Quote from: zebedee on September 01, 2012, 04:12:00 AM

Hi Patrick,

I realise you're getting this up and running and figuring out some things as you go along, but I have some questions. Clarity on these would be useful for all I think, including those contemplating investing in Kraken 2, as I assume it will be handled in a similar fashion.

Apologies if I've missed any of these being addressed elsewhere.

I don't think you've said it explicitly, but it seems initial investors are entitled to increase their investment up to the individual 1,000 BTC limit?
How do you handle increased deposits / withdrawals? Is everyone done at par (100 BTC) with withdrawals entitled to their final week's income if any?
What is your policy on lumpy returns? It seems unfair for someone who withdraws a week before a lumpy payout to not get any of it, but if your policy is to encourage Kraken to be held more as a long-term investment / funding commitment it makes more sense.
Are you invested in this yourself? Or is your incentive purely from the "excess returns"? Again, curious how lumpiness is handled in light of this.

Thanks.

Yes, some things come up that are unexpected, others are anticipated. I appreciate the questions.

1: Yes, initial investors are permitted to increase up to the 1000 limit - I had one user add 700 coins today bringing them up to their maximum. Initially there was scope for this to be higher, but I needed to revise that to prevent a completely unbalanced situation if someone ran a 100k passthrough. After all, the returns are allocated across units and if only 10k can usefully be put to work, the returns for the initial investors with a few hundred would be pathetic. (I did have an inquiry for a 7000 coin deposit.)

2: The accounts are all done in blocks of 100BTC. I do need to clarify the withdrawal policy because it's not a case where funds are expected to be lying around, so a simple queue will operate, or else other members of the funds might wish to take over extra units. The waitlist in the OP gives a line of people that might wish to take over a spot as well.

3: The plan is for returns to be a smooth as possible, but those in the fund currently will see that is unlikely given the current asset allocation. Therefore, there will be some back-smoothing across weeks (up to four).

4: Currently I am not directly invested. However, you will note that I am guaranteeing a minimum 100BTC price so am exposed to losses. I did buy a few of the Kraken pass through bonds on GLBSE for fun.

Kraken #2 will be different - already there are features in Kraken#1 that I would probably not repeat and there are parts to it that I think will be valuable to carry forward. Issues around size of account, risk/return structures and generating income are significant issues. Also having a clearer "investment profile" for the fund might be useful as well, allowing those after higher returns to go one direction, and those after lower risks in another. I am also aware there are competing funds that fill the needs of different parts of the bitcoin community and I do not wish to duplicate their models as that would not be good for bitcoin overall.