<stellar-slack1>
<sacarlson> but not sure how time bound transactions could be tied to interest rates
<dirtywhite>
well interest rates are time bound pre-agreed transactions
<stellar-slack1>
<sacarlson> yes so if you locked the asset from being moved by the depositor you could I guess setup a timebound payment at some point in time
<stellar-slack1>
<sacarlson> that included the original balance plus interest
<dirtywhite>
nono
<stellar-slack1>
<sacarlson> oh yes I think that works but more like a bond you couldn't do any early withdraw
<dirtywhite>
the interest in my case would be paid by the depositor to the fiduciary
<dirtywhite>
as a fee for holding the asset
<dirtywhite>
so ideally I would auction off one month at a time
<dirtywhite>
or varying lengths
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<dirtywhite>
so ideally the asset has a perpetual inflation which is determined by the markets
<dirtywhite>
I guess it could get inverted too
<dirtywhite>
who knows
<dirtywhite>
thats usually called time deposits
<dirtywhite>
from lending the gold
<dirtywhite>
as with the govt of india which is trying to borrow gold from the public at 2% or thereabouts
<dirtywhite>
stellar or some other logic above it has to take care of those financial realities
<dirtywhite>
people lend and protect funds at a cost, those transations should be well integrated into the logic
<stellar-slack1>
<dzham> dirtywhite: what asset would I pay you for you told hold for me?
<dirtywhite>
the end-result I would like to see is a wallet amount that continously depreciates in real-time based on the demand and availability of deposits
<dirtywhite>
dzham, the payment can simply be made in the same asset, I would just use gold for obvious reasons
<stellar-slack1>
<dzham> okok, gold.. so.. Ripple has demurrage, Stellar decided to remove it. Nobody uses it in Ripple, because it makes everything complicated
<dirtywhite>
so I guess it would becalled xau, but it is an interest-taking instrument
<dirtywhite>
dzham, well it is a problem that will be externalized anyway, so the sooner it is solved, the better systems like stellar can work
<stellar-slack1>
<dzham> I’ll try to remember what I said last time this came up.. I think my recommended approach would be keep everything in “units” where each unit corresponds to 1 tr oz Au at time t0, with 100% equity for the holder and 0% for the fiduciary. That equity is shifted over to the fiduciary as time goes by. The fiduciary takes this into account in its bid/ask..
<dirtywhite>
how is the rate allowed to move?
<dirtywhite>
I can see that eventually most everyone will be content to pay their fiduciary on a micro time scale
<dirtywhite>
so the rate needs a way to be bid up or down
<dirtywhite>
otherwise we'll need those bitcoin mining rigs to keep track of all the different notes issued
<dirtywhite>
I can probably use stellar and make it work 1975-style
<dirtywhite>
god knows it doesnt scale
<stellar-slack1>
<dzham> why do you need the rate to change? If your cost is 0.5% pa, then just spread that out over a year, and update the equity every day
<dirtywhite>
dzham, youre going off topuc
<dirtywhite>
dzham, actual rates move all the time
<stellar-slack1>
<dzham> isn’t that move the case for bonds, than for keeping custody of gold?
<dirtywhite>
dzham, everything moves all the time
<dirtywhite>
banking deals with gold and time
<dirtywhite>
if I hear tanks coming towards the bank, my deposit fees will spike up
<stellar-slack1>
<dzham> ok ok, but will they change for you on a given contract, or just at the next auction?
<dirtywhite>
if I only have overnight contracts then technically everyone has to accept the rate or come pick up their gold
<dirtywhite>
otherwise, I may have longer-durations already sold
<dirtywhite>
but that would probably mean they were trying to get a better rate
<dirtywhite>
or lend the bank
<dirtywhite>
so the same mechanism operates in both directions
<dirtywhite>
the rate curve can vary
<stellar-slack1>
<dzham> how does the auction work? does all successful bidders get ONE rate, or they pay the rate they bid?
<dirtywhite>
dzham, of course bidders get the rate they bid for
<stellar-slack1>
<dzham> alright, so you might have ten different rates for a month
<dirtywhite>
anything that isnt redeemable on-demand doesnt count
<dirtywhite>
so your overnight rate is the main one
<dirtywhite>
everything else is for more developped markets or niche players
<stellar-slack1>
<dzham> This is super interesting, BTW
<dirtywhite>
so basically one instrument, redeemable on demand which pays a varying rate back to the emitter, the said rate being put on offer by the emitter(or current depositors) and bid by depositors
<dirtywhite>
of course the emitter could bid his own rate back down to buy his liabilities back
<dirtywhite>
but I dont know too much about stellar-core, I just present my problem as a banker
<dirtywhite>
or gold fiduciary
<stellar-slack1>
<dzham> I think it gets complicated with all the different rates, since you need to keep track of that yourself. If you’re doing 1-day contracts, and have one overnight rate, then it’s a lot simpler of course.
<dirtywhite>
dzham, iv seen some ripple gateway holding gold and charging transation fees, to me that is so self-defeating
<dirtywhite>
I wouldnt want my issue to crate more friction than the stellar cost of transfer
<dirtywhite>
create* more friction
<stellar-slack1>
<dzham> Well, I think their setup is a lot simpler, the ones I’ve seen are either annual storage fee (0.xx % pa), or transfer fee
<dirtywhite>
dzham, of course, I would start with just a broad rate
<stellar-slack1>
<dzham> transfer fee because demurrage has to be calculated in real time if you want to know your balance
<dirtywhite>
dzham, ahh so demurrage works, but stellar has no equivalent, right!?
<stellar-slack1>
<dzham> it kind-of works… All ripple assets has a field for the interest rate within the asset descriptor, but it’s not supported by all of the wallets I guess
<stellar-slack1>
<dzham> (actually it’s the halving, or doubling time they store)
<stellar-slack1>
<dzham> There’s no equivalent here, but as I said, you can just track it yourself instead
<dirtywhite>
demurrage is a relatively good approach
<dirtywhite>
if I wanted to offer a different, I could just re-issue
<dirtywhite>
different rate*
<stellar-slack1>
<jed> You can do demurrage in stellar in the same way it is done in ripple. It is all handled client side
<dirtywhite>
jed, awesome
<dirtywhite>
did you consider writing stellar in rust?
<dirtywhite>
the consensus is also in my view a nice component for routing network calls
<dirtywhite>
and networking kind of belongs where plan9 put it, so the consensus can eventually be tied to the kernel's network logic
<dirtywhite>
that sounds just right to me
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<stellar-slack1>
<eva> San Francisco folks, reminder to come out tonight for the SF Bitcoin Devs meetup - Prof David Mazières is presenting on SCP (Stellar Consensus Protocol) http://www.meetup.com/SF-Bitcoin-Devs/events/227871781/
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