[POLL] Possible committee actions to help with liquidity

[Akado]

And we could all help with that https://bitsharestalk.org/index.php/topic,20859.0.html

I can't build an autonomous decentralized MM bot, but I can attempt to build a bot that anyone could download and run on their computer. I will mess around with it... I have been learning Javascript/Node the past few months (I've been making Meteor apps specifically) and might be able to do that. I also have done some Java/C++/HTML/CSS in the past, but am really rusty in Java/C++. I think an open sourced Meteor app that anyone can download and run in their browser would be legit. I would need to study the economics of MM bots though first.  ???

No need to have a decentralized one or run one. Just have people donating some funds to whoever is using bots, have them focus on USD/BTS pair and it's a go. Then when that market has a decent amount of liquidity and grows, slowly move on to other markets like CNY/BTS or BTC/BTS

[puppies]

I can't build an autonomous decentralized MM bot, but I can attempt to build a bot that anyone could download and run on their computer. I will mess around with it... I have been learning Javascript/Node the past few months (I've been making Meteor apps specifically) and might be able to do that. I also have done some Java/C++/HTML/CSS in the past, but am really rusty in Java/C++. I think an open sourced Meteor app that anyone can download and run in their browser would be legit. I would need to study the economics of MM bots though first.  ???

If your market maker bot could provably provide evidence of market making activity it could be used to help provide payment to those willing to provide liquidity. 

[CoinHoarder]

I'm glad that a few people like the idea of having an autonomous market maker! @Xeldal @Empirical1.2 @puppies @Akado

You can't guarantee trades will be profitable, but I like the idea.

Ah, OK my bad.. I honestly don't know a whole lot about market making, in that case this probably shouldn't be fee pool funded.

In addition, if anyone could fund this pool, and take the chance on its profitability, it could be very popular.

I agree, it is a good idea for this to be fund-able by shareholders. This would also help with the issue  @Empirical1.2 brought up by allowing people to deposit assets the autonomous market maker was low on:

Apparently it's a little bit harder than just setting at X%...

The problem with market making is its only profitable in mean reverting markets (sometimes referred to as ranging), as soon as you get a strong trend the market maker will lose money because it will end up with an unbalanced inventory of assets. That risk makes designing a good one very very complicated.

I think the idea of a simple native MM is a good idea in itself.  Maybe a fit for a smart contract.

I would prefer it to be autonomous or I personally would not likely deposit into it.

It probably wouldn't require committee funds but may be a nice addition.  And if profitable, is a nice addition to the committee account as well. The MM pool could simply issue a token for donations to it, and the token could be exchanged back in for the equivalent percentage ownership of whats left of the pool... minus some fee.

Pretty simple.

Agreed, this could be like a UIA, or there could be a specific MM account that people can load with different Smartcoins.

I'd like to see something like this too. I still think we should attempt to come up with something, even if it has a daily limit/other. With more liquidity, BitUSD would be a more trusted option than NBT/Uphold but without it, it's the least favoured option so I'm always in favour of addressing this even if there's a cost and the market maker isn't profitable.

I concur

We seem to be bottlenecked by development.  Either cost or manpower.  If we can come up with solutions that don't require cnx, we will be all the stronger for it. 

Unfortunately, I agree but this could at the very least be put into the long term plans for Bitshares. I think increasing liquidity should be the main priority of development.

And we could all help with that https://bitsharestalk.org/index.php/topic,20859.0.html

I can't build an autonomous decentralized MM bot, but I can attempt to build a bot that anyone could download and run on their computer. I will mess around with it... I have been learning Javascript/Node the past few months (I've been making Meteor apps specifically) and might be able to do that. I also have done some Java/C++/HTML/CSS in the past, but am really rusty in Java/C++. I think an open sourced Meteor app that anyone can download and run in their browser would be legit. I would need to study the economics of MM bots though first.  ???

[Akado]

I think that increasing the amount of bitusd in circulation would help external liquidity as well.  I think a worker proposal to pay someone to put up buy and sell walls on polo is definitely worth exploring.  I'm sure some of our bot makers could easily design a bot that would hold the peg.

And we could all help with that https://bitsharestalk.org/index.php/topic,20859.0.html

[puppies]

In my understanding the BitAssets in the fee pool must be sold regularly, and the proceeds must be used to re-fill the fee pool with BTS to enable transfers of BitAssets without owning BTS.

Despite the slight advantage from the CER, this buying/selling of BitAssets is not necessarily profitable. In order to maintain the fee pool reserves it is IMO not an option to use them for anything else.

Option 2 presupposes that we would fund the fee pools with a worker as we have done in the past.  I am personally for option 1 and then using those funds to refill the fee pools.

I would like to go a different route with these funds, but it would take quite a bit of development. I suggest we use the funds in the fee pool to create an autonomous market maker. The price feeds published by delegates can be used and set the peg X% from the median price for each Smartcoin. Over time as fee pool grows, liquidity provided by the autonomous market maker will grow along with it. Slowly and permanently growing liquidity is better than putting a "band aid" on the problem (which is IMO what the OP does.) The autonomous market maker should only makes trades if a trade is profitable, so the fee pool grows slowly overtime from trading profits and also Smartcoin fee collection.

