Math Time!

I've been putting this off for a while, but the two of you bring up an interesting point regarding holding B.EXCH.

Ideally, it should not be profitable for people to hold B.EXCH (1 MINE and 1 SELL) long-term. The reason for this is that people could simply buy EXCH and sit on it, contributing nothing to the Derivative - it's modeled after a zero-sum game, after all.

However, if you bought B.EXCH on the first day and held it until today, you would actually show a 4.69% profit on paper.

B.EXCH Starting Price: 0.24310363

MINE Dividends Paid 1/31 - 7/21: 0.07526082
SELL Dividends Paid 1/31 - 7/21: 0.15300023
Current Buyback Value: 0.02625510

Total Divs Paid + Buyback Value = 0.25451615

There have been few, if any people, that have bought and held both MINE and SELL from the beginning, so this applies to a very select few. However, the theoretical issue remains.

The reason for this is that there are two ways to add to the NAV/U - by new shares of EXCH being sold (remember that .6% goes to the Fund) and buybacks (which are issued at 98% of the NAV/U, resulting in a 2% premium going to the fund as well).

The addition to the NAV/U, in absolute terms, was also bolstered by the large (~180 BTC) sale that was made a few months ago and then mostly bought-back, resulting in somewhere around 3.5BTC added to the fund from the new sales premium and buyback premium.

I can't change anything about the formula now, but it's something I'll consider for the next Round (whenever that is) - possibly eliminating the premium on new sales of EXCH and/or figuring out how to disincentivize buy-backs without adding to the NAV/U.

Cheers-