Yes, I meant the tez that will be burned instead to go to bakers so they can retrieve part of the fees of that 6% taken from them in the first place.
It was not taken for them, it never belonged to them in the first place.
2.5 tez are created, that affects all tez holders equally, not just bakers. The fact that they are created within a block is immaterial. Some of that may end up being recovered via fees, and the inflation can be partially neutralized by burning those.
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This Liquidity Baking thing is like a tax. But without taxes who would build the roads? This 6% tax feels like it is rather high. Maybe 3% would be more comfortable?
The more people jump to Liquidity Providing the more baking rewards bakers would receive since there would be less delegators. This will bring more money to bakers and at the same time lock more Bitcoin into Tezos which will raise the core value of Tezos. I think it is a win for everyone the question is why 6%?
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Itâs a tax for tez holders, not bakers.
100% of new minted tez doesnât have to go to bakers, itâs baking reward of up to 40 tez that goes to bakers
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There are two misconceptions here.
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That because the block reward will be, letâs say 160 per block, 100% more as it is currently now, it means there will be dilutive inflation. When you and I know this is no true, because if we print 100% more TEZ, and we distribute those TEZ to all tezos participants according to their stake (if Alice has more coins than BOB she will receive more) with a distribution fee of 0% (baker fee), they all will have the double, the coins will be worth, letâs say, half of the value as before (assuming all participants sell 50% of their stash after the 100% minting), but they will have the double of the coins. So no NET dilutive inflation there.
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That there will be some kind of dilution to delegators after the trading fee goes to bakers compared to the status quo. The current status quo is, that bakers receive 100% of the block reward and apply the baker fee to their delegators. If the trading fee of the proposal goes to bakers, then bakers will just have 100% control over the printed TEZ, same as before, then they will be able to apply baker fee to the 100% of the monetary printing, same as before. It would be exactly the same as before. The only difference is that now bakers will distribute more coins to delegators as before, but it will have the same cost to delegators after the baker fee subtraction, and therefore the same NET 0 dilutive inflation for bakers and delegators, as the status quo today. UNLESS, the trading fee doesnât manage to gather the whole TEZ that it was printed. Then there will be an effective dilutive inflation for both, bakers and delegators. But the proposal propose instead to burn 6% of the minted tezos, which will make bakers unable to apply a baker fee to that fresh minted TEZ.
We can build the roads without bakers being taxed. We provide 10% subsidy to LPs if you want, it could be higher than 6%, doesnât matter, then that loan is paid back not by LPâs, but by traders, trading the XTZ/tzBTC pair, traders pay back to us the subsidy with the trading fee. Then, if there is a loss, letâs say we get back 9% from that 10%, so 99% of the supply was recovered, there will be only 1% dilutive net inflation, and that loss will still be collectivized among all TEZ holders, because 99% of the supply creation of the coin would still be distributed by bakers to delegators with the addition that bakers will be able to apply the baking fee to 99% of supply creation, and not just to the 94%. Or if the trading fee manage to gather 11%, then that 1% profit will be also collectivized among bakers and delegators, after bakers applying the baking fee to that 101%.
So regardless, LB can still be done and viable, with bakers receiving the trading fee instead of burning it.
Is not even a TAX with the purpose to build roads, is just a tax with the purpose to redistribute part of the block rewards at 0% baking fee. The liquidity benefit is just the excuse. Iâm not opposed to liquidity baking, Iâm opposed to doing it this way.
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The hysteria of this becoming borderline ridiculous fuelled by @keefertaylor for some odd reasons.
Liquidity Baking has been discussed for months and itâs designed to be an experiment. What exactly is the risk of experimenting with this feature if it has a built in escape hatch and will sunset in 6 months?
This is a minimum viable product that can also be improved on in future proposals and add more coins like USDC.
If it works, then great, it benefits the entire Tezos ecosystem as liquidity is a major problem. If it doesnât work out, then turn it off or let it be deleted automatically with the sunset feature but itâs not worth voting down because Tezos still moves forward with faster blocks and cheaper gas.
