Quote from: rbdrbd on November 23, 2013, 03:43:30 PM

Quote from: milkyman on November 23, 2013, 03:30:27 PM

I like the idea of having the remaining asset partly in msc. But I would rather aim a msc ratio of 50% instead of 80%.
Also, if the foundation buys msc over the next months and then abruptly stops, the msc value will then suddenly drop, because of a sudden drop in demand. That's why I propose a 'smooth' way to get msc into the foundation wallet - to reach the desired ratio asymptotically over a long time. I worked out a formula that could be used for that purpose:

http://imageshack.com/a/img543/7554/xry2.png

m_buy(t): number of mastercoins to be bought on that day from the distributed exchange, by selling bitcoins.
m(t): number of owned mastercoins on that day
b(t): number of owned bitcoins on that day
x(t): price of one mastercoin in bitcoins on that day
c(t): average number of mastercoins spent per day (bounties, etc.)
T: Time in days, when the desired ratio should be reached (1/e)
r: Desired mastercoin ratio of the total value.

I this way, the desired ratio will be reached exponentially.

To get a feeling of how many msc would have to be bought per day: If we choose m(today) = 0, b(today) = 5000, x(today) = 0.15, c(today) = 50, T = 365 days, r = 0.5,

m_buy(today) = 95.7

So, the foundation would have to buy back about 96 mastercoins from the distributed exchange today. Of course this number will change, as soon as the msc asset goes up, or if the prices change significantly. Everything would be transparent, and bounties etc. could be paid in mastercoins.

What do you think?

Hmm...to better help folks understand how this may look, would it be possible for you to plot a few graphs of this formula for 3 of so different scenarios over the next 12-24 months, e.g.:
* Linear MSC price rise, Bounty amount in USD stays about the same
* Exponential MSC price rise, Bounty amount in USD increases linearly
* Whatever else may make sense?

I know there are a number of variables expressed here...if you don't think it would be useful due to this, that's fine.

Sure, makes totally sense

Here are some plots:

no change in msc price:
http://imageshack.us/a/img706/4323/qpcj.jpg

linear increase of msc price:
http://imageshack.us/a/img17/1430/ucbq.jpg

exponential increase of msc price:
http://imageshack.us/a/img593/158/2t1u.jpg

exponential decrease of msc price:
http://imageshack.us/a/img42/4566/q6ix.jpg

In each case, I used the values
T = 182.5 days (1/2 year)
c = 7.5 BTC/day (daily expenses, chosen to be constant in BTC, but paid in MSC according to daily price)
r = 0.5

Each plot displays the dependence over the next 500 days (x-axis).