I see. You are fighting for your right to take a cut of EVERY AND ALL tez created anywhere, regardless if those tez would be destroyed instantly right after. It is a fight for a monopoly on tez creation. LB in its current form would violate that monopoly.
How quaint.
If those two are symmetric he is not owed a cut.
If those two are not symmetric he is owed a cut.
He wants a cut, so these two are not symmetric.
Until an equilibrium is reached, the incentive to provide liquidity will be higher than the incentive to bake. That’s the point of this proposal.
Yes, anything that comes from the TEZ printing machine should go straight to bakers, so we apply baker fee. Because if is not like that, there will be a discrepancy in earnings before and after BF. Do you know what a TAX with the purpose to distribute wealth is? The TAX will happen every time something from the TEZ printing machine goes to the burning trash.
Let’s change the numbers, instead of 6% that goes from the printing machine to the trash can, why stop at 6%? Let’s increase it to 99%, so bakers can only apply baker fee to the remaining 1%. You think that would be a good idea?
I’m in a fight to not reduce bakers incentives by applying them a TAX with the purpose of redistribution of wealth. This is why 100% of what comes from the TEZ printing machine should be subject to a baker fee. Like is done now, I just want the status quo, because after LB our earnings will be reduced, this is a fact that nobody can deny, I mathematically proved it. Unless you are against mathematics. And is not a monopoly, is a governmental organization governed by 450 bakers.A monopoly would be if only the TF could decide over the printing machine.
So, Arthur is obsessed with SoV? that might be the reason he put that wealth TAX there. I agree that the only way to make is a SoV is to increase number of on-chain transactions so more fees are earned by bakers and distributed to delegators.
This, it would be disastrous to our earnings.
They would NOT BE DESTROYED, they would be distributed to all TEZ HODLERS, what part of that you can’t understand? The only coins that can be valid to destroy are those unrelated to what the bakers earn (transaction fees and block rewards).
Create a project in Tezos that burns TEZ, that would be a valid burn.
Here is a good project I mentioned a month ago, completely unrelated to block rewards and transaction fees, that burns TEZ to increase deflation.
@tezoswakenbake @AlexDurden let me thank you for laying out your positions so clearly and explicitely in those last posts. That should enable every casual observer to come to his own conclusions regarding your gripes.
I agree i was somewhat sloppy in the use of the word monopoly.I will seek to improve in the future.
Too much noice around nothing. We should focus on the biggest picture and look how we can improve LB in future proposals .
The Tezos ecosystem will benefit from LB all in all. Nothing is set in stone, we can easily change details of current implementation in future proposals.
Actual LB implementation have been discussed since months. Resources were publicly accessible and everyone could do this math. Despite this, overall consensus was very positive towards it (and still is).
A decrease in rewards for validators is “nothing” for you? You treat centralization risks too lightly. How many times it has been mentioned that LP’s would still get the subsidy regardless if the trading fee is reimbursed to bakers instead of burned? It would not affect at all the funding of LP’s.
We can progress without sacrificing bakers incentives. Bakers were fooled with this wealth tax, I hope they see this post, so they know they will need to raise baker fees due to this egalitarian measure proposed by @murbard and @sophia
With liquidity baking activated:
So what i understand from your math is.
Your earnings with current status quo are 7.35516 (this is because you process 100% of the TEZ printing machine)
Then with liquidity baking with trading fee burned you have an increase from 7.35 reward to 7.58, but bakers only processing (applying baker fee) 94% of the TEZ printing machine.
And then, with LB with trading fee reimbursed you have an increase from 7.35 reward to 7.8, but with baker processing 100% again of the TEZ that is coming out of the TEX printing machine.
So the people that say that from 7.35 TEZ to 7.58 TEZ is still an “increase” are completely ignoring the fact that the whole pie of incentives is now smaller for bakers and bigger for delegators. While the 7.8 TEZ reward (but with bakers processing again 100% of the printing machine), bakers would have the whole pie again of reward compared to when you were earning 7.35 TEZ as with the current status quo.
First, let me thank you for your patience in explaining all this.
This is utterly fascinating and i think i am getting the hang of it at last.
Alas, there is a slight problem I encountered that I hope you can help me with.