We seem to be bottlenecked by development.  Either cost or manpower.  If we can come up with solutions that don't require cnx, we will be all the stronger for it. 

Assuming MAKER will incentivize market making on the DEX by the end of Q1, what would be the best way to use those funds to incentivize market making services on external exchanges?

BitUSD has recently been added to Poloniex, which is often 1st/2nd for BTS volume. It is also where NBT finds most of it's demand so I would perhaps look to pay/subsidize a BitUSD market maker there.

I think that increasing the amount of bitusd in circulation would help external liquidity as well.  I think a worker proposal to pay someone to put up buy and sell walls on polo is definitely worth exploring.  I'm sure some of our bot makers could easily design a bot that would hold the peg.

Glad to see this poll.
I voted for number 2.

At what price would the committee sell these bitassets though?  5% over feed price would be good

I think 5-10% would be the place to start. 

Thanks for the input everyone.

[Empirical1.2]

I would like to go a different route with these funds, but it would take quite a bit of development. I suggest we use the funds in the fee pool to create an autonomous market maker. The price feeds published by delegates can be used and set the peg X% from the median price for each Smartcoin. Over time as fee pool grows, liquidity provided by the autonomous market maker will grow along with it. Slowly and permanently growing liquidity is better than putting a "band aid" on the problem (which is IMO what the OP does.) The autonomous market maker should only makes trades if a trade is profitable, so the fee pool grows slowly overtime from trading profits and also Smartcoin fee collection.

I'd like to see something like this too.

Apparently it's a little bit harder than just setting at X%...

The problem with market making is its only profitable in mean reverting markets (sometimes referred to as ranging), as soon as you get a strong trend the market maker will lose money because it will end up with an unbalanced inventory of assets. That risk makes designing a good one very very complicated.

I still think we should attempt to come up with something, even if it has a daily limit/other.

With more liquidity, BitUSD would be a more trusted option than NBT/Uphold but without it, it's the least favoured option so I'm always in favour of addressing this even if there's a cost and the market maker isn't profitable.

[Xeldal]

I would like to go a different route with these funds, but it would take quite a bit of development. I suggest we use the funds in the fee pool to create an autonomous market maker. The price feeds published by delegates can be used and set the peg X% from the median price for each Smartcoin. Over time as fee pool grows, liquidity provided by the autonomous market maker will grow along with it. Slowly and permanently growing liquidity is better than putting a "band aid" on the problem (which is IMO what the OP does.) The autonomous market maker should only makes trades if a trade is profitable, so the fee pool grows slowly overtime from trading profits and also Smartcoin fee collection.

You can't guarantee trades will be profitable, but I like the idea. 

In addition, if anyone could fund this pool, and take the chance on its profitability, it could be very popular.

I think the idea of a simple native MM is a good idea in itself.  Maybe a fit for a smart contract.  It probably wouldn't require committee funds but may be a nice addition.  And if profitable, is a nice addition to the committee account as well. 

The MM pool could simply issue a token for donations to it, and the token could be exchanged back in for the equivalent percentage ownership of whats left of the pool... minus some fee.

Pretty simple.

[JonnyB]

Glad to see this poll.
I meant to vote for number 3 but voted 2 by mistake.

At what price would the committee sell these bitassets though?  5% over feed price would be good

[CoinHoarder]

I would like to go a different route with these funds, but it would take quite a bit of development. I suggest we use the funds in the fee pool to create an autonomous market maker. The price feeds published by delegates can be used and set the peg X% from the median price for each Smartcoin. Over time as fee pool grows, liquidity provided by the autonomous market maker will grow along with it. Slowly and permanently growing liquidity is better than putting a "band aid" on the problem (which is IMO what the OP does.) The autonomous market maker should only makes trades if a trade is profitable, so the fee pool grows slowly overtime from trading profits and also Smartcoin fee collection.

[Empirical1.2]

Assuming MAKER will incentivize market making on the DEX by the end of Q1, what would be the best way to use those funds to incentivize market making services on external exchanges?

BitUSD has recently been added to Poloniex, which is often 1st/2nd for BTS volume. It is also where NBT finds most of it's demand so I would perhaps look to pay/subsidize a BitUSD market maker there.

[pc]

In my understanding the BitAssets in the fee pool must be sold regularly, and the proceeds must be used to re-fill the fee pool with BTS to enable transfers of BitAssets without owning BTS.

Despite the slight advantage from the CER, this buying/selling of BitAssets is not necessarily profitable. In order to maintain the fee pool reserves it is IMO not an option to use them for anything else.

[puppies]

There has been a lot of discussion about improving liquidity recently.  I wanted to get some input on possible actions the committee account could take. 

Option 1.  The committee could sell the bitassets collected by the fee pool back into the market.
Through the fee pool the committee is currently long 6910 USD, 7860 CNY, and .473BTC.  In the case of USD that is over 6% of total supply.

Option 2.  The committee could use the bts procured from selling the assets in option 1 to short more of the asset into existence.  Assuming a 3x collateral ratio, the committee could short an extra 2300USD into existence. 

Option 3.  The committee could receive funds from a worker proposal, and use those to short a larger amount of an asset into existence.  We could for example create 50k USD, and 50 BTC.

This is not an endorsement of any of these actions.  I am trying to collect community input.