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Offline Rune

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Proposed market pegged asset overhaul
« on: February 12, 2015, 05:12:07 PM »

https://github.com/BitShares/bitshares/issues/1375

So it seems like the developers had some discussions about the market pegged assets and the market engine since it had become too complex and buggy, and decided that it needs to be completely revamped.

The new system proposed here will remove shorting, remove interest rate on bitassets (possibly removing yield altogether), and remove relative orders (which were apparently too problematic to implement). New market pegged assets are created by "issuing" them, creating them while locking up 3x their value as collateral in BTS. This is basically like shorting to yourself at the feed price at 0% interest rate in the current system. Once you've issued a market pegged asset you can then sell it on the open market for BTS to get leveraged exposure to BTS, just like before.

It sucks we are seeing changes like this at this point, but on the other hand this new system really is a lot more elegant and will probably allow the market to function a lot more smoothly. I suspect the issuing mechanism can also be used for the prediction markets.
« Last Edit: February 12, 2015, 05:51:37 PM by Rune »

Offline fluxer555

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Re: Looks like market pegged assets are being completely overhauled
« Reply #1 on: February 12, 2015, 05:18:39 PM »
I believe this is still in suggestion phase. I think your claims are too strong without more developer input.
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Offline NewMine

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Re: Looks like market pegged assets are being completely overhauled
« Reply #2 on: February 12, 2015, 05:19:42 PM »
WTF?  Shouldn't this be done on a new chain share dropping at a snapshot or some shit. This is going to kill BTS with a major change like this.

Offline Rune

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Re: Looks like market pegged assets are being completely overhauled
« Reply #3 on: February 12, 2015, 05:24:03 PM »
I believe this is still in suggestion phase. I think your claims are too strong without more developer input.

Could be, I don't know how the chain of command actually works. I just assumed that if an issue was opened this way by bytemaster it's basically what is planned to be done. Theoretical made a document that describes some of the issues with the current market engine: https://github.com/theoreticalbts/bitshares/blob/market_refactor/docs/market-engine-0.8.0.md

I like this proposed change so i think its a good idea to get it implemented. It's less complex so it might help with getting a useable product out sooner.

Offline cube

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Re: Looks like market pegged assets are being completely overhauled
« Reply #4 on: February 12, 2015, 05:24:52 PM »
I believe this is still in suggestion phase. I think your claims are too strong without more developer input.

I doubt it is part of suggestion phase. It is part of dvs/0.8.0 milestone.
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Offline fluxer555

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Re: Looks like market pegged assets are being completely overhauled
« Reply #5 on: February 12, 2015, 05:25:55 PM »
WTF?  Shouldn't this be done on a new chain share dropping at a snapshot or some shit. This is going to kill BTS with a major change like this.

I'm assuming this is going to be implemented in DVS first. This has been standard procedure for all of the latest releases in the past few months.
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Offline fluxer555

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Re: Looks like market pegged assets are being completely overhauled
« Reply #6 on: February 12, 2015, 05:27:25 PM »
I believe this is still in suggestion phase. I think your claims are too strong without more developer input.

I doubt it is part of suggestion phase. It is part of dvs/0.8.0 milestone.

What's nice about DevShares is that it could be implemented into DevShares as a test, and only moved to BTS if it is in fact better. Given that this is significantly easier to implement, it is worth the time to try it.
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Offline xeroc

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Re: Looks like market pegged assets are being completely overhauled
« Reply #7 on: February 12, 2015, 05:29:54 PM »
So we lose one of our killer features: yield. .. thats very ... unfortunate :(
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Offline Rune

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Re: Looks like market pegged assets are being completely overhauled
« Reply #8 on: February 12, 2015, 05:31:40 PM »
WTF?  Shouldn't this be done on a new chain share dropping at a snapshot or some shit. This is going to kill BTS with a major change like this.

It's not really that big of a change, bitassets will still be the same before and after, but markets will be more flexible and have higher liquidity since there will no longer be restrictions on short selling at the feed.

Yield might still stay due to the income from market fees, though I think ultimately all fees have to go to BTS to keep the system long term sustainable. One of the issues with yield is that in the current system if there are no active short orders competing on interest then any person with BTS can short to himself and then harvest the yield for free, ensuring that yield will always be kept low. So the entire concept of yield might not really be feasible anyway.

Offline Chronos

Re: Looks like market pegged assets are being completely overhauled
« Reply #9 on: February 12, 2015, 05:35:34 PM »
Interesting. This seems like a good change, but it certainly is a major one. When is 0.8.0 expected to be released?

Offline graffenwalder

Re: Looks like market pegged assets are being completely overhauled
« Reply #10 on: February 12, 2015, 05:36:18 PM »
so if you wanted to short, you now have to sell your bitasset first, before a profit can be made?

Offline Rune

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Re: Looks like market pegged assets are being completely overhauled
« Reply #11 on: February 12, 2015, 05:37:38 PM »
so if you wanted to short, you now have to sell your bitasset first, before a profit can be made?

Yep, you can sell the bitasset that you have issued, Then you're going to owe that bitasset to the blockchain and will be forced to buy it back at the feed price within 30 days, so if the price of BTS has increased over the 30 days you will have made a profit.

Offline graffenwalder

Re: Looks like market pegged assets are being completely overhauled
« Reply #12 on: February 12, 2015, 05:39:38 PM »
so if you wanted to short, you now have to sell your bitasset first, before a profit can be made?

Yep, you can sell the bitasset that you have issued, Then you're going to owe that bitasset to the blockchain and will be forced to buy it back at the feed price within 30 days, so if the price of BTS has increased over the 30 days you will have made a profit.
How are we going to sell this feature to traders who want to use our platform?

Offline NewMine

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Re: Looks like market pegged assets are being completely overhauled
« Reply #13 on: February 12, 2015, 05:41:13 PM »
WTF?  Shouldn't this be done on a new chain share dropping at a snapshot or some shit. This is going to kill BTS with a major change like this.

It's not really that big of a change, bitassets will still be the same before and after, but markets will be more flexible and have higher liquidity since there will no longer be restrictions on short selling at the feed.

Yield might still stay due to the income from market fees, though I think ultimately all fees have to go to BTS to keep the system long term sustainable. One of the issues with yield is that in the current system if there are no active short orders competing on interest then any person with BTS can short to himself and then harvest the yield for free, ensuring that yield will always be kept low. So the entire concept of yield might not really be feasible anyway.

Getting rid of yield and actual market creation of assets is a huge difference. To create bitUSD, there doesn't have to be anyone to buy it in the new version by the way it is proposed.

Offline Ander

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Re: Looks like market pegged assets are being completely overhauled
« Reply #14 on: February 12, 2015, 05:47:43 PM »
I need to look at this more, but this doesnt look like a major overhaul to me, it looks like a needed clarification of how things work that will make it a lot easier to use.

Will comment more later today.
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