New BSIP: Stop STEALTH FBA fee distribution

[abitmore]

Brief

This BSIP seeks for interest alignment between BTS token holders and STEALTH token holders, for a more integrated community and better growth of BitShares.

This BSIP seeks for an agreement between BTS token holders and STEALTH token holders, but not a decision made by BTS token holders only.

Motivation

When BSIP 8: Privacy (STEALTH) Mode was accepted, the BitShares community expected that STEALTH token holders would make use of privacy (stealth) mode to attract new users and generate more revenue for the BitShares network thus would add value to the core token of BitShares (BTS) to an extent.

However, it seems the expected benefit didn't happen (data to be added), on the contrary, BSIP 8 actually divided the community and may have negatively impacted the growth of the whole BitShares ecosystem.

According to BSIP 8, A GUI "to allow ordinary users to easily use the Privacy Mode features" is expected to be delivered by STEALTH token holders. But they failed to deliver it, although it's been more than 3 years.

The initial investor onceuponatime paid 45,000 USD to CryptoNomex for developing the GUI, in return, all STEALTH token was allocated to onceuponatime, in total 1,000,000 STEALTH. Later on 2016/04/17 00:43:33 UTC (at block number 5323913), onceuponatime transferred 800,000 STEALTH token back to dan whom was in charge of CryptoNomex. It's mentioned somewhere that CryptoNomex or dan himself refunded onceuponatime due to failed to deliver the GUI, in return, onceuponatime sent back the STEALTH token ( dan sent 6,000,000 BTS to onceuponatime on 2016-04-17 00:37 (UTC), at block number 5,323,792).

Later, on 2016/06/20 19:08:48 UTC (at block number 7176146), a company named BitShares Munich acquired 600,000 STEALTH token from dan, the company then made some efforts to advance development and marketing of the privacy (stealth) mode. However, some months later, the BitShares Munich company ran into issues and effectively became inoperational.

Now, whenever some BTS token holders suggest to use the reserve fund to develop features related to privacy (stealth) mode or to market it, some other BTS token holders argue that it's the STEALTH token holders' responsibility to do so because 80% of fees generated by privacy (stealth) mode will go to STEALTH token holders. The interest is not aligned.

Rationale

The solution proposed in this BSIP:

• Stop distributing stealth-transfer fees to STEALTH token holders after a specified time,
• as compensation, use an amount of community-owned funds to buy back STEALTH token.

The time and the amount are to be discussed / decided by the community.

After this is done, the BTS token holders would feel more engaged when working for and investing into privacy (stealth) mode.

Specification

TBD

See also

• The first worker proposal for stealth https://bitsharestalk.org/index.php/topic,20104.0.html
• The updated worker proposal for stealth (with FBA) https://bitsharestalk.org/index.php?topic=20205.0
• STEALTH Status Update (FBA installed) https://bitsharestalk.org/index.php?topic=22138.0
• The BitShares Munich issues
  • https://steemit.com/news/@kencode/chris4210-where-are-you
  • https://steemit.com/bitshares-munich/@onceuponatime/so-what-s-been-going-on-in-bitshares-munich-part-1

[xiao93]

666

[pmconrad]

According to https://steemit.com/cryptocurrency/@agorise/the-agorise-report-c-ipfs-stealth-and-blinded-transactions-pos-systems-mobile-wallets-graphenej a working GUI exists and is pending inclusion into default web wallet.
Due to lack of funding for the GUI worker it is unclear when/if this is going to happen though.

[sschiessl-bcp]

There was no attempt to get this reviewed and merged in the past (at least since I am involved). Christopher Sandborn mentioned that the current solution is slow due to the range proofs, yet I am unsure if that has been improved.

I don't know the history of it, I hope that can be clarified. Either way, private companies / entities have received funding, and those entities should return the full amounts back to the early investors if not already happened. Now STEALTH has also been traded on the open market, which is likely hard to retrace fully, such that a reimbursement for holders outside the early investors would be feasible. Committee could decide to use incoming tx fees for that.

