Investment fund running on Peershares. A good idea or not?

General
1

I’ve thought about starting an investment fund for a long period of time. With the advent of Peershares and inspired by some groundbreaking work by NuBits, I’ve realized that a fund could be designed in a way that would hopefully benefit the community as well as the share holders.

The investment fund would NOT be allowed to short peercoins, nubits shares or any other Peercoin based technology. The fund would be allowed to short and go long crypto currencies and technologies built on top of them. Dividends would be paid out to fund share holders and a percentage of the profit would also go to peer4commit projects, selected by share holders voting.

This means that the fund would stand to potentially benefit from rising and falling prices of other crypto currencies and some of this profit would be channeled to projects on peer4commit (Peercoin) and it would, if successful, assert some buying pressure of peercoins.

During the last few months, I’ve been writing here www.reddit.com/r/PeercoinMarkets and in the Peercoin chat here http://chatboxhistory.peercointalk.org/ detailing my way of thinking about trading. My track record, though information is scattered throughout the referenced sources, is not perfect. It is, if I may say so myself, very good. BUT even though I’m very good at these things, it could be that I’ve just been lucky. It could be that we have had an “easy market”. Past success is no guarantee for future success. When you read about prop trading, you’ll find that this kind of trading is among the hardest kind of traders one can do.

There is a real risk that if the fund I envision, blows up eventually. All money gone. Just like that. Peercoin have so far been blessed from scams and big blunders, so therefor I want to first turn to the community and ask what you all think about this kind of venture. This kind of fund could be very good for the community, but also bad if things turns sour.

This post is not about the inner working of the fund, it’s waaaay to early for that. First I’m looking for honest opinions here and constructive feedback about the very notion of such an entity existing and using Peercoin technology. I know you won’t consider “my feelings” because you guys and girl always focus on the reality of it all. And that’s a good thing.

What do you say? For or against such a fund? Should it absolutely NOT be tied to Peershares or should it, but perhaps only use the technology and be very clearly separated from the official Peercoin brand so to speak.

All comments welcome. :-*

2

I’m a real friend of putting things in a nutshell:

-all decisions will be made by you (pillow)?
-Peershares is only used for the sole purpose of distribution?
-this will not be a DAC?

Can’t wait to see this product of yours :slight_smile:

3

I think it is certainly a good thing that community members use community-developed technology to help themselves to do things. If you have knack of running investment funds, i don’t see why not using peershares if it is useful.

4

Peershares could definitely be a vehicle you could use. It’s not too complex to restructure the dividends to be issued in whatever crypto you would like to send profits out in.

One thing that I’ve also thought about, that would be really useful to a fund structure, would be to customize the Peershares offering to be able to dynamically adjust the ownership ratio when new money comes into (or moves out of) the fund. I still need to think through all of the implications of such a structure, but if it could be developed it could be used to make the fund scalable without having to withhold shares up front, for future investors.

5

I would prefer if the fund was handled by a handful of people. At least one person handling clients, one person taking care of administrative tasks and at least one handling the trading itself. Everyone in the team needs to be fully engaged and carry their own weight. In my previous attempts of launching a fund, I’ve aborted because that good people are very difficult to find.

No. I think a voting mechanism could be used for in some of the decision making (not trading operations).

No. I can’t think of a way to make it work. If someone can, I really want to know.

6

Cool. Thanks for the feedback :slight_smile:

7

Dividends will be paid out in peercoins to further the price of our beloved coin, but thanks for the tip!

I look forward to hear more of your thoughts about this. I’ve thought about instead of creating a fund, creating an investment firm. The shares would be stocks in the firm and not shares of the fund.

8

I second that project - I think it should interest people that are interested in cryptos, but dont have time and skills to research on a daily basis.
One chief condition to attract investors: transparency & accountability - namely how exactly funds are used and make profit (I guess Peershares template enables such features)

"The shares would be stocks in the firm and not shares of the fund. "

pls elaborate

9

In a fund me shares doesn’t dilute existing supply. When new money comes in, existing positions the fund has should be added to. New shares would not dilute existing supply. Much administrative work though.

The stock in a company is easier to maintain. New shares issued will dilute the supply. But the tokens would be totally fungible and tradeable on exchanges.

10

About transparency. Positions will not be advertised because the fund could be attacked. Accountability depends on whether the fund operates as a DAC or registered somewhere where doesn’t costume all the fund to do so.

11

I don’t think such a fund would cause damage to PPC/community reputation, as it would be a Pillow-run fund

I don’t agree that a slice of the profits (if any) should be given to peer4commit - that is mixing objectives

There must be a second person with powers who can replace Pillow, in the event that Pillow becomes indisposed

12

Great.

Hm, maybe you have a point. I will mull this over. Thanks for the feedback!

Yes.

13

I like the idea and would contribute. Waiting to see how it develops

14

Generally, I think it’s a good idea to try this out.

  1. Investment funds profits shall be returned to the shareholders, who then decide whether it’s necessary to donate to the peer4commit projects.
  2. To convince people to invest on your funds, maybe a past operation history should be presented.
15

So far the feedback has been constructive and generally, well if not totally, on a positive note. Since I don’t think its possible to run this thing as a DAC, the entity will have to be registered somewhere. Doing an illegal thing here is simply not an option. Everything has to be by the book. That way accountability won’t be an issue and marketing will also be much easier to do. Should it succeed, it will also be very good advertisement for Peershares.

Next thing is to find a friendly jurisdiction where this kind of fund will be possible. I don’t know anything about this. If there is anyone out there who would be willing to help out with this, all tips and help is much appreciated. Please PM if you don’t want to post in this thread. :-*

16

to ‘gamble’ with your own money is one thing,but with other peoples money is a whole another story. State of mind is different and will affect your trades. try it once with a friend and you will know what i mean… just saying

17

Pillow - I don’t see how illegality or registration comes into this. It is not a proposition to trade/invest with money, but with digital tokens. So long as everything is above board, it lies outside the law’s concern

The only time authorities need to be informed is when people cash out - if in profit, capital gains tax may apply

18

[quote=“RobertLloyd, post:17, topic:3195”]Pillow - I don’t see how illegality or registration comes into this. It is not a proposition to trade/invest with money, but with digital tokens. So long as everything is above board, it lies outside the law’s concern

The only time authorities need to be informed is when people cash out - if in profit, capital gains tax may apply[/quote]

Depends on your government’s position on crypto. If you’re Danish, alright, but some other countries (especially in the EU) take a position, where crypto is categorized “private money” or similar.

In this case, pillow would provide financial services, which are heavily regulated.

19

Very good advice! I was managing a few peoples money for a while, prop trading. Not much money (around half a million) but enough to feel the difference. My trading actually improved, because of the responsibility I felt. I’m not doing it any longer and next time, I want a team to share the workload with.

20

Pillow, I’m working through the steps required to incorporate a business on the Isle of Man right now and will be happy to share the information that I’ve accumulated. They are very friendly to digital currency businesses and their financial systems/regulations and tax schemes are all structured to be pro-business.

I’ll pull my notes together and send you the details.