| Pages: [1] 2 :: one page |
| Author |
Thread Statistics | Show CCP posts - 0 post(s) |
Drythar Starthra
SWARTA
   |
Posted - 2010.03.16 02:29:00 -
[1]
So I was reading about the perpetual bond that ended up being a scam. It warmed my heart to see some of the people that this guy invested in step up and offer to help pay investors back. I began to wonder why there isn't something in place to protect investors in these situations. I'm not talking about a venture tha makes isk for anyone, I'm talking about a public service, something to help investors preyed on by these low life scammers. So I thought I'd throw and idea out there for you guys. Now this isn't something that I'm personally thinking about running, though if I had the isk I might, or I might try to give it a go in the preliminary stages. I personally have 3.5 billion liquid isk sitting around (not counting the 1 bill I'm going to pay back to raw) anyways that's irrelevant, my question is, what do you guys think about the idea? Here is sorta the business model I was thinking about..
Each Investor in a new venture (the 100m - 4/5 billion isk ventures) can deposit 30 percent of his investment into the SIF (Scam Insurance Fund) and if the bond ends up being a scam, then the fund pays back his investment in full.
So basically what I'm seeing is. Lets use my name and 4 make believe bonds.
Sexy Beast Bond - Drythar Starthra 200 million (paying an extra 60 million for insurance)
Low Down IPO - Drythar Starthra 300 million (90 million insurance)
Cross Roads LLC - Drythar Starthra 100 million (30 million insurance)
Dur Dur Dur Bond - Drythar Starthra 400 million (120 million insurance)
Sexy Beast Bond scams everyone, the SIF pays me back my 200 million isk.
Then at the end of the month, the SIF takes an assessment of payouts because of scams and legitimate bonds and pays back preminiums to investors if they overpayed what they got payed back. So it would look like this..
900 invested (200 put into insurance)
200 scammed off of me so the SIF pays me back 200m isk
So your looking at the figures and wondering why not just accept the risks without dumping the 200 into the insurance to get payed back that isk. The beauty is in the premium at the end..let me elaborate.
7.5 billion isk invested in 13 new bonds over the month of January, 2.25 billion put into the insurance fund (becuase the whole community is behind it) and 1.2 billion ends up being scams, then 1.2 billion got payed out to the investors and the other 950 million isk gets spread out proportionality to those who invested in the reassurance of the fund. So at the end of the month if I put in 200 million isk fo reveryones insurance then I get 200/7.5 bill = n/.95, which means I would have 25 million coming back to me ontop of the 200 mill that got payed back to me from the scam. Now my hopes is this extra isk would roll over and cover future scams.
Maybe use the extra isk to invest in projects that are guaranteed or something so that the interest can go into the fund. As the standing isk in the scam fund goes up, the charge to investors for insurance goes down. Soo..
People pay 2.5 billion (as a community) into the fund in january, 1.25 is scams, .95 stays in the fund for febuary.
Febuary is a slow month so people only invest 1.8 billion and 540 mill is put into the fund for insurance, no scams.
March is a busy month and 3.2 billion isk is put into the fund (4.69b sitting in fund) a 1 billion isk bond is scammed, they are payed out 1 billion isk and the balance goes down to 3.69 billion. There is a public discussion on the fund and it is decided to try lowering it down to 20 percent of investors isk.
So on and so on, it could potentially get down to the pont where you invest 100 million isk and only put 5 million isk into the bond to have that reassurance.
Thoughts? I just hate to see people get scammed out of their isk and I don't -think- anything like this has been attempted.
Jerry
Player of Drythar Starthra
|
Drythar Starthra
SWARTA
|
Posted - 2010.03.16 02:38:00 -
[2]
I was also thinking. We could use this to add another layer ontop of a bond/ipo offers other failsafes in a way. Here's what I was thinking..
Starthra Limited Bond -audited and insured-
Bond - 1 billion isk
Auditor - Lord Arbalest
Interest - 12 percent a month
Insured - I will put a Drake bpo into the SIF as insurance and partial collatoral.
Insured (scenario 2) - I'll pay 15 percent of your 30 percent insurance rate as a show of faith out of the bond.
See where I'm going with that? I'm excited about this..
|
Companion Trollin
You are going too fast
|
Posted - 2010.03.16 02:43:00 -
[3]
Can we get a tl;dr on this in like, two sentences? I'm too sober to read anything this big right now.
Also, fat chicks yo.
|
Professor Leech
Transmetropolitan
|
Posted - 2010.03.16 02:58:00 -
[4]
It's usually easy to start off discussion with a shorter OP and then introduce the other ideas. I just gave up reading and moved on.
