RE: The Agorise Report : C-IPFS, Stealth and Blinded Transactions, POS Systems, Mobile Wallets, graphenej...
Thx for this update Ken.
Your comment above confirms a convo I had with a guy who was asking about how the "buyback" works for FBAs. I told him that FBAs don't use a buyback scheme, that the fees collected from stealth transactions are paid ONLY to holders of the STEALTH token. 60% of the stealth transaction fee goes to STEALTH token holders. He said the buyback was documented on Cryptofresh. I flatly said if so it's wrong. Is it? Is that statement (A Fee Backed Asset that will be bought back with 60% of all fees from stealth or confidential transfers.) correct? I don't believe it is, unless the approach for FBA has changed.
The whole reason for FBA is to provide a recurring stream of value to those who create new features. It's their work, they should receive value for it as long as people continue to use that feature. FBA tokens (such as STEALTH) are the distribution mechanism for 60% of the transaction fees collected for using the feature. The FBA creator also holds all of the FBA tokens initially and can distribute those tokens to anyone. They represent who will get a cut of the transaction fees after the FBA feature is successfully deployed and used.
For BitShares stealth, the original STEALTH token holder / FBA creator was onceuponatime. He distributed STEALTH tokens to Daniel Larimer, Ken Silver, myself and perhaps a few others. Kencode sold a bunch to chris4210. Ownership has changed hands of these tokens many times. I still hold all 20000 of the STEALTH tokens onceuponatime sent me for my participation on the stealth management team, which won't exist until the stealth feature is operational.
That's the FBA scheme as I understand it. It doesn't make sense to buy back STEALTH tokens, as doing so will stop the recurring stream of value to the one who previously owned them, which is contrary to the recurring value stream FBAs were designed to provide.
Now I don't know when this buyback mechanism was introduced to stealth, but it wasn't involved in the FBA approach I recall reading about on the bitsharestalk forum or discussed with onceuponatime or kencode. What is the purpose of this buyback? Are buyback & STEALTH transaction fees being conflated? Could we get clarification about this buyback, what it's for, what is being bought back (presumably not STEALTH tokens, as they are the source of recurring value). Has buyback arisen to replace BlockPay token in some way?
Hey Thom, that's a great point. Maybe @dantheman @dan could chime in here to help clarify this for us?
We @Agorise think it works by putting constant buy pressure on the market. There's no actual "distribution" after that. But the price of STEALTH tokens are pushed upwards because there is ALWAYS a buyer for it, as long as there are people making Stealth transactions and paying the fees.
The buyback account appears to be an automaton account. Nobody has the keys for it, nobody can control it, as far as we can see. Its only job is to buy STEALTH tokens. 60% of all the Stealth transaction fees go into the buyback account via an “accumulator”, and once every hour the account spends its entire balance to buy as much STEALTH as it can with its accumulated BTS.
So the BTS doesn’t really appear to get "distributed" per se. Rather it goes to buying STEALTH off the top of the order book. The fact that it is doing this can be verified by looking at the buyback account’s history. This "buy pressure" results in a higher STEALTH token price and increases the value of the STEALTH token for everybody.
(Our remaining question tho is: what happens to the STEALTH that the stealth-buyback account purchases? Is it burned? Is it redistributed over the current holders of STEALTH tokens? Is it held and available to fund future Stealth development? Our impression thus far is that it is "locked" in the buyback account, presumably forever. Not technically burned, but effectively so, since no human has control of that buyback account. In fact, the current STEALTH balance of stealth-buyback appears to be the sum total of all STEALTH that the buyback account has ever purchased off the market. If this is how it works, it effectively makes STEALTH a deflationary currency, and this puts upward pressure on the price).
Interesting. Sounds like STEALTH will end if the system ever buys back all tokens remaining. :)