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Re: Non-currency asset transfers & Connector commissions

From: David Fuelling <dfuelling@sappenin.com>
Date: Sun, 19 Jun 2016 15:57:52 +0000
Message-ID: <CABq1t64FjywVT-cC_PzYT7uiE7rJXOcqUKCDCm4yUbv4NOX1-Q@mail.gmail.com>
To: Dimitri De Jonghe <dimi@bigchaindb.com>
Cc: Interledger Community Group <public-interledger@w3.org>
On Fri, Jun 17, 2016 at 1:01 PM Dimitri De Jonghe <dimi@bigchaindb.com>
wrote:

> Hi David,
>
> Sorry if this has been answered already, but can anyone clarify if ILP is
>> intended to be used for non-currency assets transfers (assuming a fungible
>> non-currency asset)?
>>
>> Great question. ILP is meant to support fungible assets indeed. At
> BigchainDB, we think of supply chains, shares, tickets, IP, licenses, and
> so on.
>
> In fact, we have a little share trading demo
> <https://github.com/bigchaindb/bigchaindb-examples#example-share-trader>
> that we would like to port into an ILP setup.
>

This is very cool - I hadn't thought of some of your other use-cases like
ticket reservations.


>
>> However, it's not clear to me how will the ILP connector "fee system"
>> would work in a case like this.  For example, imagine I want to transfer 10
>> shares of stock from one brokerage account to another.  I think I can wrap
>> my mind around how to model that in ILP, but how does the connector
>> "charge" for its services?  It seems impractical to take a percentage of
>> shares off of my transfer.  Instead, a connector would want to additionally
>> transfer some sort of currency to itself as part of the transaction to
>> "pay" for the connector usage.
>>
>
> Indeed, this has been on our minds also. I think there are few possible
> scenarios, and I can imagine our community to come up with even better ones.
> In general, one would like to see a payment receipt for the charges in
> order to transfer the shares. Hence the traders would need to connect -
> besides their shares ledger - to an ILP compatible payment ledger.
>

This is an interesting approach -- it seems like you're proposing that the
coordination of, in my example, the "share" transfer and the
"currency/commission" transfer be done outside of ILP?  Or am I mis-reading?

I was trying to think about how a sort of "commissioning" system could be
accomplished *inside* of ILP, maybe as an associated "side-car" transfer or
something like that.  So, if I transfer 10 shares of XYZ, I could also
specify an additional transfer in currency to *pay* a connector for the
share transfer (?)

Without something done *inside* of ILP, it's difficult for me to see why a
connector would fulfill an ILP transaction that they can't profit from
(i.e., a non-currency transfer), which tends to limit ILP to either systems
that coordinate commission payments independently and outside of ILP, *or*,
a global ILP system that only handles things like currencies that can be
fungibly "commissioned" by deducting a certain fee from the transfer.

I'm curious to hear any other thoughts from the community around this topic
of connector "fees."


> The payment ledger would then create an ILP fulfillment URI to fulfill the
> shares transfers that are in escrow. It's still a bit vague but it would be
> truly cool if we can spin up a demo for this. (Actually I would be
> interested in doing so on the ILP hackaton 6/july in London). I can imagine
> many more use cases that would follow such a pattern
>
>
Can you give more specifics here - I'm somewhat new to ILP, and not
familiar with the notion of a "fulfillment URI."  Is this your term, or
something from ILP?

This is only one stream of thoughts. I am sure others might be more in
> detail/efficient
>
>>
>> My read of ILP is that each transaction can only involve one "type" of
>> asset (whereas this would involve 2 types - the stock, and some currency as
>> a commission).
>>
>> Actually, we advocate that a ledger should only contain one type of
> assets.
>

I agree - it simplifies the protocol to have each ledger limited to a
single asset type.


> But ILP allows to connect homogeneous ledgers of various asset types,
> given there are suitable connectors/exchanges. The latter will be an
> interesting topic for ILP.
>

Can you elaborate more on this idea?  Is this idea to chain the share
transfer and a commission into a single ILP transaction somehow?


> Moreover, it would be interesting if there would be a formal registry of
> asset types.
>

Agree, although it seems like this might already exist for certain types
(e.g., for currencies ISO-4217 <https://en.wikipedia.org/wiki/ISO_4217>).
I suppose there must be other existing standards for various asset classes,
but it could be an interesting sub-project in the ILP work to consider
standardizing something like "classes" of asset.  For example, "currency",
"bond", "stock", "ticket", etc, and then potentially delegate to existing
standards for specific types of each class (e.g., "currency" is defined by
ISO-4217, etc).

Definitely a good question worth asking!
>
> Have a nice weekend,
>
> Dimi
>
>
Thanks for all of your input and answers -- it's a fascinating topic!



>
> Dimitri De Jonghe, PhD
> Developer
>
> +49 157 5946 2122 | Twitter <https://twitter.com/DimitriDeJonghe> |
> LinkedIn <https://www.linkedin.com/in/dimitridejonghe> | GitHub
> <https://github.com/diminator> | S <https://facebook.com/>kype:
> dimi.dejonghe
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>
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>
Received on Sunday, 19 June 2016 15:58:32 UTC

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