This idea stems from the desire to appeal to a large user base (IE mass PR/Advertising), without paying a lot of advertising dollars per new user, new user retention, and price appreciation.
What this theoretically does right off the bat is makes BBP more valuable, because we can set this up to ensure that at least the same value of BBP locks up an equivalent or more amount of DASH. For those who do it, they receive the interest reward. Those that dont are 'out of the loop' and they will strive to either do it or maybe exit and sell off the coins.
- Doing this would theoretically mean unlimited popularity - since this would appeal to the Entire Dash Investor group
(I believe this would be more than 100,000 distinct users). The appeal is, we are saying IF you hold a DASH UTXO, and a BBP UTXO, you receive the DWS reward (about 30% ROI).
I think a lot of Dash investors would consider doing this, because that means earning BBP on their DASH without liquidating DASH.
- Elements of a stable price (currency backed by another currency). Since BBP would lock up an equiv. amount of DASH, theoretically our price would rise as more and more come in to buy more BBP to lock up dash.
- Rewards for the Dash investor base that currently do not receive rewards.
- Higher interest rewards for BiblePay users who diversified over more than one currency: This is because with POOS coming, a lot of sancs have no avenue to earn rewards. With DASH backed rewards, they can put that BBP in the Dash-BBP bucket.
- A 'non participation penalty' for coins that sit for sale on exchanges
- Diversification: This makes BBP much more like a stablecoin. This means if you hold $1K of BBP and $1K of DASH, and earn 30% per year, you have twice the chance of weather a crypto-meltdown than if you simply hold one currency. It might also bring some positive reputation to BIBLEPAY also, to be yoked with DASH much more tightly.
- In wallet - your keys - so you control the security on this - and you do not have to give up your DASH keys or your BBP keys
- DASH has 560% new users in Venezuela this year - and this goes hand in hand with our initiative to provide a stipend to VZ citizens to help them (IE a weekly bread allowance in BBP)
Also our ties with "dashpay" allow users of BBP to spend DASH - therefore we have a positive relationship in spending BBP to dash merchants also.
Here is theoretically how this system would work:
BBP would strive to ask users to lock every UTXO with a matching DASH UTXO of equal value or more, in order to create a contract for that UTXO.
(They would click a command that locks the Dash UTXO-Priv-Key against the BBP-UTXO-PrivKey creating a contract - and at that particular time the DASH UTXO must be greater in price than the BBP UTXO they hold - IE $1050 for Dash and $900 for BBP is OK for a duration of say 90 days). The BBP wallet would record a current interest rate reward (depending on how long the lock is). BBP would constantly monitor both the DASH UTXO and the BBP UTXO. If either is spent, the contract will be nullified. However, if neither is spent, each month, the BBP user would receive a reward automatically from the coinbase - containing the interest component. The Lock would continue in place until the duration expires. (So a 6 month lock would equal 6 coupon payments).
For security purposes, we would not ask the Dash user to give us their private keys - instead we will have them sign the UTXO from the dash wallet using a command we provide, and they will paste the sig into the bbp command. This will prove ownership of the UTXO on the BBP side- then we will monitor it until its spent. On the BBP side we will sign their UTXO ourselves and put all this in a contract.
The BBP wallet would pull information from the DASH network to know about their UTXOs automaticaly, and memorize them. It would then REJECT new contracts that are attempted on spent UTXOs automatically. Anyone who spends a DASH UTXO mid contract would cause cancellation of the contract, therefore they would lose the upcoming dividend strip.
One thing I like particularly is the free advertising. Its very difficult to advertise a crypto without paying massive coinbase emission or campaign fees.
Note that I am not creating this because I hold any DASH myself. I actually dont have much DASH right now, but I would be willing to do this myself as I can see the value in gaining diversification away from the USD and into dual-cryptos at once.
EDIT: I am adding the following summary (as of September 5th, 2020) for the sake of the production vote to authorize us to release this first version of dashstake into production:
- This is version 1.0 of DashStake Rewards. It only rewards users for locked UTXOs that tie DASH + BBP together in a contract.
- This rewards the user a once per month reward, if the contract is still active. The contract is active if it is not expired, and both the BBP and the DASH UTXOs are not spent.
- (In the next thread (to be created soon), we can discuss a more complicated idea, where we will create a sustainable use case for BBP (a marketplace for buying and selling the staked reward component), and opening up more currency pairs than just DASH+BBP) however this initial system being released is the 'simple' version.
- In production, we authorize Dash/BBP homogenized rewards to share the DWS reward pool, for up to 6 months. In the next mandatory design in testnet, we will measure the emissions and create a plan to not defer from the original emission covenant (as, we are committed to NEVER spending more than we promised over the long term emission schedule). This means that we intend to limit our emissions to 2.84 B by the end of 2021.
- In production, the Dash+BBP DWS rate will start out high (about 53%) due to the codes allocation from the kitty, but this will drop as demand increases.
- I estimate that we will pay no more than 20MM BBP before the end of the year in rewards (based on our budget of 4.3MM in monthly whale stakes allocated in
http://wiki.biblepay.org/Emission_Schedule_2020 ).
- We will discuss a more sustainable future for DWS rewards in our upcoming thread, meaning that we desire to have a revenue stream for BBP that helps pay for these rewards, very soon in production. It is my desire to charge either fees or marketplace charges to recoup a large percent of these rewards in our next design, and, to roll this out within 6 months so as to lower the costs yet provide a useful service for the world.
- Part of the impetus of this reward system is creating a partnership with Dash, their investor base, and establishing a PR campaign around DashStake BBP Rewards.
This proposal authorizes the BiblePay Devs to release this feature into Production as of block 221170 (September 20th, 2020).
