Imagine you held some cryptocurrency. Someone tells you that there is a way to increase the value of your coin and simultaneously accumulate more of it. An easy way. You can just stake your coins and get a passive income. Like you can have your own masternode with as little as $1. You might earn 0.01% per day, or 10%. Depends on the day. And you don't even take the value from someone else. No, you increase the value of the whole.
It sounds good doesn't it? That's the appeal of passive income. It's incredibly powerful. That's what we intend to do for Bitshares.
We will make a Worker Proposal about making liquidity bot software. There already are some alternatives, but we will provide:
When our work is done, people will find an easy to use liquidity bot with several liquidity providing strategies optimized for BitShares. The software will be especially tailored for the average user, for who anything complicated is an insurmountable obstacle. The goal is that every single user can benefit from the bot, and hence, benefit Bitshares.
Most people simply hold their coins in a wallet. When they need to exchange for something else, they look for a liquid market. On the other hand, when liquidity providers choose a market, they look for an active one. This is a chicken-egg problem.
Once our work is done, people who would otherwise just hold their coins, will have the road paved for them to provide liquidity in any market. Once people start trading in the new markets, the liquidity providers will earn the spreads. This will help bootstrap lots of new markets.
All the markets on Bitshares are incredibly shallow compared to many centralized exchanges. This situation will gradually improve, but with lots of new liquidity providers things will speed up. Time is money.
With most coins out there you can't do anything. They just lie idle in peoples wallets. With a way to make your money work for you, would you not do just that? With user friendly software anyone can put any currency to work. Compounding profits is an incredibly powerful force. We think this possibility will make Bitshares as an exchange very appealing first of all to BTS holders, but also to holders of other coins. Finally Bitshares will have what DASH and many other blockchains have; a way to stake your assets and get a passive income. Even a small income has proven to be a powerful incentive for "staking". People also don't even have to touch BTS, BTC or Fiat. They can earn a passive income of their currency of choice!
Many will wonder if providing liquidity actually yields any profit. Of course this is a very complex subject, but in general you can think of liquidity providing as the opposite of paying a premium. If you want to buy now for whatever price is available, you pay for the privilege. The ones who benefit are the ones providing liquidity. They buy low and sell high. Constantly. Many community members in Bitshares are providing liquidity to the markets, and making some nice profit. Check out the Bitshares Liquidity Group in Telegram.
We intend to start working in January.
This will be a Worker Proposal, and we want community input in order to get it right. After all, the community as a whole should benefit from this more than any individual.
The WP draft is on Google Docs. Feel free to comment and make changes. We will review them.
There is also a Telegram group dedicated to this WP.
Otherwise, just comment below and let us hear your thoughts.