 Originally by: Crawe DeRaven
this thread is obviously going places
|
Randall Jackson
|
Posted - 2010.03.16 02:58:00 -
[5]
A noble service. How do you stay solvent if you end up backing a ton of stinkers early on? Also, how do you determine who gets what if you have a pool of premiums and you end up having the situation where you can't support the insurance because the bonds insured stop paying? First come, first served or everyone gets a percentage of whats left?
Just devil's advocate questions. I think the idea deserves the thought for it to develop.
|
Liberty Eternal
|
Posted - 2010.03.16 03:00:00 -
[6]
Originally by: Professor Leech
It's usually easy to start off discussion with a shorter OP and then introduce the other ideas. I just gave up reading and moved on.
Basic idea; you want to invest a billion in A. So you invest a billion in A, and put an extra 300million into the insurance fund. If A scams you, you get your billion back from the fund. If someone else in the fund gets scammed, your 300 mil covers their scam loss. If no-one gets scammed, you get your 300mil back.
|
Priue Nvidess
Gallente
Amarr Engineering
|
Posted - 2010.03.16 03:03:00 -
[7]
I like this idea and would certainly support such a venture, however I have two problems that I can immediately spot. If the profit from a(n) bond/ipo is below your insurance fee, it simply isn't worth it to me to buy your insurance. Second, I now have to worry about two separate possible scams. What guarantees that you won't run off with the isk if you were to get bored with the whole concept? Additionally, if you get a reputable third person to hold everything and pay out the isk then we are talking about another person who would likely want to take a part of the insurance fund as a fee.
These aren't insurmountable problems in my mind, I just want to hear what you think on the issues.
|
Drythar Starthra
SWARTA
|
Posted - 2010.03.16 03:04:00 -
[8]
Sorry post 3 and 4, the TLDR is a service where folks put some isk into a pool and if someone is scammed, the isk is payed back out to the investors who are scammed. The more isk tha goes into the pool the less that it costs to buy the insurance. Its in the starting phase, but that's the basic jist.
To answer Randall.
Regretfully this was just an idea I had pop up while reading the MD forums, the purpose of this discussion is pretty much just to do some watercooler talk atm. I would imagine that the fund would only cover what it could pay out and try to stay solvent that way. For instance lets say I started the fund with 1 billion of my own isk and I covered a billion isk bond. Then the 300 mill that went into the fund would go toward a growth ratio to cover the next bond. I see where your points come in and thats why I wanted to discuss it.
If the fund doesn't have the isk to cover 3 bonds concurrently then why pay for the insurance if all 3 bonds default. Which is worst case scenario.
As far as who gets payed out on waht basis. If this ever got off the ground, I would want more experienced people in on it with (or maybe without) me. I just thought it was a noble idea. If you have suggestions I'm all for em and would love to just hear thoughts on this idea other hten "You dumbass, get a job and quit living ina fantasy land, no more unicorns for you" Which I expect :p
|
Professor Leech
Transmetropolitan
|
Posted - 2010.03.16 03:20:00 -
[9]
This is similar to how a number of large companies create their own private insurance entity. This can work so long as everything is balanced correctly.
Originally by: Crawe DeRaven
this thread is obviously going places
|
Randall Jackson
|
Posted - 2010.03.16 03:20:00 -
[10]
Originally by: Drythar Starthra
Edited by: Drythar Starthra on 16/03/2010 03:06:47
Sorry post 3 and 4, the TLDR is a service where folks put some isk into a pool and if someone is scammed, the isk is payed back out to the investors who are scammed. The more isk tha goes into the pool the less that it costs to buy the insurance. Its in the starting phase, but that's the basic jist.
To answer Randall.
Regretfully this was just an idea I had pop up while reading the MD forums, the purpose of this discussion is pretty much just to do some watercooler talk atm. I would imagine that the fund would only cover what it could pay out and try to stay solvent that way. For instance lets say I started the fund with 1 billion of my own isk and I covered a billion isk bond. Then the 300 mill that went into the fund would go toward a growth ratio to cover the next bond. I see where your points come in and thats why I wanted to discuss it.
If the fund doesn't have the isk to cover 3 bonds concurrently then why pay for the insurance if all 3 bonds default. Which is worst case scenario.
As far as who gets payed out on waht basis. If this ever got off the ground, I would want more experienced people in on it with (or maybe without) me. I just thought it was a noble idea. If you have suggestions I'm all for em and would love to just hear thoughts on this idea other hten "You dumbass, get a job and quit living ina fantasy land, no more unicorns for you" Which I expect :p
-edit- And Priu, also very good points. I am thinking of this as more of a service instead of a -isk generator- and if it ever got off the ground, I'd be more then happy coming up with all of the ideas (through my own thoughts and input) and handing them over to someone the forums feel more trustworthy. I'm not looking to gain anything, just contribute.
