The wunderbar S.MPIF

Wednesday, 23 April, Year 6 d.Tr. | Author: Mircea Popescu

Let's keep this short and sweet : S.MPIF is going to be an MPEx-listed, layered Bitcoin denominated investment vehicle.

It will work like so :

  • I will hire a number of independent managersi for specified investment fields.
  • I will allocate capital to these independent managers, according to my own judgement. I will set goals idem, and also and provide input into their general strategy. They will be responsible for execution and, oт каждого по способностям, making strategic calls.
  • Each manager will provide monthly reports of their results, and I will collate these into a monthly report published as is customary here.

This arrangement has a number of advantages, chief among which that the pooling of resources under my expert eye allows perhaps the best risk profile available for any Bitcoin financial vehicle in the history of the coin. Whether this risk profile is low enough to make the whole thing workable is not in any sense clear - it was not in the case of the MPEx CDOs, for instance (but that was a year and a half ago, and I've made changes to the model).

An actual contract will be published on MPEx soonish, and that's that.

PS. If you want to be a manager : don't call me. I'll call you.

UPDATE, 24th of April. So far there are five managers running five profit centers, as follows :

  1. BTC FX, run by BingoBoingo. So far this includes a smallish BTC/ATC operation on Apocalyptic's exchange and a somewhat larger BTC/RON operation on Naphex' exchange. The latter is structured so that no withdrawals are possible at the manager's initiative ; there are no special safeguards in place for the former.

    I will consider expansion of the venues, if reasonable. The manager does not have the authority to do this on his own. The manager does however have full authority to construct any trading strategy he deems appropriate. So far the trading strategy broadly speaking consists of trying to extract a net profit out of the wide margins of the exchanges in question, while at the same time providing regular users with some liquidity. This has been rather successful so far on BTC/ATC, it remains to be seen if BB can take his game to the next level.ii Further inquiries on his strategy, plans etc should be directed at his blog, or (if you're voiced) on irc.

  2. Fiat FX. This is conducted through kakobrekla's Panacea fund. This is an open book venture, and quite transparently managed.
  3. Dice sites. This consists of a single 50 BTC investment in just-dice. Out of the 1084 total investors it last reported, this places us around position 100. This would be mostly a passive investment, and it doesn't have (nor, in my view, need) a manager per se, other than all of dooglus' hard work.
  4. Line betting. MPOE-PR has agreed to implement on BitBet the strategy discussed earlier on irc. As per the agreement, she will split 1 BTC two ways on arbitrarily selected bets at high weight. Her original piggybank is 50 BTC, but will be expanded if needed so she doesn't have to wait for bets to close.
  5. S.MPIF liquidity. Obviously as a freely traded asset, S.MPIF may trade for values other than its calculated NAV. ThickAsThievesiii has a 50 BTC piggy bank on MPEx which he can't withdraw, but will use to try and extract a profit out of providing liquidity.iv

One of the major problems with the closure of the MPOE bot and the options book was the disappearance of the MPBOR, Bitcoin's equivalent of the LIBOR. It's my considered opinion that the S.MPIF NAIv signal can be leveraged to reconstruct, perhaps an even better equivalent. The procedure will be that each month, as part of the monthly reporting, I will include an arbitrarily set value, bound by ±(abs(NAI/NAV)).vi

S.MPIF will be using the AN0 reporting standard, of course. It will not be issuing warrants, and it will not be paying a regular dividend. It may pay a dividend during any period I determine this expedient, but there is no promise of monthly dividend (nor does such a thing make any sense whatsoever, for most companies).

Going forward, a contract will be posted on MPEx in the coming days, a report will be published before May 5th, trading will start subsequently and that'd be it.

  1. Here's an example of how this works. Here's another (Bingo eventually got that one too. Because he's on the ball like that.). []
  2. Currently reported volume is 7.95 BTC, so it should work. Also while it's true that BTC/RON is a much larger pair than BTC/ATC, he does have pretty decent hedging tools, such as for instance the X.EUR future. []
  3. Provided he agrees. If not, this will be looking for a manager. []
  4. This also works as a cash position for the fund, roughly equivalent to any Investment Bank's minimum liquidity provisions (only better). Currently out of the ~200 BTC total value so far, about 1/4 is held as cash through this system. []
  5. Net Asset Increase, defined as the difference between the current NAV and the previous reporting period NAV. []
  6. So if one month S.MPIF loses 1.35%, the MPBORv2 will be anywhere between -1.35% to 1.35%. If the following month it gains 3%, the MPBORv2 will be anywhere between -3% and 3%. The freedom is there so I can discount exceptionally stellar performance of S.MPIF, and adjust for beats that aren't necessarily market-indicative (as most beats usually aren't, contrary to the very vain tendency of your average investor to flatter himself in thinking that whenever he bleeds, the entire Universe turns red). []
Category: F.MPIF
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13 Responses

  1. Mircea Popescu`s avatar
    Mircea Popescu 
    Thursday, 24 April 2014


  2. No mining sector? :D

  3. Mircea Popescu`s avatar
    Mircea Popescu 
    Thursday, 24 April 2014

    What mining sector ?

    (Tbh appears too risky, but maybe if we get someone trustworthy doing mining at some point).

  4. >maybe if we get someone trustworthy doing mining at some point

    I wonder why it's been this long and still hasn't happened yet...

  5. The problem with (Bitcoin) mining is that you bleed the unit dry hoping for ROI and then turf it out. Pump and dump scamcoins are a lot more fun because you can hammer the GPU for 30 months and then sell it with 6 months left on the warranty:)

  6. Mircea Popescu`s avatar
    Mircea Popescu 
    Thursday, 24 April 2014

    Miners are a smelly bunch, irl too. Very apt baptising on Satoshi's part, because yeah, it works out.

  7. I think this is very interesting for poorfags (like me), as Panacea's minimum deposit is quite high.

    I'm thinking of converting my only remaining investment (Just-Dice) to it, and perhaps some PIF. Especially if the liquidity is there, as that is one of Just-Dice's main selling points.

  8. Mircea Popescu`s avatar
    Mircea Popescu 
    Friday, 25 April 2014

    O hey, the original Pif.

    Someone should somehow make Pifou.

  1. 9
    Flirting with S.MPIF (via Pingback)
    Thursday, 24 April 2014

    [...] Permalink 0 [10:38] <ThickAsThieves> to make sure i understand, the main (only?) role as MPIF mgr would be for me to post bids below nav, sells at/above nav, in order to provide liquidity. if [...]

  2. [...] the post on Trilema on this subject directs question to this here blog on what I do I will address the general concerns [...]

  3. [...] guy had been pre-announced as a manager on the wunderbar S.MPIF, which would have been, any way you look at it, a major step forward in his chosen career. Like [...]

  4. [...] together with the Qi Qr discussion above, is in fact the rationale behind the F.MPIF's 4th profit center. It's true that it happens to be underwater for now, but I would propose that has a lot more to do [...]

  5. [...] final dividend equal to the Fund's book value has been issued today. So ends "the wunderbar F.MPIF". Started in April 2014 with great enthusiasm and universal excitement at a book value of [...]

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