[abitmore]

Deex has a video about stealth-related GUI, but the URL in the video doesn't work without login, so I didn't verify whether it still works.

XBTS also claimed that they has a GUI for stealth.

That said, there are people in the community to work or have worked on stealth-related GUI but know nothing about the STEALTH token. It seems unfair to split 80% of fees generated due to their work to STEALTH token holders.

[sschiessl-bcp]

Yes, I didn't say it specifically, but I am in favor of unlinking the feature from STEALTH asset.

[xeroc]

I dont real the BSIP like it wanted to REMOVE the feature but rather unlink it from STEALTH token. Thus the stealth operations would become 'regular' operations that pay to the network and the referral program only.

I welcome that decision as then people (like me, or DEEX) would have slightly more interest in building something out if that feature.

[pmconrad]

There was no attempt to get this reviewed and merged in the past (at least since I am involved).

KenCode recently brought it up on telegram, otherwise I wouldn't have been aware of it either. I haven't looked at it, but it mentions IPFS which makes me think that an approach as outlined in #91 would be preferrable.

The suggestion here is delicate, to say the least. Note that in https://bitsharestalk.org/index.php?topic=22138.0 , Dan explicitly declares "With todays hardfork and enabling of the fee-backed-asset [...] the STEALTH worker will technically be completed to spec.", which I read as "contract fulfilled". In the past 3.5 years, the community has made no significant moves to counter that claim, or to demand improvements, or to withdraw the payment (i. e. FBA functionality of STEALTH). Before a judge that would most certainly be seen as silent approval.

I fully agree that the existing stealth GUI is insufficient and needs improvement, but I do not support this BSIP for legal reasons. It would be a much better solution to keep the STEALTH an FBA and integrate the GUI as produced by KenCode.

[technologiespro]

Deex has a video about stealth-related GUI, but the URL in the video doesn't work without login, so I didn't verify whether it still works.

XBTS also claimed that they has a GUI for stealth.

That said, there are people in the community to work or have worked on stealth-related GUI but know nothing about the STEALTH token. It seems unfair to split 80% of fees generated due to their work to STEALTH token holders.

I agree with you.

The current ui XBTS is based on a Bitshares wallet ui, but we decided to develop from scratch a new advanced gui and get away from the react to more advanced frameworks.
we are currently to use the old interface, i am grateful to the old coders Bitshares-UI React for this opportunity
(in terms of user interface layer)

Our current developments
not sponsored by any community, but it's not scary
because our team are developers who believe in dex evolution and we understand that until nothing is done by each of us, there will be no growth. Therefore, we are doing everything in our power for the further evolution of dex

if the token STEALTH and additional features is in demand, we can add its functionality to our new user interface, but still a lot of work on it, the repository was transferred to private mode, because this development is carried out exclusively by our team.

we don’t plan on hoping for any workers funds, but we believe that there are still many people in the community who also think.

[technologiespro]

We tested the capabilities of IPFS for 1 year, but it was hell. Currently, we have concluded: as 1 tech candidate Zeronet is a truly stable system, although it has many shortcomings.
please think many times before using ipfs in production
(small the exception: is a start fully private separate IPFS network. may be suitable for partial tasks and may be ipfs as routing table usability)

[abitmore]

I fully agree that the existing stealth GUI is insufficient and needs improvement, but I do not support this BSIP for legal reasons. It would be a much better solution to keep the STEALTH an FBA and integrate the GUI as produced by KenCode.

This BSIP seeks for an agreement between BTS token holders and STEALTH token holders, but not a decision made by BTS token holders only. I think this would resolve potential legal issues, but IANAL. Before negotiations about the agreement, BTS token holders need to reach a consensus.

KenCode recently brought it up on telegram

@sschiessl-bcp also replied, our code base is open on Github, nothing prevents Ken from creating a pull request or even an issue for the merge, but Ken didn't respond so far (to my knowledge).