“The TAX will happen every time something from the TEZ printing machine goes to the burning trash.”
Lets take the example above:
“A. Create an extra 1,000,000 tez per block, which are immediately burned.”
If we describe a model of this in an hypothetical Tezos VM, we are only talking about the data not the history:
State at (t0) = all adresses with contracts, values… = lets bind this to a name “Data”
so its:
S(t0) = Data
S(t1) = Data , mint n Tez
S(t2) = Data , n Tez , burn n Tez
S(t3) = Data
The first thing I struggle with is that by the state of the blockchain alone nobody would be able to know that there has been any wealth TAX Distribution done since nothing has changed from t0 to t3.
So unless anybody actively searches for and finds those operations in the history at t1 and t2 nobody would ever know about this dastardly deed.
Another slight hickup seems to me that a bigger n should lead to bigger wealth distribution.
Yet we see that S(t3) does not depend in any way or form on n and is always the same.
How will those poor souls know how much wealth has been distributed away if everybody still owns exactly the same?
How would you know how much you have to raise your fees to cover your costs if you still own the exact same amount of tez that are worth the same in fiat?
Thanks in advance for your help.
The same way i did:
Do not complicate it with fiat 1 TEZ = 1 TEZ. The same way I did:
So 2.9% raise in baker fees.
You frame the liquidity baking subsidy as a tax, but in reality you see delegation fees as a tax, the subsidy as a tax loophole, and bakers as constituting a state. You are upset you cannot subtract delegation fees from the subsidy and hope to appeal to bakers as they hold the voting power for this proposal.
I have a higher view of Tezos bakers and think most likely do not see themselves as owners of a central bank-like “money printing machine”, but rather as stewards of a currency that aims to advance an ideal of stateless economic freedom that will ultimately serve their financial interest as it will draw like-minded users to the network.
Your comparisons to US economic policy belie a mindset stuck in traditional models that the general population is increasingly waking up to as failing, perhaps the prime driver of the current popularity of cryptocurrency in general. I encourage you to step back and reevaluate this.
Let’s speak the same language. If you mean delegation fees as baker fees or delegate fee, no I don’t see it as a tax, I’m not “taxing” delegators, I’m not imposing them a tax, it is a voluntary agreement between them and me, and I’m not forcing them to “pay” me (actually I’m the one that pays them) the baker fee, I’m offering them a service and a partnership, so we can find more blocks and earn more, they can leave any day of the week if they don’t like my service. There is a difference between a TAX that is imposed and a voluntary agreement.
No, I have said it multiple times, that the TAX is not the subsidy itself, you haven’t been listening at all, is converted to a WEALTH redistributive TAX once the TEZ collected by the trading fee is sent to the burning trash, IS a WEALTH redistributive TAX applied to all bakers by other bakers (the tyranny of the majority), because that should have been reimbursed to bakers.
No, not at all, bakers are a business, if we were a state, we could actually tax our delegators coercively, even if they were opposed, but the reality is that the baker fee is a VOLUNTARY AGREEMENT.
We don’t tax delegators, sorry is a voluntary agreement, you want to make it see, like if we are “taxing” and oppressing delegators for our hard work, we are not taxing them, we are not forcing them to accept the delegator fee, is all a voluntary agreement between delegators and bakers. The only ones that are FORCING bakers to redistribute block rewards income by governmental coercion are bakers to other bakers, the majority is IMPOSING over the INDIVIDUAL baker a forced redistribution income TAX. The block rewards are just a resource that is being extracted and delegators provides more work force to the business owners, so we can extract more block rewards, and the payment to delegators is agreed voluntarily through the baker fee, the baker fee is not a TAX.
That’s your view about bakers owning or not owning the printing machine, not all bakers will agree with you. That’s why your LB proposal is making bakers TAXING themselves to artificially transfer wealth to delegators. You speak of “economic freedom” yet your proposal hiddes a coercive TAX. You are in favor of robbery, if the majority agrees with the robbery, it doesn’t make it legitimate, is a legal robbery, but is NOT legitimate. IS just another expropriation by the tyranny of the majority.
