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Offline Rune

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[ANN] Cryptohedge Financial Services soft launch
« on: February 01, 2015, 02:54:43 AM »



Cryptohedge Financial Services soft launch announcement

Cryptohedge.io

Dear friends,

For the past few weeks Riverhead and I have been working off the trading bot system that Toast developed to create an economic framework for large scale BitAsset/bitcoin market making. The result is Cryptohedge, a DAC that uses BitShares UIA's to raise funds for market making operations from the BitShares and bitcoin community in the form of low risk, steady reward investment instruments called CFSassets.

The idea is simple: We sell a CFSasset for each of the BitAssets that we do bitcoin market making for, and then our bots use these funds for high-volume market making while automatically hedging all exposure they have to bitcoin in order to minimize risk. This ensures that there is no volatility risk and the spread our bots take can thus be set very low, driving more volume to the BitAsset markets they operate in. Our first CFSasset, CFSGOLD, will initially be set for sale at the price of 1 BitGold per CFSGOLD, giving it a NAV of 1. Over time as the bots generate income from the spread this NAV will increase, but our hedging system is meant to ensure that it will not be able to decrease since all trades will be done at a 1 to 2% spread and gold exposure will always be close to 100%. Funders will be rewarded through the mechanism described in the CFSGOLD prospectus linked below.

Pooling our funds this way will enable our community to work together to produce the same kind of massive buy and sell walls that nubits has used to gain their huge volume over the past several months. The main difference is that our volume is actually done with a sound, collateralized asset, and we've also decided to focus on gold at first, since this is an asset that is not currently represented on any bitcoin exchanges and will be highly sought after if it can be made liquid, since almost everyone who's into bitcoin also loves gold. Because gold hedging is a valuable service that many exchanges will understand their clients demand, it's likely that we can negotiate highly favorable market making discounts if we can accomodate gold hedging at high volume. This is another advantage of pooling our funds for market making.

Currently there are still no exchanges that have implemented bitgold/BTC and our first offering of CFSGOLD is just a small amount (10 CFSGOLD sold for 1 BitGold each)to test the funding system and allow us to put up walls the second an exchange integrates BitGold. Our goal will then be to get every exchange that currently supports a BTS trading pair to also implement BitGold/BTC and BitUSD/BTC. We will then use the BitGold volume that we create on these altcoin exchanges to incentivize larger bitcoin exchanges to integrate BitGold.

It's about time that bitshares starts getting the attention it deserves, and we are going to force bitassets into the spotlight by making them the most highly traded cryptocurrency token second to bitcoin, through large amounts of capital, the tightest possible spread, and sheer force of will as we approach every single exchange in existence and makes sure they know why they NEED to implement bitasset trading pairs in order to stay competetive in the business.

Moy Hau is our exchange relations guy, he has worked for several chinese exchanges and has personal connections to the management at several top chinese exchanges and has already seen positive interest from huobi and ANX regarding the demand for bitcoin to gold hedging. We haven't actually pitched our service to the big players yet because we want it to be established with high volume on the altcoin exchanges first, but our medium term goal is to see bitgold traded for bitcoin on the largest bitcoin exchanges, next to CNY and USD.

You can see our HedgeBot in action market making BTC/BitUSD on bter here: https://bter.com/trade/btc_bitusd The volume is relatively low because of competition by nubits, but the spread we offer is similar to theirs.

To learn more about Cryptohedge you can read the business case:

CFS business case

To learn more about CFSGOLD, its withdrawal system and its early funder perks, read the prospectus:

CFSGOLD prospectus

To see our exchange pitch check out our exchange integration reference document:

High volume bitcoin to gold hedging

If you want to become a CFS funder and help make BitAsset liquidity explode while earning a steady return with low risk, then you can buy CFSGOLD right now directly from the decentralized exchange (unless it has sold out). The open sell orders can be found by searching for CFSGOLD:bitGOLD on the "market" page in the GUI.

Since the BitGold market still isn't liquid, the only way you can obtain bitgold at this point is by shorting it to yourself. It's a bit difficult to do, but doesn't put you at any risk and your total exposure to bitshares and gold remains the same (since you both short and go long gold). To do it, you have to go into the market page, find bitgold:BTS and then click on the SHORT tab. Here you have to check the box that says "short mode", and once you've done that you need to specify the quantity you want to short while putting price limit and interest rate to 0. Then you execute the order like a normal order, and will see it show up on the books. As soon as the order shows up on the order book, you go to the BUY tab and click on the new short order that you just created in order to have the client automatically fill out the buy information so you can buy into your own order. Once you've done this you will have bought your own short, and will now posses the amount of bitgold you shorted while having 3x that amount worth of BTS tied up as collateral. Your total exposure to BTS remains the same as before, and your exposure to gold will stay at 0 as long as you keep your bitgold, or use it to buy into CFSGOLD. We will do full buybacks with all our bitgold every week in the beginning of our operations (as described in the CFSGOLD prospectus), so you will always be able to get your bitgold back in time to cover your own short. If you need any assistance with covering your short I will always be happy to help and will make sure no one gets a forced cover after the 30 day time limit runs out.
« Last Edit: February 01, 2015, 10:30:22 AM by Rune »

Offline Method-X

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Re: [ANN] Cryptohedge Financial Services soft launch
« Reply #1 on: February 01, 2015, 03:38:04 AM »
 +5% This is a fantastic idea Rune.

Offline onceuponatime

Re: [ANN] Cryptohedge Financial Services soft launch
« Reply #2 on: February 01, 2015, 03:56:48 AM »
Nothing shows up when I search CFSGOLD in the GUI at the Market page.

