Author [EN] [ZH] [ES] [PT] [IT] [DE] [FR] [NL] [TR] [SR] [AR] [RU] [EN] [ZH] [ES] [PT] [IT] [DE] [FR] [NL] [TR] [SR] [AR] [RU] [EN] [ZH] [ES] [PT] [IT] [DE] [FR] [NL] [TR] [SR] [AR] [RU] Topic: My problem with BitAssets... lack of price discovery  (Read 559 times)

0 Members and 1 Guest are viewing this topic.

Offline ronpaulmoneyman

  • Jr. Member
  • **
  • Posts: 21
    • View Profile
    • RonPaulMoney Site
My problem with BitAssets... lack of price discovery
« on: January 23, 2015, 08:44:16 AM »


So I am releasing a coin named RonPaulMoney. You can read about it elsewhere but it is largely a BitShares clone with a few small changes.

The problem is that all price discovery is done on centralized exchanges. There are no planned features that lead to decentralized price discovery, correct?  Price discovery is needed to launch any bitAsset.

With BitShares it fell into place but it interestingly creates a problem for other chains who would not have the political pull that a coin like Bitshares has. While I'm sure I can find some small exchange to do this after I pay them or otherwise, I would rather not put my users through the risk of some shit exchange. (Although I have not contacted BTER yet, need to have the coin released first) So what gives my coin value can't even exist _until_ it the coin is on an exchange!

Does the BTC-bitBTC gateway I see mentioned do price discovery?

Would there be a way to peg RPM to BTS by issuing a user issued asset and then have a dex using a centralized exchanger (me) who doles out an asset when people transfer their RPM to me?

Once we have a live blockchain we could use a gateway? So when my RPM wallet receives 100 RPM then they receive 100 units of a UIA which is then traded in BTS?

Much like NEMStakes but we have RPMStakes?

Is that my best bet short of a decent exchange or 2?

zerosum

  • Guest
Re: My problem with BitAssets... lack of price discovery
« Reply #1 on: January 23, 2015, 11:00:16 AM »

Interesting... When monsterer's  or some other gateway software is ready,  I say why not? What do you have to lose? I see only positives.

That being said, what you will achieve is listing RPM on a decentralized exchange but going through a centralized entity to do so. And while in this case this is probably not a big deal, because if the core devs do not serve the coin, the coin is as good as dead anyway.
What I am saying is, I might be dreaming but I wish somebody solves this, and comes with a trustless decision for cross-chain transfers. Maybe RPM is a good candidate being DPOS/BTS based?

Offline ronpaulmoneyman

  • Jr. Member
  • **
  • Posts: 21
    • View Profile
    • RonPaulMoney Site
Re: My problem with BitAssets... lack of price discovery
« Reply #2 on: January 23, 2015, 11:56:24 AM »

That is my question can you use monsterer's gateway to do price discovery? Or will it rely on prices being set in other markets and then have a percentage based fee?

I don't mind my coin being on some podunk exchange but I do not want to force my users to use said centralized podunk exchange.

Offline xeroc

  • Board Moderator
  • Hero Member
  • *****
  • Posts: 12242
  • ChainSquad GmbH
    • View Profile
    • ChainSquad GmbH
  • BTS: xeroc
  • GitHub: xeroc
Re: My problem with BitAssets... lack of price discovery
« Reply #3 on: January 23, 2015, 12:13:34 PM »
you can start trading IOUs on the BitShares network and offer a 1:1 pegged x-chain exchange to move them to your blockchain with monsterers or julians software ..
you would create an asset with max supply and issue all of them and distribute/sell them in BitShares ... once your blockchain is launched and the client goes public you can either
a) snapshot your asset on the bts blockchain and decouple it from bts
b) offer a centralized serives to exchange the IOU into the token on your blockchain
c) let other services trade the IOU against the "real" token just like BTC<->BTS using monsterer's software
Give BitShares a try! Use the http://testnet.bitshares.eu provided by http://bitshares.eu powered by ChainSquad GmbH

Online fluxer555

  • Hero Member
  • *****
  • Posts: 720
    • View Profile
Re: My problem with BitAssets... lack of price discovery
« Reply #4 on: January 23, 2015, 04:10:01 PM »
I believe bytemaster has talked about using internal IOU > BitAsset exchanges as a price feed source, and phasing out delegate-provided price feeds.

Offline toast

Re: My problem with BitAssets... lack of price discovery
« Reply #5 on: January 23, 2015, 04:42:24 PM »
If you have enough gateways you can use UIA USD vs BTS to price bitUSD. Delegates still have to write a script to filter this information to get good price information.
Do not use this post as information for making any important decisions. The only agreements I ever make are informal and non-binding. Take the same precautions as when dealing with a compromised account, scammer, sockpuppet, etc.

Offline theoretical

Re: My problem with BitAssets... lack of price discovery
« Reply #6 on: January 23, 2015, 06:53:26 PM »
The problem is that all price discovery is done on centralized exchanges. There are no planned features that lead to decentralized price discovery, correct?  Price discovery is needed to launch any bitAsset.

Shortly after the BitAsset launch, there was no price feed.  But there was an imbalance of supply and demand, everyone wanted to short.  This pushed the price of BitUSD down below real USD.