And I encourage you to step back and reevaluate this robbery imposed coercive wealth TAX that your LB proposal is doing. Is a robbery, and you endorse it, you want it or not, due to this new policy, bakers incentives will be reduced, the math is clear at the beginning of this thread. We are not like the FED, i said, the FED doesn’t redistribute anything to the participants of the economy, as opposed to TEZOS that the vast majority of the printing machine is being distributed to delegators along with transaction fees. THERE’S NO NEED, for an implemented TAX in the code, we work here with voluntary agreements, you are the one working with forced TAX at code level.
@sophia really? Are you really saying that bakers tax delegators? Is really a voluntary agreement. Your TAX is not a voluntary agreement, it will be implemented in the code, even if some bakers disagree they will have to adopt it by force.
This is not governance anymore, I sign up for on-chain governance, not a democracy, where property rights are expropriated, and income sources are TAXED, democracies always fails. Democracies are the tyranny of the majority, if the majority say that TF must be expropriated and DSL too, does it make it right? Does it make it a “good governance”? No right? it does not.
@murbard and @sophia are like politicians, that are brainwashing everyone in making them believe that LB proposal is a good thing, when it is not, because it contains a hidden tax, and now you want to brainwash other bakers, to think, this is the “way forward”. And is not, not like this. LP’s could still be funded if bakers are reimbursed, and we wouldn’t have a loss in rewards. But you and Arthur are so arrogant to accept you hide that tax, maybe unintentionally, but the fact is that you did put that tax there.
Arthur was the first one that jumped, when bakers were discussing about burning the coins of the TF, for the “common good” “for decentralization”. And he started saying we will be like Zimbabwe. So when the majority wants to burn TF bakers is bad, but when the majority wants to expropriate or TAX the revenue sources to ALL bakers, is good and acceptable. Give me a break with your double morality.
And yes, I want to influence bakers that they are being fooled, because that is the whole truth. You want to influence bakers too, by telling them, that it is okay to be TAXED for NO REASON, because Liquidity could still be funded by the subsidy, if trading fee is reimbursed to bakers, so they can apply the baking fee, liquidity is funded REGARDLESS. AND YES, I’m upset because I will be TAXED along with my fellow bakers. @sophia if you want to do charity do it with your own pocket, do not want to do charity with the pockets of others, you go and buy TEZ from the exchange and send it to a burning address.
I’m still baffled that she called the baker fee a tax, when is a voluntary agreement. Shows that she knows nothing about economics, or even the concept of what is a tax, which by definition requires force. @sophia you want it or not, the wealth tax, is in the code you wrote and imposed by the vote of the majority, which will enforce it.The baker fee is not being imposed to delegators, it can’t be a tax.
LB will hurt revenue of bakers which will make it less attractive to bake. The math is clear.
But that only works if you know that it is happening, like conveniently with LB.
We were talking about proposal A of minting and then burning an arbitrary sum of tez in isolation without those tez ever interacting in any way with the rest of the system.
What if you detected a few years later that due to a bug the chain minted and then burned 10^9 tez and you were only able to pay your bills since then because you didnt know?
Wouldnt that be…awkward?
The TEZ minted it is interacting with the system, so your example of the bug doesn’t apply, the trading fee that will collect back the amount that was subsidized, is no guarantee that it will collect the whole 2.5 TEZ back, it might only collect 2 TEZ, so we are talking about a risk.
Who is running that risk? The Hodler (delegator and baker) or the baker? I argue is obviously the baker, because his incentives to maintain his baker operations are threatened, he needs to take his cut even from the losing position of the scenario of the trading fee collecting only 2 TEZ, not just distribute the 2 TEZ without his cut at a 0% baker fee.
Who takes the risk? Who allowed the TEZ printed machine to print the subsidy in the first place? Who was in possession of the 100% of the printed TEZ before Liquidity Baking? WHO?
Why the baker didn’t have that risk when he was managing the 100% of the TEZ printing machine and applying baker fees to the 100%? The answer is simple, because the one who has more to lose is the BAKER, and the one that takes the biggest risk, is the BAKER, and the one who has governmental control over the TEZ printing machine, is the BAKER, and the one who risk more from all other entities in Tezos, is the baker.