Shouldnât Tezos have some tradeoffs and experiment with cutting edge features that can potentially benefit the entire Tezos ecosystem in a safe manner?
This is the problem with decentralization in some ways, one uniformed person with an agenda and can start claiming controversies that arenât true and try to snowball the claims.
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The hysteria has nothing to do with @keefertaylor, he raised some valid points though he shouldâve raised them months ago.
The hysteria started with a few bakers who doesnât like the decrease in their rewards from 40 tez per block to 40 tez per block
Same may be applied to you and especially the offensive tone you speak in
However I agree on experiments and tradeoffs, without it we canât win.
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And yet you are again claiming that BitcoinSuisse is the issuer in a new thread.
Edited and fixed on the other thread. Thank you for pointing that out. I admit that I misspoke.
I support the idea of competing proposals, I support a healthy debate, but it is disappointing to see you resort to lying, whatever your objective might be.
I do wish our discourse could be respectful and assume best intents on both sides and not resort to FUDing about hidden agendas or lying.
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Some points were admitted to be untrue but he still seems to keep mentioning it in other threads. What do you think that the effect of that is when a person doesnât read in depth and just accepts those points at face value?
Itâs quite simple for me, I look at what benefits the whole Tezos ecosystem and what doesnât. Same logic applies for people debating on this. Some are arguing for their own selfish needs.
I do want to take a moment to discuss this:
Itâs public information, that TF participated in the Series A of Bitcoin Suisse. Are you asking because you know or because you donât know?
No there are no conflict of interests. The tiny stake that TF has in Bitcoin Suisse, the limited role that Bitcoin Suisse has in tzBTC, the small amount of fees that may be collected as a part of this, and the limited margin on top of those fees make up for a total financial incentive on the order of the cost of a beer.
But TF also has a small stake in Taurus, so maybe two beers?
Conflicts of interest are not about dollar values. Conflicts of interest can start small and grow over time. Itâs also true that realized income is not the full picture here - Bitcoin Suisse (as a company) will become more valuable, and the ownership stake value does not necessarily increase linearly with revenue.
Based on what youâve told me:
The Tezos Foundation has stakes in those Bitcoin Suisse and Taurus. Bitcoin Suisse and Taurus will benefit (regardless of dollar amount) as a result of this protocol being adopted. The Tezos Foundation is paying the salaries of the teams building the protocol. This seems like a conflict of interest.
I think thereâs probably some other financial interests between these entities. For instance, Bitcoin Suisse also helped Tezos perform the ICO. There may be other service agreements between these two entities. Presumably, some money likely changed hands when TzBTC was developed. This level of opacity makes it really hard to have a clear picture of how money is being exchanged between these entities and whether preferential treatment is being given.
Lastly, the financial benefits in a conflict of interest donât have to be realized at the time. It might be that Bitcoin Suisse is going to knock $X off a current or future service in exchange for preferential treatment. Perhaps after preferential treatment is given, the minting fee increases. The financial benefit from this change may be small to TF, but there may be larger ones between the entities unrelated to this transaction or in the future. We really donât know unless we have a full picture of the relationship between the companies.
One way to prevent a conflict of interest from becoming corruption is to voluntarily disclose relationships and the potential for conflicts, which in my opinion, hasnât been done here (and certainly key details still seem to be missing).
It would certainly help if the foundation could identify:
- Any other existing business or service provider relationships with Bitcoin Suisse, Taurus or other memberâs of the consortium
- Times that money has changed hands between Bitcoin Suisse, Taurus or other members of the consortium
Conflicts of interest are tricky to identify and thereâs no definitive criteria, like âthis transaction is under $50 so itâs fineâ.
I will leave it to readers to decide if this particular situation seems like it is a conflict of interest, or if lack of a full picture presents the possibility of a conflict of interest. However, the argument that this is a âtwo beerâ arrangement seems like it may be an over simplification.
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Once is misspeaking. Twice is lying.