Everything starts from an idea. I'm just trying to help you keep the idea going.
I'd be interested to see if someone could set up a functioning "credit default swap" type instrument where some eyeball statistics would create a ratio of the loan that an investor could take and purchase a hedge.
Example: its XYZ Corp's 3rd loan and its for a little more isk so 90% chance they'll make payments and return the principal at the end. Randall invests 100 mil so with the new instrument he can pay 10 mil and have a guarantee that he'll get his 100 mil original investment back if the loan defaults. Otherwise, the swap issuer keeps the 10 mil and pays nothing.
Random thought for discussion.
|
Drythar Starthra
SWARTA
|
Posted - 2010.03.16 03:27:00 -
[11]
LMAO Randall great minds think alike. This is what Liberty and I where talking about (well one of many things)
Another thought was having bond and ipo runners help pay for a portion of the investors insurance policy, with people who run good ipo's/bonds getting lower rates, as well as people who invest in this fund on a regular basis getting lower and lower rates.
Also we discussed having a full insurance blanket for a bond. Where the investor, investee both pay into insurance fund and the insurance fund audits EVERYONE, including investors. That way the investee knows he's not being invested in by scammers. I definately think this would broker a good partnership with the auditors fund, to give them some solid work.
Thoughts on these new ideas? Also a cap on total possible insured for one bond, being dynamic with how much the fund has on hand.
|
Liberty Eternal
|
Posted - 2010.03.16 03:29:00 -
[12]
Edited by: Liberty Eternal on 16/03/2010 03:30:44
Had a long discussion with Drythat in-game and discussed some ideas together;
i) Auditing investors as well as investees to increase the security that an offering is not a scam
ii) Covering a fraction of the investment rather than the whole, to prevent someone being ruined by a scam
iii) Creating a pool of audited investors and audited investees who only do business with each other
(I like idea 3 the most)
iv) the investee paying into the insurance fund, albeit at a reduced rate over time
v) Standard insurance mechanisms such as reducing premiums for long-standing customers and so on
I would be prepared to offer any of these services on my next offering provided they were cost-effective and there was a genuine market demand for them.
However, the best concept I can think of is to create a pool of audited and insured investors and investees, who create a pool of audited and insured cash, which is then distributed according to credit-rating. This completely cuts out the non-audited investors and investees - almost like an insured, policed credit union.
|
Dethmourne Silvermane
Gallente
Silvermane Enterprises
|
Posted - 2010.03.16 03:42:00 -
[13]
With OP's original idea, I can see someone waiting until (amount available to repay = worth scamming) is true, and then creating a bond with primarily alts investing and then defaulting on it. Thus, they get both their original investment and the insurance.
---------------------------------
Regarding high-sec mining:
Originally by: AmarrettoDiAmarr
3-4 million ISK/hr is perhaps .15 0r .20 US$/hr; not quite prison wages and you are around less honest people. |
Randall Jackson
|
Posted - 2010.03.16 03:45:00 -
[14]
Originally by: Liberty Eternal
Edited by: Liberty Eternal on 16/03/2010 03:30:44
Had a long discussion with Drythat in-game and discussed some ideas together;
i) Auditing investors as well as investees to increase the security that an offering is not a scam
ii) Covering a fraction of the investment rather than the whole, to prevent someone being ruined by a scam
iii) Creating a pool of audited investors and audited investees who only do business with each other
(I like idea 3 the most)
iv) the investee paying into the insurance fund, albeit at a reduced rate over time
v) Standard insurance mechanisms such as reducing premiums for long-standing customers and so on
I would be prepared to offer any of these services on my next offering provided they were cost-effective and there was a genuine market demand for them.
However, the best concept I can think of is to create a pool of audited and insured investors and investees, who create a pool of audited and insured cash, which is then distributed according to credit-rating. This completely cuts out the non-audited investors and investees - almost like an insured, policed credit union.
I think creating the pool of loan seekers and IPO companies would be a great idea. If you give ratings or audit updates and police the pool of potential securities you create your own little SEC that can create some stability. Of course there would be the ability to invest in non-registered investments for those turned off by the idea. All this needs is some of the investor/investee approval to get some sort of momentum.
|
Drythar Starthra
SWARTA
|
Posted - 2010.03.16 03:54:00 -
[15]
So here's what I've gotten so far.
