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This actually would have a lot of value, if it were executed slightly differently. Online trading markets are excellent at exposing 'insider information', but

by polemic 14y ago

This actually would have a lot of value, if it were executed slightly differently. Online trading markets are excellent at exposing 'insider information', but the prices have to be informed by (a) availability of stock and (b) the ability for traders to negotiate prices between themselves. In this instance, the valuation is based on: "...a simple formula to give each domain a daily price." So, what does this achieve? It rewards the user(s) who can best approximate the formula, gather the requisite information and act on it. In other words, the best performers are those that can best emulate the workings of the site. Ok, it is called "LinkDAQ" for a reason - but there is an opportunity here to build something linked to real value. It would be better to seed initial stock values from such a formula, but then leave users to trade between them. Stocks "cash out" during [real] funding rounds, dividend payouts or difference in actual stock valuations. If you can refine the market sufficiently, you should have a reasonably informative prediction engine. I've been a long time user of the iPredict prediction market in NZ (ipredict.co.nz) - but that's small biscuits next to InTrade, for example.

alexirobbins 14y ago
Do you think it would make sense to issue X shares for each site, and then split the shares at Y value? And in real stock exchanges, companies issue shares of the company, so they have real value. InTrade links its share value to the likelihood of something happening - but the goals of websites/startups vary greatly, so it's difficult to set a fixed standard that way. You might also be able to set up a market in which shares only have value because of scarcity, but I think it would be difficult to convince people to buy them in the first place, which is why starting with funny money might actually be a good move in trying to establish this sort of market. And should sites be allowed to apply for the exchange? Do you think you could allow the companies that own these sites to sell actual shares to accredited investors using a Funders Club model?
- polemic 14y ago
  Could do. The biggest problem with the whole thing is, you really need to link the stock price to cash, and that makes it a futures market, with all the regulation it comes with. If it were bitcoin based tho....
ljd 14y ago
If you want another way to attack the price problem, you can always emulate real markets. In this position you are the market but you are also the IPO underwriter for each stock. You should pick a certain level of stock, it can all be equal, say 1,000,000 shares for every company and use a limited supply strategy to sell stock in all 50k companies over a certain period of time, say 30 days. This would seed your market. The in-demand stocks will rise quickly with the limited supply strategy and lesser demanded stocks will drop to be penny stocks. It'll probably be 80/20 where 80% are worth pennies. Once you have offloaded your entire inventory now you just allow others to trade between themselves and you are done. The market will correct your approximations in short order. If you are looking for a pricing engine to handle the limited supply strategy, send me an email. Given that this is all funny money I'll just let you use our REST API for the pricing.
karstenw 14y ago
Maybe the simple formula takes into account the buyers/sellers on LinkDAQ?

by polemic 14y ago

alexirobbins 14y ago

Do you think it would make sense to issue X shares for each site, and then split the shares at Y value? And in real stock exchanges, companies issue shares of the company, so they have real value. InTrade links its share value to the likelihood of something happening - but the goals of websites/startups vary greatly, so it's difficult to set a fixed standard that way. You might also be able to set up a market in which shares only have value because of scarcity, but I think it would be difficult to convince people to buy them in the first place, which is why starting with funny money might actually be a good move in trying to establish this sort of market. And should sites be allowed to apply for the exchange? Do you think you could allow the companies that own these sites to sell actual shares to accredited investors using a Funders Club model?

polemic 14y ago
Could do. The biggest problem with the whole thing is, you really need to link the stock price to cash, and that makes it a futures market, with all the regulation it comes with. If it were bitcoin based tho....

ljd 14y ago

If you want another way to attack the price problem, you can always emulate real markets. In this position you are the market but you are also the IPO underwriter for each stock. You should pick a certain level of stock, it can all be equal, say 1,000,000 shares for every company and use a limited supply strategy to sell stock in all 50k companies over a certain period of time, say 30 days. This would seed your market. The in-demand stocks will rise quickly with the limited supply strategy and lesser demanded stocks will drop to be penny stocks. It'll probably be 80/20 where 80% are worth pennies. Once you have offloaded your entire inventory now you just allow others to trade between themselves and you are done. The market will correct your approximations in short order. If you are looking for a pricing engine to handle the limited supply strategy, send me an email. Given that this is all funny money I'll just let you use our REST API for the pricing.

karstenw 14y ago

Maybe the simple formula takes into account the buyers/sellers on LinkDAQ?