I agree that one shouldnât assume malice without direct evidence, and of course I havenât done that.
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I made a new thread discussing the economics of Liquidity Baking and I invite you all to take part.
As Keefer mentioned above he had deleted those.
Regarding benefits.
I believe that discussions like this benefit the whole ecosystem even though part of it shouldâve happened before.
It helped me learn that decision making happens off chain and the voting process is a a ratification step of developers work.
Not like it is necessarily a bad thing but I didnât know that and I bet many bakers donât. And if they did, theyâd be more active on agora.
What do you think the effect of that is when a person doesnât read in depth and just accepts that bakers vote for everything coredevs tell them.
Iâm not against I do believe that LB is a very beneficial thing overall. And I tend to agree that tzbtc is the best option at least for the next 6 months. But some bakers may disagree with me and I believe they could be given an option to vote against LB.
I think we had enough argument and itâs time to move on
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Maybe Iâm missing something here, but since the TF only exists to support Tezos, anything that TF makes on its investments in Bitcoin Suisse and Taurus gets used to the same end and not to go into someone elseâs pocket, so whatâs the conflict?
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First of all, you avoided my question. TFâs investment in Bitcoin Suisse is disclosed on its homepage and in its semi annual report. Did you know that? When you asked about conflict of interest, did you feign ignorance?
Second of all, yes they are very much about dollar value. If you donât apply some kind of de minimis threshold, then everyone would be conflicted over everyone else.
By that logic we also need to worry about future conflicts of interests. In other words you set an unattainable standard.
Bitcoin Suisse could also become less valuable.
That is far from being guaranteed at all.
TF pays grant and service agreements to various organizations who employ core developers.
TF had no involvement whatsoever in this TZIP and the choice of tzBTC. The consortium behind tzBTC is public, TF taking a stake in BitcoinSuisse and Taurus is public and indicated directly on its website and in its report. You are grasping at straws to create controversy.
Bitcoin Suisse did not help with the Tezos Foundationâs fundraiser. They participated as a syndicate of course. So what?
First of all, this proposal is not made by TF and TF had no involvement in coming up with its details, besides paying grants to people who worked on it. Second of all, comments were requested for 5 months over the choice of tzBTC. Asking for comments for half a year isnât exactly preferential treatment. You had 5 months to propose alternatives, 5 months to discuss that proposal and did nothing. Even after that, you still have the option to inject alternatives or reject the proposal outright.
It might be that BitcoinSuisse is going to knock fees if the Michelson interpreter is sped up, but I donât see you asking about that. That sounds too stupid to even consider, right? I assure you that the idea that Bitcoin Suisse somehow materially benefits from this use of tzBTC or even wants more usage is about as preposterous.
You could say this of literally any change to the protocol done by any one. Itâs impossible for any entity to operate with this level of disclosure. TF would be unable to enter any NDA, TF would be unable to have any negotiating power when signing a contract, TF would be unable to hire anyone. TF is not âthe governmentâ itâs a private entity and a wealthy patron to the ecosystem. The standard you propose simply doesnât work, it buries everything under bureaucracy.
What does work is for people to engage in healthy debate over proposals and judge them based on their merit, not on harebrained conspiracy theories about who might benefit.
It would certainly help if you disclosed your previous tax returns and bank statements for the past 10 years. I donât see how we can take your argument seriously if we donât know what might be influencing your opinion.
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What exactly is wrong with TF paying for people to build on the protocol?
That money should be used to grow the ecosystem. I wish TF spent all its money to fund development for Tezos. Itâs a huge asset for the ecosystem. How come other chains like Solana donât have a problem doing swift moves and trying new things at a faster pace.
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Because Solana is way more centralized.
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Seems to be an asset at this stage in regards to centralization. Iâm confused on why a feature that can turn off in 6 months is being argued so much.
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it can be turned off earlier if bakers decide so. still itâs being argued about because itâs a serious change.
And actually itâs more about the way itâs presented than the feature itself, no one really is against LB
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