[abitmore]

Update: sorry, I saw Ken responded later, as Stefan mentioned,

Christopher Sandborn mentioned that the current solution is slow due to the range proofs, yet I am unsure if that has been improved.

Anyway, I still think it's fine to seek for an agreement.

[Agorise]

Hey guys, Ken here.

I really wish I had not given chris4210 so many of the stealth tokens I bought (with money I earned on steemit). I heard he finally liquidated Bitshares Munich on February 19th of this year. Not sure how he compensated all the Blockpay token holders though. He apparently quit on his new companies too over 4 months ago (his twitter paygerhq, payger website, payger forum, steemit payger page, etc all reflect this), and in my opinion does not deserve one cent in compensation for the stealth tokens I had to give him in the hostile takeover settlement (as advised by the attorney that onceuponatime loaned me the money for). I'm SO glad I managed to refuse their demands for my signature on a non-compete agreement.

In my opinion, Rodrigo Crespo should be compensated somehow, him and the Ambassadors at the time came on Fuzzy's radio show (Beyond Bitcoin) twice and exposed everything that happened, risking their own reputations to do so.

Anyway, it's been over 2 years now, and look who is still here releasing products, the same products I have always said I wanted to build, even when I was a voted-in Delegate in the original 101. Some people promote 20 or 30 projects, I have only ever run 4 companies in the last 27 years. I stay laser focused, and everyone here knows my heart is with Bitshares, for over 5 years now.

So, between me (bts:kencode) and the new company account I funded (bts:agorise), I am willing to sell back all of the stealth tokens for BTS if I can at least break even, and get some sort of compensation for the months that I paid Christopher Sanborn to fix the security issues with Blinded Transactions, Stealth Phase 1, and the BSIP's for Stealth Phase 2. All of that upgraded Blinded TX core code, UI/UX code, and more is on the Agorise github.

I have also open sourced 3 different mobile wallets (Bitshares wallet, Smartcoins wallet, and now BiTSy wallet), C-IPFS, C-LibP2P, the popular graphenej mobile library, the bitshares-ui for Blinded/Stealth, and the PalmPay (chris4210 got the BlockPay name from me too) point of sale systems. Releases continue to this day, even after my agreement to leave via their bitshares munich hostile takeover.

Due to lack of funds though, and of course this brutal bear market, I could not afford to continue paying Mr. Sanborn for more than a year or so, so I had to lay him off (and the c-ipfs guys (jmjatlanta and jose marcial)) until crypto prices recover. Thankfully, Mr. Sanborn is now a developer with the BitShares Core Development Team. He has a background in scientific computing and physical simulations. He holds a Ph.D. in physics too. As you can imagine, he doesn't come cheap. So, work on Stealth Phase 2 is on hold for a while longer unless someone can properly fund him.

So, to be clear, the fee disbursements to STEALTH token holders in my opinion can cease if that is what stakeholders would prefer, I just ask for some BTS compensation for what I paid in (the 600,000 mentioned), plus the extra time that was paid to Mr. Sanborn.

[jmjatlanta]

I hesitate to comment here, but I was tangentially involved while STEALTH and BitShares Munich were in turmoil.

I believe that the vast majority of participants were honourable in their intentions. Unfortunately many projects fail. I believe Ken to have a strong desire to help the community as a whole, while not tolerating what he considers unfairness. Evidence abounds to support this (i.e. his post above).

I also want what is best for the community. I do not think I need to be too involved in what it's choice is, as this community has done a good job so far in sorting it out. Yes, we're not perfect, but we've got a good thing going. Thank you @abitmore for bringing up the subject in this public forum. I hope that all participants can come to a consensus on the best way to proceed.

[ThomasFreedman]

Interesting BSIP. As one of the original people selected by onceuponatime to participate in the STEALTH management team I am well aware of the history of STEALTH, tho my memory fails me at times.

@Abimore's review in Motivation section isn't perfect but is a good overview of events.

