Yes, I agree with the problem statement. Let's get more users and investors to BiblePay.
With Dynamic Whale Staking, can you explain how this scheme passes the Howey test? To me, this is an investment and there is clear expectation of profit. If you deposit 1M BBP, you will get back 150BBP in one year. Sounds like a dividend or certificate of deposit. Isn't this a risk to BiblePay leaving it open to scrutiny by the SEC?
Up to this point, I am attempting to make the DWS feature very similar to staking rewards that many wallets generate rewards from (Except as an additional feature for our POW base, instead of a base feature).
So first, by your definition, would you agree that PIVX, with a 'stake reward' of 1.5% on a balance of 1000 pivx makes pivx an SEC investment? I dont think it fails the howey. Because the convenant is you receive 150 pivx on a 1000 pivx stake (this is a mining reward, just like our GSC contracts are mining rewards). Do you now also go back and say our current prod POG investments are failing the howey? Since they offer return bbp on staked amounts of bbp? I guess you would also think - all proof of stake coins would fail then also - correct?
First of all, I want biblepay to remain a utility. So we offer no expectation of profit from DWS. This is because a DWS whale burn only gives you back more BBP. We never promise to you that more bbp on your existing bbp equals a profit.
Lets look at the definition of the howey test.
When Howey broke up the citrus grove into N parts, they broke the law because they sold each citrus share with the expectation that They would do the work to make it profitable (they were the 3rd party citrus growers) and therefore it was a common enterprise, with expectation of profit.
The 4 reqs of Howey:
- Must be an investment of money
- With expectation of Profit
- In a common enterprise
- With profit to be generated by the 3rd party
So we have DWS, could be argued a crypto stake is or is not money. Ill take the conservative route and consider that BBP 'may be construed as money'.
However, we can knock out #2, by clarifying that a person is not buying a share, but making a SELF DIRECTED DECISION TO BURN BBP. BURNING BBP RESULTS IN A LOSS, WITH NO EXPECTATION OF A FUTURE PROFIT. Ill cover this in a minute.
Common Enterprise: I could speculate this is not a common enterprise, as burning BBP does not mean you are receiving a special service (IE a growing groundbreaking company or farm) . But lets veer on the conservative side and agree that someone might perceive we are so innovative that we are a common enterprise, because we offer expectation of cutting edge new releases.
Profit to be generated by 3rd party: This means you as a whale will not be doing any work - you are relying on us to make you a profit. I think we can clarify here that during a burn, the user is making a self directed decision, to burn their BBP stake - and BBP should not be expected to rise in value.
In a nutshell, I propose to make the burn command issue a statement:
1) You are burning your biblepay, with no expectation of profit, and biblepay is held as a harmless utility.
2) You are not guaranteed to receive a dynamic whale stake reward in the future.
3) By typing authorize you agree that this is a self directed decision. By typing authorize you do not expect biblepay to grow in value or perform any work to grow in value.
4) Once you type authorize, your coins will be destroyed, with no promise to receive them back in the future.
Then we make the reward side a "100% risk" that at the discretion of our wallet, we will *possibly* send you back your original BBP plus a Dynamic Whale Stake Reward.
EDIT: I propose we edit our nomenclature in the wallet, and ensure all references to rewards are 'Whale Reward Units'.
Also we will add a disclaimer requiring authorize, that ensures this is a self directed action by the user, resulting in no expectation of profit, and no promise by us for a future profit.
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