upgrade to the +BitShares blockchain. They want that everyone be thus enabled an opportunity to +participate in the fee stream originating from future use of the feature by +purchasing shares of a `STEALTH` asset. + +The conundrum is that whoever creates the FBA and offers it to the public as a +means of participation in a fee-based income stream faces a risk of coming under +regulatory scrutiny if the project is a success (e.g. Satoshi Dice) or even if +it is not a success (through some disgruntled investor complaining to a +regulatory authority). For a more in depth look in to Regulatory Risk please see +[1,2]. + +If something falls within the definition of a *security* under applicable law, +it will be governed by extensive rules and regulations that can be quite complex +and expensive to comply with. And subject the issuer to a large fine/other +penalties if not complied with! + +Once the "Privacy Mode" feature has been implemented and is available on the +blockchain (but not before), it will be possible for future investor and +entrepreneurs to create FBAs and crowd fund new features by having a *Private +Mode account* ([BSIP-0007](bsip-0007.md)), issue the FBA from an *unknown* +jurisdiction that is presumably not subject to securities concerns. + +# Management Account + +A FBA asset (such as the [STEALTH asset](bsip-0007.md)) will be issued by a +"management account" for that particular feature as part of a hard fork. The +initial share holders of the FBA asset have to be defined upon the hard fork. +The management account will have a Multi-Signature authority assigned to the `X` +largest share holders of that account weighted proportional to stake and will +have the power to set the fee. + +# Copyright + +This document is placed in the public domain. + +# See Also + +* [1] https://bitsharestalk.org/index.php/topic,20499.msg264752.html#msg264752 +* [2] http://www.cuttingedgecapital.com/what-is-a-security-and-why-does-it-matter/