Scam Insurance Company, Public MD Service.
It creates a pool of investors, investee's and isk. In order to enter the pool you must be audited by the company auditor or perhaps the public auditing fund, to be announced. As you enter the pool, getting the audit lets the investors know more about who they are investing in and the invested know who are investing in them.
All bonds inside this company put up a collatoral to be held by the fund covering the insurance of the investors, if they default then this collatoral covers a portion of the defaulted amount, as well as funds payed in by investors. At the end of each month an assessment is done of each bond offerer and each investor and their rates are adjusted accordingly.
Also there will be a cap on the amount covered PER OFFERING, not per person, so that not one person or one bond can demolish the bond.
MISSION of fund, to secure a bottom floor of security for bonds, ipo's and investors. If a bond is willing to get the audit to enter the fund (and possibly regular performance audits) and put up collatoral specifically for this insurance. Then the investor is willing to come up with an audit (that there is disclosure), feel safe tha the won't get destroyed by scams and gets his isk back incase the security starts making bonds safer.
The last important quesiton.
Is there a serious interest in this kind of security?
|
Taram Caldar
Blackwater USA Inc.
Gentlemen's Club
|
Posted - 2010.03.16 04:03:00 -
[16]
Not to throw a wrench into the gearbox or anything
But what's to prevent the insurance from being a scam itself?
No offense.... but there's no such thing as safe in EVE. At least with an investment there's a chance of a ROI despite the risk of scam.... with the insurance there's no return on investment at all. What's to prevent the insurance company from raking in loads of deposits then just making off with it?
Market Alerts Mailing List
|
Drythar Starthra
SWARTA
|
Posted - 2010.03.16 04:08:00 -
[17]
As it stands, its just a thought and I'd be more then happy to stand aside and let someone who is more well known and trustworhty take over. I just want to help. I know I'm not a scammer, hell I'm willing to give out my house phone number lol, but those methods don't work. I'm open to ideas. I mean if I have a third party hold the investments and pay out, all that jive, why not have them run the thing since they are anyways? I'm not in it for the isk, I just want to help MD help itself. *shrugs* hrm, any thoughts on this delimna?
|
Liberty Eternal
|
Posted - 2010.03.16 04:31:00 -
[18]
Simplest way to prevent the insurance fund being a scam is to spread the cash out among trusted third-parties.
A second way would be to have an alternative financing model that involved no isk collection or payments, but worked through virtual credits. With this credit, the investee would be empowered to pay back a percentage of your investment to any victim on your behalf, but only if a scam occured. Thus it would be a contingency insurance, activated only if there was a scam. As the investee has to pay back the money anyway he won't care if he pays to the investor or the victim and will follow his contractual obligations.
|
Drab Cane
Carbenadium Industries
|
Posted - 2010.03.16 05:05:00 -
[19]
Now you just need to weed out the scammer customers from the honest customers.
Originally by: The Addams Family movie
Woman:[On Hallowe'en] And who are you supposed to be, dear?
Wednesday: I'm a homicidal maniac. They look like everyone else.
-----------------------------------------------
- Who Dares, Wins
|
Companion Trollin
You are going too fast
|
Posted - 2010.03.16 06:11:00 -
[20]
I think you missed the most obvious way to scam the fund, here's how:
Run an investment on an alt. Fill said investment with other alts and "insure" investment with the fund.
Money input 13 parts - 10 to you, 3 to the fund, you're now in the red 3 units.
Now announce that your investment is a scam and claim your 100% insurance payout. You receive full reimbursement from the fund, you've just scammed the fund for 70% of your original investment value.
Seriously, why do people even bother posting crap like this?
|
Cyaxares II
|
Posted - 2010.03.16 06:37:00 -
[21]
Edited by: Cyaxares II on 16/03/2010 06:37:46
30% of total investment would in many cases wipe out any profits an investor would expect to see from interest payments on legit investments and probably leave them with a net loss.
Even if the rates were better, people would only ensure ventures that are in their opinion extremely likely to be scams. In most cases these ventures will be scams.
For this scheme to work, the customer would at least have to retain ~5%/month interest (regardless if the investment ends up as a scam or not) - otherwise a fully collateralized loan will be preferred. Maybe there is a shortage of collateralized loans forcing customers into your insurance scheme but i doubt you could go lower than 3%/month.
This leaves 5-10%/month to fund the insurance (and offerings with 15%+ interest rates are not common).
A realistic example would be:
The business manager asks for 10%/month, 3 months, unsecured.
The investor would be willing to buy 5%/month, 3 months, 100% secured.
Would you be able to fund an insurance policy with the remaining 15%?