For the record I have lost much confidence in the STEALTH effort. The hostile takeover by BItShares Munich is what split the community, and for that we can blame chris4210. Not saying kencode didn't play a role in it but it was a takeover attempt engineered by chris4210 and an outside party.

I also recently reviewed the STEALTH threads in bitsharestalk and was surprised. I first became aware of the change to revenue stream on Nov 7, 2017 Bytemaster (Dan Larimer) implemented b/c someone pointed it out to me on cryptofresh. I went to both Onceuponatime and Kencode on that same day and reported what Dan said in my Telegram DM with him about buyback. Both acknowledged that was a change they were not aware of, and I have the copies of Telegram DMs to prove it.

I was rather upset that Dan would make such a change without informing the primary investor, onceuponatime. It also impacted the value of the revenue stream in my mind as well, b/c it would now involve a whole new dynamic than an automatic and direct payout of 80% of the STEALTH use fees collected.

However, upon review of the forum I realized Ken & Once were mistaken in their conversation with me about this change. Dan first introduced the idea of a buyback scheme here, and both Once, Ken and even I made comments after that but none of us appeared to notice it. 19 pages in that forum thread, this was near midway point. Many people quoted the section referring to buyback, but they were not focusing so much on that as the mechanism for STEALTH income stream as it was for Once to recover his $45K investment. They overlap but 2 different concerns.

Nevertheless, my upset with Bytemaster was too harsh in retrospect given the topic was introduced. Discussion about trade-offs between a direct income stream for fees and how a buyback would work, including discussion of legal impact, was barely raised, and not by me, Ken or primary investor Once in those 19 forum pages. However, keep in mind there are lots of other forum discussions about STEALTH where it may have been discussed.

As for this BSIP, due to the lack of the STEALTH GUI Bytemaster was to deliver, and no others have completed or made available to BitShares community, I do not have a strong opinion of how this is settled.

[abitmore]

Some data here (as of block 40769760).

• latest trading price is 1.62 BTS/STEALTH;
• on 2016/04/17, onceuponatime exchanged 800,000 STEALTH for 6,000,000 BTS with dan, which was 7.5 BTS/STEALTH;
• the stealth-mgmt account has 3424.18833 BTS. This means during the past 3.5 years, total fee generated by stealth transactions is around 3424.18833 / 20% ~= 17K BTS;
• the stealth-buyback account has 1792.20682 STEALTH, which is the total amount that has been bought back with 60% of generated fees; average buyback price is around 3424*3/1792 ~= 5.73 BTS/STEALTH;
• the STEALTH asset has 1058.96951 STEALTH unclaimed fees and its fee pool is almost empty, the unclaimed fee was accumulated from the 0.2% market fee, as well as by selling BTS in the fee pool at CER (12 BTS/STEALTH); initially there was 2500 BTS in the fee pool, which might be bought with around 208.3 STEALTH, so total market fee is around 850 STEALTH;
• top holders (top-5 holds around 80% of total supply, top-10 holds around 90%. Although I'm not a lawyer, I guess those people can make decisions about how to proceed):

No.	Account	Balance	Order
1	bitshares-munich-wallet	290000.00000	-
2	dan	200000.00000	-
3	agorise	194962.00000	-
4	kencode	70464.00000	-
5	duck-fund	33143.50304	-
6	scarl3tt	20000.00000	-
7	kc3k4j1kyq9jw003	20000.00000	-
8	macar00ni	20000.00000	-
9	aleks	15810.90153	1350.15739
10	jogger2	14333.87220	-
11	freedom35	11177.70423	-
12	ihashfury	10031.21917	-
13	paladine1	9980.00001	-
14	mulla	8325.78686	110.00000
15	poeliepoe1	6452.55299	-
16	aleksey	4870.99997	1407.74726
17	unendlich001	3917.89700	-
18	babydragon	3598.80001	1300.00000
19	bc-godpay	2772.32729	-
20	tbone2	2563.44991	-