Market Discussions

Branding your business model as an insurance service is misleading imo.

You are borrowing money for your trading business in a way that ensures you will usually have to pay no interest at all (instead you get paid by me for taking my investment) and will face a reasonable interest rate in the rare case that one of your carefully (and with full API knowledge)-selected "insured" offerings does turn out ot be a scam (scam after 1 month: 40%, scam after 3 months: 13%, scam after 6 months: 5%, ... minus fees).

Seems more like an answer to "How do I get MD to lend me isk at a negative interest rate?" rather than "How can I effectively rate & insure uncollateralized offerings?"

(the only insurance business ventures that seemed viable so far was cosmoray's service - and nobody knows if that was real...)

If you re-read my posts, you'll notice that I'm not really criticizing roleplayers. Rather, I'm trying to gauge what this service is all about. If it's roleplay, then fine, that's perfectly valid. If it's a "super serious" thing, then I'm not sure it's viable or worthwhile as a business plan. I'm just not convinced that MD is demanding a middleman to insure investments made in bonds/IPOs. But at the same time, I'm not totally discounting that possibility. Just trying to get an angle on the RP:seriousness ratio, as it were. Trying to put us all on the same page about what it is.

In the old days, "audits" were very much Serious Business. Nobody was saying, at the time, that they were essentially roleplay, except for me and maybe a few others.


@Candy:

The details are interesting, but a little above my head to check them for problems/issues! They seem okay upon first inspection, anyway. The way I'm comprehending your plan, mentally, is that it's like old school audits + insurance, an actual business financed by real production and trading behind the scenes. Sounds good to me, especially if it's what floats your boat RP-wise. The game is about having fun and doing things the way you want to do them. I say more power to you! I definitely like this better than straight audits, anyway.

lol, thanks dude, it needs a bit of ironing though before it can go out on the town

btw, i totally got your point, about roleplaying etc lol.

My first thought on this is that rather than being a barrier to scammers, it would be a gift to them.

Scams could make your fund the victim, but that's not really the big issue because of how small the yield/loss would be. You only have to worry about short-sighted scammers there... and those are easy to catch already.

The big problem, as I see it, is that it would make it easier to carry out a pre-scam reputation grind. It would be easier to find investors due to the perceived reduction in risk provided by your fund.


I do not remember that.

Are you thinking of the MD audit fund?

That was certainly a related idea and I feel a much better one. RAW23, myself and some others set it up in order to pay auditors to audit small MD offerings.

The situation was that auditors were not being paid a worthwhile sum for their audits (and even with the fund that was not resolved), any audit fee was prohibitive to small offerings and MD investors were generally unwilling to pay for the audits themselves (even though they were the chief beneficiaries).

MD is it's own worst enemy here, it's not the number of scammers that hurts MD, it's the short sightedness and greed of MD investors that does it. I feel that this idea of yours would just feed that beast.

You may think it odd coming from someone who has scammed MD, but I was and still am an active investor here. As someone who's been involved on both sides, I can more readily see the massive potential of public investments in EVE and am acutely aware that it's the investors and not the scammers that prevent that potential from being realised.

not interested

What irks me about your proposal are

* you intend to hide part of the cost of the insurance in opportunity cost by requiring deposits.

* having a trader to leverage your working capital (which should be equity, not supplied via deposits imho - to prevent the ponzi scenario) is a good idea. But counting on a trader to pull you out of the red because you expect your risk model to fail would be bad.
Your posts sometimes make it sound as if that is what you intend to do (use a profitable trading business funded via "deposit" loans to prop up an unprofitable insurance business).

* no word about your risk model and how you arrived at the knowledge that the model proposed by you "will be profitable"

* confusion regarding who is supposed to perform due diligence and make the investment decision.
You require access to all relevant information and arrive at a decision whether to provide insurance or not (which will be read by investors as a "vouch") but refuse to have significant skin in the game.
The investor probably has access to a lot less information than you do (full API...) but is expected to bear most of the risk.
My feeling is that "I only secure 10% of your investment" makes sense when you want to be able to trust the investor's decisions without having to doublecheck them.
However, if you intend to do your own in-depth check of every offering that you might insure and have trust in your own risk model, then you should imho (and it really is an opinion) be able & willing to secure a much higher percentage of investments.

* Insurance happens only after the investment has already taken place. If it's a scam the investor (who was told he could insure his investment) is already out of money at this point, the scammer won't provide you with the required information and you have successfully dodged the bullet. If it's not a scam you earn fees and dividends on the deposit.


(The only insurance I would really consider as an investor would be an investment fund type of thing as cosmo did or pretended to run it - the insurance guy buys out an unsecured offering that is in his opinion profitable and resells it as "secure" bonds [secured by his reputation and/or by collateral he provided to a 3rd party] at a lower interest rate.
In that case the risks, costs and responsibilities are clearly assigned and the insurance guy can't avoid havinga working risk model that tells him which offerings have high interest rates relative to their risks and which ones don't.

To me your proposal sounds like a lot of "let's use cross-funding and keep the claim amounts small" voodoo to avoid having to be profitable when investing into unsecured offerings.
You come across as trying to conjure a solution to a problem that you don't have a solution for - or at least not a solution that you yourself actually have faith in - out of thin air. That doesn't work.)

This is correct, now we are actually getting somewhere, insurance after the fact, well timing is going to be a major problem where trust is concerned, and why i mentioned 3rd party micro management being a hurdle. as they pretty much wouldn't do it.



Thats an interesting one, i thought you were "not interested" lol. buying & selling debts & selling insured loans, is alot like what Grendall does now, and only really guys like that can pull off that kind of thing. Whether or not he makes a quid is another thing.

That idea is full of holes, shills you see. "Fake bonds, payments, fake collateral, list goes on"



quite the contrary, i opened a Discussion only, it is you trying to solve a problem that doesn't exist. (there is no spoon) Oh and thanks for the Critic.

pretty much.

I guess opening a 3rd party service became too obvious and screams scam nowadays, so might aswell call it "player run insurance"

(Just my 2 Cents about the service, not saying its your intention to scam)

You should make the insurance thing with a variable payout in case of scam, you calculate the variable part with a formula taking into account the risk of the bond, the name of the investor translated in binary language and the price of Sansha Electrum tag.

Ask JVL to write something for you, it will look cool and confusing at the same time. You will make a lot of isk !

cool so this is going to make a good way for investors to scam right?



right so lets see I invest in a bond which has collateral and take out insurance on that bond. so then the person scams. so collateral gets sold by 3rd party and I get my money back then you give me all my money back again because i've bought your insurance so i've doubled by money nice :D

I never said they would your the one who offered it and i might point out so very very quickly changed your orginal post to take that off once mine appeared doesnt seem such a well thought out plan now does it?