From mboxrd@z Thu Jan 1 00:00:00 1970 Return-Path: Received: from fraxinus.osuosl.org (smtp4.osuosl.org [140.211.166.137]) by lists.linuxfoundation.org (Postfix) with ESMTP id 57574C016F for ; Tue, 21 Jul 2020 16:28:10 +0000 (UTC) Received: from localhost (localhost [127.0.0.1]) by fraxinus.osuosl.org (Postfix) with ESMTP id 462DA84DE6 for ; Tue, 21 Jul 2020 16:28:10 +0000 (UTC) X-Virus-Scanned: amavisd-new at osuosl.org Received: from fraxinus.osuosl.org ([127.0.0.1]) by localhost (.osuosl.org [127.0.0.1]) (amavisd-new, port 10024) with ESMTP id x4HY0Jh6Cbh9 for ; Tue, 21 Jul 2020 16:28:08 +0000 (UTC) X-Greylist: domain auto-whitelisted by SQLgrey-1.7.6 Received: from mail-40130.protonmail.ch (mail-40130.protonmail.ch [185.70.40.130]) by fraxinus.osuosl.org (Postfix) with ESMTPS id 4C1EA84DD4 for ; Tue, 21 Jul 2020 16:28:08 +0000 (UTC) Date: Tue, 21 Jul 2020 16:28:03 +0000 DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=protonmail.com; s=protonmail; t=1595348885; bh=2qFqVBSmJK8urLve23T0LPsBj7oqPsOk8WefMsdewe8=; h=Date:To:From:Cc:Reply-To:Subject:In-Reply-To:References:From; b=NkqfFMTHP9zsPdysjEz1lbAElzxNkoUG/0ALX2g6PHldnfEZ/arhzYOt9rFLKdKMD WX1NRsuIBZAW7H/9jf+X4GKW/7Dfrw4KclHYocy58aBQ3dRSNBVBC7EsG0Wpixc6mO GU4arVBzjcx5oMfEY4QnEPY6YyJ3cDipLcbaeRS8= To: esnierde From: ZmnSCPxj Reply-To: ZmnSCPxj Message-ID: In-Reply-To: References: MIME-Version: 1.0 Content-Type: text/plain; charset=utf-8 Content-Transfer-Encoding: quoted-printable Cc: Bitcoin Protocol Discussion Subject: Re: [bitcoin-dev] Implementing Investment Aggregation X-BeenThere: bitcoin-dev@lists.linuxfoundation.org X-Mailman-Version: 2.1.15 Precedence: list List-Id: Bitcoin Protocol Discussion List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Tue, 21 Jul 2020 16:28:10 -0000 Good morning Hilda, > Good Day ZmnSCPxj, > > Thanks for sharing the=C2=A0idea! I read through the=C2=A0doc and have so= me concerns that might be off the topic or outside the scope. Please bear w= ith me. > > The traditional banking system provides more than custodial holding of fu= nds in terms of lending & borrowing. One important function is to match lon= g term investments with short or variable term deposits. Alice might be wil= ling to make investments at time 0, but some emergency occurs and she may n= eed (part of) her bitcoins back at time 1 before the loan due=C2=A0date.= =C2=A0 This may be possible by using a Decker-Russell-Osuntokun ("eltoo") mechanis= m. The laon-payback transaction (the one that is signed with `SIGHASH_ANYPREVO= UT`) can, instead of paying out directly to the investors, pay out to a Dec= ker-Russell-Osuntokun mechanism that is signed by a MuSig of the investors = plus the coordinator. The initial state of this mechanism is the payouts of each investor, in pro= portion to the amounts they lent out. Thus, if none of the investors need to liquidate early, this initial state = is what gets posted on the blockchain ***if*** the loaning business success= fully pays back / does not default. If one of the investors needs to liquidate its position in this loan agreem= ent, the coordinator can offer to buy its position (in whole or in part) fo= r a smaller amount (as the coordinator takes on more risk). Then all the investors plus the coordinator sign a new state of the Decker-= Russell-Osuntokun mechanism, with the coordinator getting more funds, and t= he liquidating investor losing all or part of its allocation. The investor doing the liquidation can demand a pay-for-signature, so that = its signature share of the new state is only acquired by the coordinator if= and only if it actually gets paid with Bitcoins now. The position need not be bought by the coordinator --- one of the other sma= ll investors in the business can "double down" and purchase more of the sha= re of the eventual loan-payback by the same mechanism, from peer investors = who need to liquidate their position in the loan-payback early, increasing = its risk exposure but potentially getting even more profit in case the inve= sted business pays back the loan. > > Also, in the banking system, there are usually sophisticated risk analysi= s systems covering formulas, due diligence, and funds for loan defaults. Ba= nks can reinvest partial of what they namely have and obtain profits to cov= er possible losses when borrowers cannot pay back 100%. In this way, they a= re more resilient to defaults & change of collaterals' value, and borrowers= might be able to leverage 1 unit worth of collateral to get 3 units fund i= nstead of 1.=C2=A0 Similar constructions could be done by the coordinator and / or the investo= rs directly; unfortunately I know too little of them to give an idea how th= is can be done. Regards, ZmnSCPxj