To break even this type of business should be in less than 13% of all cases be a scam (less than 11.5% if you also insure interest payments) - and that's without the insurance having to pay any administrative expenses (or making a profit).
You see where I am getting at?
|
Liberty Eternal
|
Posted - 2010.03.16 07:55:00 -
[22]
Comrade cyaxares brings up some good points, however with some work from knowledgeable insurance underwriters and some financial magic, this may stand a chance. Where there's a free market there's a way - isn't that what Lenin said, before they took his wall down? 
|
Cyaxares II
|
Posted - 2010.03.16 08:10:00 -
[23]
Originally by: Liberty Eternal
The Marxist doctrine is omnipotent because it is true - isn't that what Lenin said, before he seized power in Russia?
FTFY 
|
Liberty Eternal
|
Posted - 2010.03.16 08:15:00 -
[24]
Originally by: Cyaxares II
Originally by: Liberty Eternal
The Marxist doctrine is omnipotent because it is true - isn't that what Lenin said, before he seized power in Russia?
FTFY
Why what's this...?! We put down some Red-bait and look who walked into the trap!!?!
:cough: anyway, enough with the derailment - this isn't the Cuban rail network 
|
Companion Trollin
You are going too fast
|
Posted - 2010.03.16 08:30:00 -
[25]
Watching you two post is like watching the special olympics, no matter who wins you're both still ******ed.
|
Liberty Eternal
|
Posted - 2010.03.16 08:34:00 -
[26]
Originally by: Companion Trollin
Watching you two post is like watching the special olympics, no matter who wins you're both still ******ed.
It's good to see you appreciate the real moral lesson that the special olympics provide, Cartman. FYI, the gentlemen competing in the disabled basketball game are not mentally ******ed, they just lost the ability to walk.
Half an hour and you couldn't think of a better troll 
|
Companion Trollin
You are going too fast
|
Posted - 2010.03.16 08:43:00 -
[27]
Originally by: Liberty Eternal
Edited by: Liberty Eternal on 16/03/2010 08:36:24
Originally by: Companion Trollin
Watching you two post is like watching the special olympics, no matter who wins you're both still ******ed.
It's good to see you appreciate the real moral lesson that the special olympics provide, Cartman. FYI, the gentlemen competing in the disabled basketball game are not mentally ******ed, they just lost the ability to walk.
Half an hour and you couldn't think of a better troll
Edit: stop ruining this noble thread by trolling me
I was busy surfing **** sites, I spent about 3 seconds trolling you.
Also, on a topical note, if by noble you mean "the eyes are too close together and the speech is halting" then yes, this thread is noble.
|
Snibeecha
|
Posted - 2010.03.16 08:51:00 -
[28]
I like the idea, however it also paves the way for scammer teams. or hidden alts.
Person A opens a sizeable bond, let's say he's done some rep grinding and it's for 10 billion ISK. Then his fellow scammers/alts take 5B or indeed even the whole 10B if they just want to scam the insurance fund. They pay the insurance fee. The bond is a scam, insurance pays out to.. the scammers.
This would require some crafty masquerading, but nothing really far fetched. Counter would be to have an 'insurance auditor' decide which ventures would be covered and at what percentage. This costs time = money, so I think that ventures would have to apply to the fund for coverage, maybe even paying a fee themselves. After all, having the venture insured will be a great incentive to get investors.
Another thought, I don't think 100% insurance is feasible, but 50% or even 30% would be attractive already.
|
Bad Bobby
The Dirty Rotten Scoundrels
|
Posted - 2010.03.16 10:36:00 -
[29]
Why set up a fund to support poor investment choice?
Why set up a fund whose main beneficiary will be fools and scammers?
What incentive would there be for the intelligent investor to participate in such a venture when they only stand to lose out?
I'd rather see the fools scammed and either learn their lesson or get out of the investment game, not be pampered by a community initiative to protect them from their own foolishness.
|
Companion Trollin
You are going too fast
|
Posted - 2010.03.16 10:39:00 -
[30]
Originally by: Bad Bobby
Why set up a fund to support poor investment choice?
Why set up a fund whose main beneficiary will be fools and scammers?
What incentive would there be for the intelligent investor to participate in such a venture when they only stand to lose out?
I'd rather see the fools scammed and either learn their lesson or get out of the investment game, not be pampered by a community initiative to protect them from their own foolishness.
I'll see your cunning plan and raise you:
http://media.fukung.net/images/12993/933718555da3f009b5d05f242e18312d.gif
|
| |
|
| Pages: [1] 2 :: one page |
| First page | Previous page | Next page | Last page |