The eventual fix to this was to restrict shorts to the feed, and have shorts that would want to short below the feed compete by offering to pay interest instead.

If the demand for BitUSD exceeds the supply, (i.e. not enough people want to short), the market will blow through the short wall and start buying into shorts above the feed.  The gap between the short price and the feed is essentially a "fee" the BitUSD buyer pays to the short seller.  BitUSD buyers are incentivized to exit the market (they're getting charged more) and short sellers are incentivized to enter the market (it will be easier for them to win if they start out at an advantage to the feed), these forces will balance supply and demand.

If the supply for BitUSD is greater than demand (i.e. not enough BitUSD buyers for everyone who is shorting), the BitUSD price will move down toward the feed.  Once it reaches the feed, shorters then compete on interest rate, a "fee" the short seller is paying to long holders over time.  The shorters who are willing to accept the highest interest rates will get filled, the other shorters will drop out of the market, and again supply and demand are balanced.

Any decentralized solution will have to figure out a way to solve this problem, relieving price pressure on BitAssets when there is a supply/demand imbalance.
BTS- theoretical / PTS- PZxpdC8RqWsdU3pVJeobZY7JFKVPfNpy5z / BTC- 1NfGejohzoVGffAD1CnCRgo9vApjCU2viY / the delegate formerly known as drltc / Nothing said on these forums is intended to be legally binding / All opinions are my own unless otherwise noted / Take action due to my posts at your own risk

Offline Rune

  • Hero Member
  • *****
  • Posts: 1120
    • View Profile
Re: My problem with BitAssets... lack of price discovery
« Reply #7 on: January 23, 2015, 07:22:03 PM »
The price feeds can measure the bitasset peg and then multiply it with the internal market price. So if bitGOLD/gold = 1 then the price feed is set exactly at the internal market rate for bitGOLD/BTS. If the peg deviates then so does the price feed, ensuring that the peg is always pushed towards 1. There's no need to ever have BTS traded externally and it will likely be phased out as we get a light wallet capable of trading and better external bitasset liquidity.

Offline donkeypong

  • Hero Member
  • *****
  • Posts: 2331
    • View Profile
Re: My problem with BitAssets... lack of price discovery
« Reply #8 on: January 23, 2015, 07:33:31 PM »

So I am releasing a coin named RonPaulMoney. You can read about it elsewhere but it is largely a BitShares clone with a few small changes.

The problem is that all price discovery is done on centralized exchanges. There are no planned features that lead to decentralized price discovery, correct?  Price discovery is needed to launch any bitAsset.

With BitShares it fell into place but it interestingly creates a problem for other chains who would not have the political pull that a coin like Bitshares has. While I'm sure I can find some small exchange to do this after I pay them or otherwise, I would rather not put my users through the risk of some shit exchange. (Although I have not contacted BTER yet, need to have the coin released first) So what gives my coin value can't even exist _until_ it the coin is on an exchange!

Does the BTC-bitBTC gateway I see mentioned do price discovery?

Would there be a way to peg RPM to BTS by issuing a user issued asset and then have a dex using a centralized exchanger (me) who doles out an asset when people transfer their RPM to me?

Once we have a live blockchain we could use a gateway? So when my RPM wallet receives 100 RPM then they receive 100 units of a UIA which is then traded in BTS?

Much like NEMStakes but we have RPMStakes?

Is that my best bet short of a decent exchange or 2?

Best of luck with your coin. I hope you sharedrop to this community if you are using the BitShares technology. If you do so, you will have a ready-made community behind you to help build your coin. If not, you will not have many friends here.

Offline liondani

Re: My problem with BitAssets... lack of price discovery
« Reply #9 on: January 23, 2015, 07:45:16 PM »
are we sure we are talking with the one we are supposed too ?

ronpaulmoneyman    :-\
  https://bitshares.OPENLEDGER.info/?r=GREECE  | You are in Control | BUY | SELL | SHORT | SWAP | LOAN | TRADE |  

Offline ronpaulmoneyman

  • Jr. Member
  • **
  • Posts: 21
    • View Profile
    • RonPaulMoney Site
Re: My problem with BitAssets... lack of price discovery
« Reply #10 on: January 24, 2015, 07:46:51 AM »
If you have enough gateways you can use UIA USD vs BTS to price bitUSD. Delegates still have to write a script to filter this information to get good price information.

What do you mean "If you have enough gateways" ?

Otherwise -

My current plan is get a script setup between 2 wallets and just do a centralized cross chain trading. Since this is my coin it seems somewhat reasonable to trust me in the early days of the coin. People always have the option to not enter this market but if I was to screw it up I'd be shooting myself in the foot.

This actually solves a lot of problems at once. It gives a reason for a coin that will need too common updates to be brought into existence earlier. We're informally waiting for version 1.0 but that may not be the final answer. Regardless this lets us become liquid and do price discovery early on and avoid these questions. It also lets us co-promote BitShares DEX.

All that is needed is an asset to asset gateway bridge. I assume everyone has only written a btc-bitBTC bridge which would be easy enough to change up. I do this and I have price discovery on a liquid coin !

From there we can try to add the coin to centralized exchanges.
« Last Edit: January 24, 2015, 08:11:58 AM by ronpaulmoneyman »

 

Google+