Why some people say BitUSD will vanish from the buyer's after forced cover ?

[xeroc]

Your BitUSD stays your BitUSD forever, until you put it on the market. The person who is forced to cover will buy someone elses BitUSD and burn them instead to lower the supply. In a black swan event the price will be falling so quickly that there isn't enough BitUSD on the market to cover the amount of BitUSD you originally bought from him. In that case he will buy as much as he can on the market with his collateral and burn it, and then the yield fund will burn the remaining amount. If the yield fund goes dry, BitUSD becomes undercollateralized - what that means is that all future yield will be burned until BitUSD becomes properly collateralized again.

You know if this is already implememted that way?

[Rune]

Your BitUSD stays your BitUSD forever, until you put it on the market. The person who is forced to cover will buy someone elses BitUSD and burn them instead to lower the supply. In a black swan event the price will be falling so quickly that there isn't enough BitUSD on the market to cover the amount of BitUSD you originally bought from him. In that case he will buy as much as he can on the market with his collateral and burn it, and then the yield fund will burn the remaining amount. If the yield fund goes dry, BitUSD becomes undercollateralized - what that means is that all future yield will be burned until BitUSD becomes properly collateralized again.

[zerosum]

Can you rephrase this... after all you are the self proclaimed word-master...


I believe it has something to do with the fact that covering a short sometimes results in bitUSD to be destroyed but it happens no matter if it is a forced cover or not.

https://bitsharestalk.org/index.php?topic=13355.0

I was more detailed in this thread . The question was throw out by Jordan Lee , the developer of Nubits .
And I've heard that kind of question before .
I just didn't know where it come from in the first place .

Do you mean this statement?:
I have an unrelated question about how Bitshares operates, if you will indulge my ignorance for a moment.  Let us suppose I purchase BitUSD, and then the value of BTS drops such that the party that went long BTS to create my BitUSD receives a margin call. The issuer does not meet the margin call, which I presume causes a liquidation. What happens to my BitUSD at that point?

Addressing this is the only post of yours I see. And you are correct..bitUSD is fungible so it does not matter what happened to the exact bitUSD someone sold you.

If not, Please copy the exact statement... JordanLee managed to but a lot of BS in that thread [and others in his own forum and here] so I really do not what to go through every one of those to figure out where are you coming from....

I have an unrelated question about how Bitshares operates, if you will indulge my ignorance for a moment.  Let us suppose I purchase BitUSD, and then the value of BTS drops such that the party that went long BTS to create my BitUSD receives a margin call. The issuer does not meet the margin call(My understanding: He is essentially asking what will happen to his BitUSD if the issuer wouldn't cover it and eventually forced to cover by the market ), which I presume causes a liquidation. What happens to my BitUSD at that point? (he don't understand how his BitUSD will be intact at his wallet , which I presume he thought this event will somehow destroy his BitUSD)

This kind of thinking I've seen before from other people .
Just don't know why they would think that .
Maybe something to do with the original whitepaper ?

That's hard question...I do not know why they will think that... I do not think the paper is to blame...but the reader...
speaking of readers Vitalik was lost regarding similar issues as well
but I believe in both cases it was the readers predisposition/believes 'how stuff works'

[btswildpig]

Can you rephrase this... after all you are the self proclaimed word-master...


I believe it has something to do with the fact that covering a short sometimes results in bitUSD to be destroyed but it happens no matter if it is a forced cover or not.

https://bitsharestalk.org/index.php?topic=13355.0

I was more detailed in this thread . The question was throw out by Jordan Lee , the developer of Nubits .
And I've heard that kind of question before .
I just didn't know where it come from in the first place .

Do you mean this statement?:
I have an unrelated question about how Bitshares operates, if you will indulge my ignorance for a moment.  Let us suppose I purchase BitUSD, and then the value of BTS drops such that the party that went long BTS to create my BitUSD receives a margin call. The issuer does not meet the margin call, which I presume causes a liquidation. What happens to my BitUSD at that point?

Addressing this is the only post of yours I see. And you are correct..bitUSD is fungible so it does not matter what happened to the exact bitUSD someone sold you.

If not, Please copy the exact statement... JordanLee managed to but a lot of BS in that thread [and others in his own forum and here] so I really do not what to go through every one of those to figure out where are you coming from....

I have an unrelated question about how Bitshares operates, if you will indulge my ignorance for a moment.  Let us suppose I purchase BitUSD, and then the value of BTS drops such that the party that went long BTS to create my BitUSD receives a margin call. The issuer does not meet the margin call(My understanding: He is essentially asking what will happen to his BitUSD if the issuer wouldn't cover it and eventually forced to cover by the market ), which I presume causes a liquidation. What happens to my BitUSD at that point? (he don't understand how his BitUSD will be intact at his wallet , which I presume he thought this event will somehow destroy his BitUSD)

This kind of thinking I've seen before from other people .
Just don't know why they would think that .
Maybe something to do with the original whitepaper ?

[zerosum]

Can you rephrase this... after all you are the self proclaimed word-master...


I believe it has something to do with the fact that covering a short sometimes results in bitUSD to be destroyed but it happens no matter if it is a forced cover or not.

https://bitsharestalk.org/index.php?topic=13355.0

I was more detailed in this thread . The question was throw out by Jordan Lee , the developer of Nubits .
And I've heard that kind of question before .
I just didn't know where it come from in the first place .

Do you mean this statement?:
I have an unrelated question about how Bitshares operates, if you will indulge my ignorance for a moment.  Let us suppose I purchase BitUSD, and then the value of BTS drops such that the party that went long BTS to create my BitUSD receives a margin call. The issuer does not meet the margin call, which I presume causes a liquidation. What happens to my BitUSD at that point?

Addressing this is the only post of yours I see. And you are correct..bitUSD is fungible so it does not matter what happened to the exact bitUSD someone sold you.

If not, Please copy the exact statement... JordanLee managed to but a lot of BS in that thread [and others in his own forum and here] so I really do not what to go through every one of those to figure out where are you coming from....

What he meant was that if he bought some BitUSD as a user , and the short order which created the BitUSD in the first place get forced covered , will the BitUSD he bought be destroyed from his wallet ?

NO haha
Definitely not...

After you buy you bitWhatever [bitUSD,bitGold, bitCNY]... those assets are in no way shape or for connected to whoever sold them to you....

[btswildpig]

Can you rephrase this... after all you are the self proclaimed word-master...


I believe it has something to do with the fact that covering a short sometimes results in bitUSD to be destroyed but it happens no matter if it is a forced cover or not.

https://bitsharestalk.org/index.php?topic=13355.0

I was more detailed in this thread . The question was throw out by Jordan Lee , the developer of Nubits .
And I've heard that kind of question before .
I just didn't know where it come from in the first place .

What he meant was that if he bought some BitUSD as a user , and the short order which created the BitUSD in the first place get forced covered , will the BitUSD he bought be destroyed from his wallet ?

[zerosum]

Can you rephrase this... after all you are the self proclaimed word-master...


I believe it has something to do with the fact that covering a short sometimes results in bitUSD to be destroyed but it happens no matter if it is a forced cover or not.

[toast]

I think because that's how normal CFD's work and that is the closest analogy to how bitUSD works

edit: I thought OP meant that bitUSD is replaced with BTS

it also might be because its one possibility for how to settle the market when there is *global* undercollateralization

[btswildpig]

Why some people say BitUSD will vanish from the ordinary buyer's  after the short position being forced cover ?

I heard this one before .

But from where did they get that impression ?

Something that's not clear in the original whitepaper ?