Self Directed Portfolios

Concept

Self Directed Portfolios is a concept, in which the core wallet provides the ability to create portfolios containing long positions (of cryptocurrencies). The cryptocurrencies supported by the core wallet will be voted in through the sanctuaries (through the normal proposal process). Inside the proposal we will ensure the partner currency is technically compatible (IE they have a compatible block explorer and UTXO server running, and, they are a respectable and trusted currency).

The reason we call this "Self Directed" is to conform to the Howey Test. Since one of the features will allow the user to dictate weights associated with each component of their portfolio, this empowers self directed decisions, and therefore may gain or lose capital determined by their own actions. In this way, BiblePay is not acting as a common enterprise but instead as a technical platform. User A may hold 90% XYZ + 10% BTC, while user B holds 90% BTC + 10% XYZ. Assuming XYZ had a bad year, the outcome would be entirely different for User A & B.

Your Keys, Your Coins

In this system, BiblePay will never hold any private keys, so your value will never be at risk by a common collateral agent (or liquidation script). Instead, you prove ownership of your coins by signing them, and we store the UTXO and signature in the contract, and monitor them continuously.

Spent contracts become null and void, and stop paying rewards.

Portfolio Weight Designation Page

The user will have the ability to enter into contracts that tie a crypto plus BBP together, for stake rewards. They will have the ability to choose the percentage of each cryptocurrency pair. Therefore they will be able to tailor the mix for their self directed portfolio. For example, one user may seek 50% ETHER + 40% DASH + 10% BTC, while another 90% BTC + 10% GRC, etc. Note that each individual contract is still 50% BBP + 50% Other at the time the individual contract is created, however. To create a custom portfolio, the core wallet will automatically create many contracts across different currencies.

Marketplace

One of the primary features of the SDP over the long term will be sustainability. This means deriving a revenue stream for BiblePay for its usefulness, this means charging a fee for valuable features (in contrast to emitting free coins from the coinbase).

A marketplace will exist that allows users to offer their unlocked assets to the community for a certain DWS rate (annualized), to other members.

For example, let us assume User A owns 20MM BBP, and 1000 DASH. Let us assume they do intend to create a DASH+BBP contract soon, but they know they will have an extra 10MM BBP unlocked. They can then offer 10MM BBP to the marketplace. The system will automatically assign a rate to the transaction and advertise it throughout all the wallets.

The advertising screen will look something like this:

10MM BBP JOE 10.0%

50000 DASH SUE 9.0%

400 ETH JOHN 9.5%

10 BTC ROGER 8.9%

In this case we have 5 users who have 'extra' coins to be loaned, that can be used to make a contract by any party who has the other side of it.

Note that the DWS rate offered by BiblePay Core is exactly half of the DWS rate for the combined contract. In this way, whoever decides to make a contract out of it will receive the net amount and the one who offered the coins will receive the DWS reward minus a transaction fee.

Examples

User A has 20MM BBP + 2000 DASH. This user decides to create a BBP+DASH stake with all of their assets. Instead of entering the BBP or the DASH in the marketplace, they simply enter into a DashStake contract.

User B has an extra 400 Ether. They do not wish to buy BBP on the market, but instead they wish to offer the ETH in the marketplace for borrowing. User B posts the collateral, and receives approx 9.5% for the UTXO once it enters a contract by party B.

User C has an extra 20MM BBP. User C does not wish to buy any other crypto, but wishes to receive DWS reward on the BBP. They offer the BBP in the marketplace and receive 9.5% approx. for the contract once it is taken by party B.

In this way, we have created a system that allows both staking of BBP, loaning BBP to those who need it, borrowing BBP when you do not have enough to make a contract, and creation of a marketplace where fees are split and transferred.

Future Sustainability

Although Version 1.0 is a significant leap into an operational marketplace, and allows fees to be paid and shared, it still may be improved by designing features that require the user to pay fees to offset the DWS rewards.

In version 1.0 half of the reward is subsidized by Party A who borrows a crypto to enter a contract. However we will be discussing ways to add more features that will charge fees with the goal of reducing the BBP coinbase emission to 0.

Long Term Homogenized Portfolio Position

The final outcome for the user is a Long portfolio containing Crypto Currency exposure that is custom tailored to the users own weight per currency. Another words, they will invest their own amounts into coins they trust, and combine these with either borrowed (or owned BBP) to set up a stake reward for the portfolio.

Therefore they will gain or lose not only the change in value of the underlying currencies, but also the stake rewards from the contract.

This can be seen as a financial hedge against future uncertainty. In the investment world, you have many choices including but not limited to fiat currency, bonds, stocks, real estate, and physical commodities -- among other things. Some feel that whatever the world ends up with, that there is a great risk in holding anything that gets settled to paper. And the bible says that 'their gold and silver' will not deliver them in the day of the Lord. It is up to your individual taste if you believe cryptocurrency will hedge your financial risks.