And when I search bitGold, I get a list of trading pairs but bitGOLD:CFSGOLD  isn't one of them.

Offline edilliam

Re: [ANN] Cryptohedge Financial Services soft launch
« Reply #3 on: February 01, 2015, 04:22:04 AM »
Great initiative guys  +5%

Offline Riverhead

Re: [ANN] Cryptohedge Financial Services soft launch
« Reply #4 on: February 01, 2015, 04:50:22 AM »
Nothing shows up when I search CFSGOLD in the GUI at the Market page.

And when I search bitGold, I get a list of trading pairs but bitGOLD:CFSGOLD  isn't one of them.

It's there. The pair is the other way though. Search for CFSGOLD:bitGOLD and it'll come up.

Offline Pheonike

Re: [ANN] Cryptohedge Financial Services soft launch
« Reply #5 on: February 01, 2015, 05:04:19 AM »

Same here, I don't see it.

Offline Bitcoinfan

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Re: [ANN] Cryptohedge Financial Services soft launch
« Reply #6 on: February 01, 2015, 05:06:39 AM »
This is really compelling. 

Could you clarify this point for me.  Its not clear to me if what is being sold right now is part of your initial CFS Blockchain Offering.  If we purchase CFSGold now, will we be part of this 40% sharedrop?


"CFS sharedrop
When Cryptohedge begins public trading on the BitShares Decentralized Exchange, the share
allocation will be 40% to employees, 40% offered to the public in the CFS Initial Blockchain
Offering. The remaining 20% of CFS shares will be given for free to CFSasset investors, with
half of these (10% of total CFS) going to CFSGOLD investors."

Offline onceuponatime

Re: [ANN] Cryptohedge Financial Services soft launch
« Reply #7 on: February 01, 2015, 05:13:39 AM »
Nothing shows up when I search CFSGOLD in the GUI at the Market page.

And when I search bitGold, I get a list of trading pairs but bitGOLD:CFSGOLD  isn't one of them.

It's there. The pair is the other way though. Search for CFSGOLD:bitGOLD and it'll come up.

I searched both ways. It does not show up for me in the GUI.

In the console however I do get:

>> blockchain_list_assets CFSGOLD

ID    SYMBOL NAME                    DESCRIPTION                                     ISSUER                          ISSUED    SUPPLY                     
===========================================================================================================================================================
345   CFSGOLDCryptohedge gold fund.  Cryptohedge gold fund.                          cryptohedge                     0.00 %    10.000000 CFSGOLD           
344   CFSUSD Cryptohedge USD fund    Cryptohedge USD fund                            cryptohedge                     0.01 %    8,200.000000 CFSUSD   

Offline Troglodactyl

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Re: [ANN] Cryptohedge Financial Services soft launch
« Reply #8 on: February 01, 2015, 05:41:12 AM »
I'm finding it fine in GUI with a search for CFSGOLD:BitGold.

EDIT: I'm on 0.5.3, Linux QT wallet.

Offline onceuponatime

Re: [ANN] Cryptohedge Financial Services soft launch
« Reply #9 on: February 01, 2015, 05:50:17 AM »
I'm finding it fine in GUI with a search for CFSGOLD:BitGold.

EDIT: I'm on 0.5.3, Linux QT wallet.

I'm on 0.5.3 Windows  and that (CFSGOLD:BitGold) and all its variations for capitalization give me nothing.

Offline BunkerChain Labs

Re: [ANN] Cryptohedge Financial Services soft launch
« Reply #10 on: February 01, 2015, 07:00:44 AM »
It's strange some of you are not seeing the symbol. I am seeing it just fine and the address included in the post showed up for me.

I even bought in!

Hope you guys are a big success!

Jonathan
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Offline lovejoy

Re: [ANN] Cryptohedge Financial Services soft launch
« Reply #11 on: February 01, 2015, 07:09:52 AM »
Yet another EPIC development!

Great work fellas! 

Offline arhag

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Re: [ANN] Cryptohedge Financial Services soft launch
« Reply #12 on: February 01, 2015, 07:20:48 AM »
This is fantastic! +5%

By the way, I like the trading gateway idea. This is something that I hope will eventually be implemented in BitShares directly: limit orders + atomic chained fill-or-kill market orders  (basically what Ripple already does with their path finding algorithm) with price limits on the end-point asset conversion. But until that day, CFS could do it at the cost of exposing the user to counterparty risk over the <20 second duration of the trade ;). I would also like to see you guys go further and actually implement the path finding algorithm on your end to provide the most optimal conversion path, allow the user to specify conversion limits so that you do not go through with the order if the best available liquidity is not good enough (as determined by the user), and even allow the user to specify a fixed amount of the end-point asset that they want delivered to another BTS account (with the remainder returned backed to the user). With these features implemented, light wallets could easily integrate an API that you guys provide to pay a fixed BitUSD payment to a merchant which is paid for by the user's BitGold balance, all within 20 seconds.
« Last Edit: February 01, 2015, 07:45:50 AM by arhag »

Offline joele

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Re: [ANN] Cryptohedge Financial Services soft launch
« Reply #13 on: February 01, 2015, 08:05:23 AM »
+5% awesome!
More awesome if shapeshift.io will offer bitGold exchange as well

Offline Pheonike

Re: [ANN] Cryptohedge Financial Services soft launch
« Reply #14 on: February 01, 2015, 09:01:36 AM »
I was on 5.1,  upgraded to 5.3 and now its visible in GUI.  :)

 

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