Is it concerning that the Profit/Expenses from the Bitshares Reserve Pool is typically negative? Does that mean that Bitshares is running at a loss and could become unstable financially?
You are viewing a single comment's thread from:
Is it concerning that the Profit/Expenses from the Bitshares Reserve Pool is typically negative? Does that mean that Bitshares is running at a loss and could become unstable financially?
Great question and sorry for the delayed response; i hope this finds you well..
Bitshares as an evolving platform is reinvesting in it own development with the funding of worker proposals. The chart is actually slightly deceiving as for the last 6 months or so worker proposals have been being paid with Smartcoin via the multisig escrow mechanism. What this means is that more than the required amount of BTS is being managed by the multisig escrow which is using the BTS it receives to buy or create smartcoin for payment of the workers. This helps the ecosystem as well as shareholders and workers as the payment for worker proposals is a stable rate and does not fluctuate with the value of BTS.
The Multisig escrow burns the excess BTS back into the reserve pool after some time; this can be seen as the massive spike of profitability on the same chart that seen 6.5 Million BTS being returned to the reserve pool. As such this chart is not as informative as it once was and would require further analysis to determine if our income (fees) are more than out expenses (witnesses and worker proposals).
I would be pretty confident that if we were to halt all active development we would be instantly profitable, but the net benefits of the development and work being preformed is far greater in the long run.
While on this topic; consider the effects once Bitshares is running at a profit; Bitshares will become a deflationary currency as the circulating supply would be reduce W/W at the same time as our warchest for investment would be growing. not to mention a raising price helps collateral ratios of the smartcoins thus promoting further growth and more utility.
awesome reply, thank you.
i real need some simply explanation on bitshare
It's supposed to be Bitcoin re-imagined as an actual profitable entity. So far, Bitshares is significantly more profitable than Bitcoin but yet still not making an actual profit.
I agree that Bitshares should be making profit. Lord knows Bitfinex is.