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@Bayesian i'm assuming this is currently going to resolve NO? i don't think anyone is pleased with a solution that satisfies all the above criteria (it'd ~basically require people to solve the problem of "managing risk" at scale)

@Ziddletwix Probably? I don't see how the idea of "back money by s&p500 index, and all shares are valued relative to that index, so holding shares for a long time makes them accrue in value over time" doesn't work

@Bayesian I'm not at all convinced by that proposal—can go into more detail if you'd like, but a few quick high level reasons (ultimately, it's your market, so if you're convinced that loans have been solved, fair enough!).

First, I don't believe for a second that Manifold would be allowed to do this. It would be an explicit pitch "don't worry about leaving your money on Manifold, because it functions like the S&P500", while presumably in the background investing that money in the S&P500 (how else would Manifold afford this). So you're pitching it as "investing in the S&P500", and you're literally investing in the S&P500, you will be regulated as such (i.e. selling securities). While lots of the sweepstakes stuff is an ambiguous grey area, that's a straightforward nonstarter. Manifold cannot do this.

This would also be extremely expensive. Compared to the current status quo (for Manifold, and also all peer sites), Manifold is suddenly on the hook for paying out ~8% interest on ~all deposits, compared to the status quo of 0%. That's an enormous hit to their margin (given that the plan is high volume and take a small fee). Yes, in theory it sounds nice that Manifold just invests the deposits in the background in the S&P500 (see: regulation issues above). In practice, that's extremely difficult/expensive to actually do. The comparison that matters here is to the current status quo—0% -> 8% on all mana invested. Manifold doesn't take in $1 for every $1 worth of mana out there—it's constantly printing mana (that's required by the sweepstakes law), & now Manifold is implicitly on the hook for paying ~8% interest on all that printed mana.

(I also don't think this would actually fix the issue people have—the hit to loans was immediate and severe, while over a month this interest would return <1% on average, and they'd barely notice the difference. But I don't think that's as relevant as the practical issues above).

So it depends on the framing of the question. If it's just about "in theory, what market dynamics make long term betting non-costly", then sure, "ok why not pay interest on all deposits" fixes it (in a trivial sense). But I don't think that version of the question is at all interesting—what matters is if there's a practical approach that Manifold has non-zero chance of implementing, and I think this approach is a total nonstarter. If others disagree, fair, and they should suggest it to James & co and see if they agree.

@Ziddletwix Yeah ig the laws seem dumb. That sweepstakes is allowed but this isn’t is strange to me. That they have to print money is strange to me. That this idea isn’t legal is a good point.

I'll nominate my "dividends=demurrage" proposal here as having appropriate characteristics of desired incentives without increasing (or decreasing) the mana supply.

@JamesBaker3 would almost nobody hold balance, and then the interest rate is super low, and then the interest rate is like 0, and then ppl don't wanna bet on long term markets? I like the idea still