Author Topic: Changes to Cover Rules - Eliminate 5% fee  (Read 6801 times)

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Offline theoretical

I'm trying to keep up  with the bid ask rules,  We're getting an average of 1% yield right now.  There were expectations that this would be 5% floor that was the minimum.

I don't believe a rate floor was ever implemented.  The question is, what happens when the "natural" price is below +5% but the "nominal" price can't fall that low because of the rate floor?  In that case I think you'll see shorts demanding a premium above the feed in order to short.  I was going to say this would disrupt the peg, but on further consideration I think the effect would only be about one-twelfth of 5% (since shorts expire in a month and 5% is an APR).
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Offline Ander

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NuBits of course takes the crown as it is repackaged nothing with a paycoin style "floor" that is upheld by centralized anonymous counterparties.

If they implement the burning of NuBits by issuing NuShares, as proposed, then NuBits is repackaged NuShares.  (But not backed by as much collateral as BTS with our 200-300%).  Instead it would be backed by the amount of NuBits the market could bear to have dumped on it during a period of time.
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Offline Rune

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Also saying that bitassets are repackaged bitshares is totally true (it's the entire point).
Makes sense, but anyway, we're a bit off topic. Here's my question again:

Does this change increase, or decrease, the risk to "normal folks" holding BitUSD, who don't want to mess with suddenly receiving BTS in their wallet instead of BitUSD?

By making it easier to cover I'd say this decreases long term risk.

Offline speedy

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We are adding an operation that will allow you to cover a short position using the collateral at any time.  We are doing this by giving the user the ability to set the "call price" to anything higher than the "minimum call price".   This feature makes it trivial to bypass the 5% fee by slightly increasing your call price, so this makes the 5% fee impossible to enforce.

In reality the 5% fee merely served to create a variable amount of additional collateral depending upon the risk tolerance of each individual shorter.  Considering we are raising the min collateral requirement from 1.5 to 2x the added benefit of the 5% fee is insignificant.  The fear of a short squeeze and being forced to buy at up to 10% above the feed if there are not enough orders at the feed means there is still plenty of incentive to avoid forced buying.

If you set your call price at or above the price feed then your order will be matched against any and all bids up to 10% above the feed.   So be careful or you might just walk the book. 

Overall this will simplify the explanation of BitShares and shorts and remove uncertainty over how shorts and fees will be calculated.

Bytemaster so the "call price" that you set for your short order is equivalent to a Stop Loss. Can we also have a feature to add a Take Profit level to shorts as well?

Offline Chronos

Also saying that bitassets are repackaged bitshares is totally true (it's the entire point).
Makes sense, but anyway, we're a bit off topic. Here's my question again:

Does this change increase, or decrease, the risk to "normal folks" holding BitUSD, who don't want to mess with suddenly receiving BTS in their wallet instead of BitUSD?

Offline Rune

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Critics say that BitUSD is only repackaged exposure to BTS. Does this change increase, or decrease, the risk to "normal folks" holding BitUSD, who don't want to mess with suddenly receiving BTS in their wallet instead of BitUSD?

You are overstating the likelihood of this happening. Check this out: http://bitsharesblocks.com/assets/market

BitUSD is still 229% collaterlized.
I'm not overstating anything, because I'm not stating anything.  I'm asking a question.  ;D

Well, I guess I'm stating that critics say this. Here's some evidence. https://discuss.nubits.com/t/bitshares-black-swan-event-analysis-by-dan-larimer/1279/2

Quote from: a critic
when there is widespread realization that every Bitasset is just repackaged Bitshares

They are not critics, they're competitors. Everything they write regarding market pegged assets will be with the singular goal of pumping their idiotic scheme. They will not be able to ever look at market pegged assets objectively, just like we will never be able to accept any part of the fractional reserve bs they've got going as something that could ever be relied on.

Also saying that bitassets are repackaged bitshares is totally true (it's the entire point). But it's also like saying the US dollar is repackaged US government. NuBits of course takes the crown as it is repackaged nothing with a paycoin style "floor" that is upheld by centralized anonymous counterparties.

Offline jshow5555

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Critics say that BitUSD is only repackaged exposure to BTS. Does this change increase, or decrease, the risk to "normal folks" holding BitUSD, who don't want to mess with suddenly receiving BTS in their wallet instead of BitUSD?

You are overstating the likelihood of this happening. Check this out: http://bitsharesblocks.com/assets/market

BitUSD is still 229% collaterlized.
I'm not overstating anything, because I'm not stating anything.  I'm asking a question.  ;D

Well, I guess I'm stating that critics say this. Here's some evidence. https://discuss.nubits.com/t/bitshares-black-swan-event-analysis-by-dan-larimer/1279/2

Quote from: a critic
when there is widespread realization that every Bitasset is just repackaged Bitshares

I will take repackaged Bitshares over packaged air in the form of Nubits. But that's just me, you go for the vaporware if you so  like, it is a free world.

Offline Chronos

Critics say that BitUSD is only repackaged exposure to BTS. Does this change increase, or decrease, the risk to "normal folks" holding BitUSD, who don't want to mess with suddenly receiving BTS in their wallet instead of BitUSD?

You are overstating the likelihood of this happening. Check this out: http://bitsharesblocks.com/assets/market

BitUSD is still 229% collaterlized.
I'm not overstating anything, because I'm not stating anything.  I'm asking a question.  ;D

Well, I guess I'm stating that critics say this. Here's some evidence. https://discuss.nubits.com/t/bitshares-black-swan-event-analysis-by-dan-larimer/1279/2

Quote from: a critic
when there is widespread realization that every Bitasset is just repackaged Bitshares

Offline speedy

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Critics say that BitUSD is only repackaged exposure to BTS. Does this change increase, or decrease, the risk to "normal folks" holding BitUSD, who don't want to mess with suddenly receiving BTS in their wallet instead of BitUSD?

You are overstating the likelihood of this happening. Check this out: http://bitsharesblocks.com/assets/market

BitUSD is still 229% collaterlized.

Offline Chronos

Critics say that BitUSD is only repackaged exposure to BTS. Does this change increase, or decrease, the risk to "normal folks" holding BitUSD, who don't want to mess with suddenly receiving BTS in their wallet instead of BitUSD?

Offline Rune

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Can anybody link to where this 'cover with collateral' feature was suggested to be coming at all, let alone before 1.0?

Thanks.

Well if it comes in the medium term it is by definition before 1.0, since that will be the first stable release without new hard forks for an extended period of time. If we want to get exchange integration, then we need to end our hard forks and need to get stability - that's what they are waiting for.

Offline jshow5555

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Can anybody link to where this 'cover with collateral' feature was suggested to be coming at all, let alone before 1.0?

Thanks.

Offline donkeypong

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Okay I keep thinking this over and have to admit that it is a good feature and necessary to have implemented by 1.0.

I'm struggling with the recent delays and I seriously hope this will be the last new feature to get in before all resources are put on improving stability and usability. Ethereum is coming in less than 2 months.

Amen!

Offline Rune

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Okay I keep thinking this over and have to admit that it is a good feature and necessary to have implemented by 1.0.

I'm struggling with the recent delays and I seriously hope this will be the last new feature to get in before all resources are put on improving stability and usability. Ethereum is coming in less than 2 months.

Offline nomoreheroes7

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The developers who are working on these things should be working on the light, mobile and web wallets instead so that they work flawlessly and have trading engine functionality. Innovation and new features are fun, but if bitshares dies due to never getting a working product out, there'll be nothing to innovative on and make new features for.

+5%