On the matter of Greed, or why BitDice payout structure is what it is.
We have recently seen a few topics discussing the BitDice’s dividend structure as being not truly transparent and somewhat misleading.
BitDice has never denied that its payout structure is not plain-vanilla and the multi-layering part of it is in fact designed with a special purpose in mind.
In this post, BitDice wants to reveal the reasoning behind it — i.e. why it retains 30% of the issued tokens for itself and additionally distributes 70% of the profits to public. That effectively sounds like only 49% profit will be shared. Below we attempt to explain why we have not put it as simply as “Owners get 51%, Public gets 49%”, period.
30 000 000 retained tokens will be locked up for a period of 6–12 months immediately after the distribution is ended. After that, these tokens will be used as reserve and its importance is hard to undermine. Here is why.
According to a smart-contract condition, BitDice Casino will not be able to raise any further capital with a secondary offering by creating additional tokens.
As a way for contingency planning, BitDice’s management team has realised that it needs to leave a door open for raising additional capital in case of emergency. The reserve can be sold to finance any unforeseen liabilities without disrupting the business. That in turn at some point, will left Owners with no equity at all, relying only on 30% profit retained going forward.
Should BitDice have decided to distribute all 100% of its profit to public, it would be receiving its 30% dividends as long as it holds 30% of the tokens. But as we mentioned, there is no absolute assurance that the tokens will always be on BitDice’s book, and there are risks of the tokens being sold.
Therefore the reason of having a sharing structure on both token layer and profit layer is extremely important for adequately assessing the risks related to gambling industry.
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