Author Topic: [poll] Should we use a worker proposal to reduce the premium for bitassets?  (Read 2688 times)

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Offline puppies

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Liquidity is one of our greatest issues.  One possible solution would be to use the power to dilute to create more bitassets to hold the peg. 

We could create a worker proposal that sends funds to the committee account.  We could design a bot that will short assets into existence and sell them at a prescribed rate above the peg.  This would still require a majority of committee members to approve each transaction.  this approval could also be automated.

We could through the committee have a market maker that holds the peg of smartcoins to within a couple of percentage points of the feed price.  We could even branch out into other derivatives such as individual stocks. 

Once again I am looking for community input.  Please argue your point.  If there are specific parameters that would be deal breakers please mention them as well.   You may change your vote if you have changed your mind.

Thank you for your input.
« Last Edit: January 09, 2016, 08:50:00 pm by puppies »
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Offline JonnyB

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Re: [poll] Should we use dilution to reduce the premium for bitassets?
« Reply #1 on: January 09, 2016, 01:44:58 am »
The reserve pool should be used to create a supply of bitasset and then they should be put up for sale as a single large wall at no lower than feed price +10% 
This is important for those wishing to close their bitasset debt obligations at a reasonable price.
If bitasset creators are not confident they will be able to exit their positions they are less likely to create bitassets which is bad for liquidity.
The committee will have to be trusted with value that is 300% than the assets created because of reserve requirements.
the proceeds of these sales should be returned to the reserve pool so it is less of a dilution and it stops the committee destroying the bitassets created.
I think this should be done with bitusd only first as a trial.
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Offline xeroc

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Re: [poll] Should we use dilution to reduce the premium for bitassets?
« Reply #2 on: January 09, 2016, 10:40:15 am »
I support this idea and I also think that for the short-term a +10% should be fine from a market making perspective ... once the orders are no longer filled in a timely manner (because liquidity went up) then we can consider lowering the premium or removing the worker entirely.

I further recommend to use a separate multisig account controlled by people familiar with trading and scripting to not bother the committee more.

It is important for us to realize that liquidity is not for free and we need to figure out how to best approach the market without causing to much of a loss for the shareholders while still providing some liquidity

Once the MAKER fork went through we can kill this idea .. or not ..
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Offline abit

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Re: [poll] Should we use dilution to reduce the premium for bitassets?
« Reply #3 on: January 09, 2016, 11:16:40 am »
I further recommend to use a separate multisig account controlled by people familiar with trading and scripting to not bother the committee more.
How to run a trading bot with a multisig account, would be a challenge. Maybe MAKER is easier/sooner.
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Offline xeroc

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Re: [poll] Should we use dilution to reduce the premium for bitassets?
« Reply #4 on: January 09, 2016, 12:52:14 pm »
I further recommend to use a separate multisig account controlled by people familiar with trading and scripting to not bother the committee more.
How to run a trading bot with a multisig account, would be a challenge. Maybe MAKER is easier/sooner.
One master in multi sig proposes transactions and others in multisig approve automatically using a bot/script (according to some predefined rules/protocol)
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Offline morpheus

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Re: [poll] Should we use dilution to reduce the premium for bitassets?
« Reply #5 on: January 09, 2016, 03:11:10 pm »
The word 'dilution' is a bad word to use in cryptoland.  I say we stop using it around here and not consider it.

Maker and lending are best for increasing liquidity organically in a more market-driven, p2p fashion.  These two features combined with some market making with the reserve pool should be the first steps towards increasing liquidity.

Offline abit

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Re: [poll] Should we use dilution to reduce the premium for bitassets?
« Reply #6 on: January 09, 2016, 06:45:22 pm »
The word 'dilution' is a bad word to use in cryptoland.  I say we stop using it around here and not consider it.
Agree.

Quote
Maker and lending are best for increasing liquidity organically in a more market-driven, p2p fashion.  These two features combined with some market making with the reserve pool should be the first steps towards increasing liquidity.
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Offline mf-tzo

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Re: [poll] Should we use dilution to reduce the premium for bitassets?
« Reply #7 on: January 09, 2016, 06:54:09 pm »
The word 'dilution' is a bad word to use in cryptoland.  I say we stop using it around here and not consider it.

Maker and lending are best for increasing liquidity organically in a more market-driven, p2p fashion.  These two features combined with some market making with the reserve pool should be the first steps towards increasing liquidity.

fully agree! Please let's stop using the word dilution! lending, margin trading, POS, developers accepting bitasssets as donations these things will increase liquidity. Please start thinking how to destroy and burn some bts and reduce their supply instead of further dilution..

Offline Shentist

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Re: [poll] Should we use dilution to reduce the premium for bitassets?
« Reply #8 on: January 09, 2016, 06:58:56 pm »
The reserve pool should be used to create a supply of bitasset and then they should be put up for sale as a single large wall at no lower than feed price +10% 
This is important for those wishing to close their bitasset debt obligations at a reasonable price.
If bitasset creators are not confident they will be able to exit their positions they are less likely to create bitassets which is bad for liquidity.
The committee will have to be trusted with value that is 300% than the assets created because of reserve requirements.
the proceeds of these sales should be returned to the reserve pool so it is less of a dilution and it stops the committee destroying the bitassets created.
I think this should be done with bitusd only first as a trial.

 +5% and maybe BTC

the lack of closing as a shorter is really bad. we should think about some solutions like this.

Offline Akado

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Re: [poll] Should we use dilution to reduce the premium for bitassets?
« Reply #9 on: January 09, 2016, 07:00:55 pm »
Quote
Maker and lending are best for increasing liquidity organically in a more market-driven, p2p fashion.  These two features combined with some market making with the reserve pool should be the first steps towards increasing liquidity.

This is true and would love to see it, however I just don't see lending any time soon. And maker, well, maybe after stealth. Stealth should be done by what, March? i'd give it two more months for maker, this if we don't have anything getting in it's way. Maybe after summer we will see the liquidity increasing. We also are having an API similar to Polo so that may facilitate bots.
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Offline CoinHoarder

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Re: [poll] Should we use dilution to reduce the premium for bitassets?
« Reply #10 on: January 09, 2016, 07:11:34 pm »
My vote is yes.... we have the chance to crush our competition (Nubits) by implementing such a feature.

Pretty much Nubit's only benefit is that they dilute Nushares holders to provide liquidity for Nubits, and I think we should level the playing field and do this ourselves with Smartcoins. However, the way you state it should work in your OP is flawed because it only helps people that want to buy Smartcoins at a reasonable price, and does nothing to ensure that they can sell them at a reasonable price. There is a reason Nubits puts up both sell and buy walls... if I am buying Smartcoins I want to be reasonably certain that I will be able to sell them close to parity. I think the way Nubits/Nushares provides liquidity is a much better way of doing it... by the use of elected custodians which are provided incentive by diluting Nushares. Each custodian provides their own funds for operating liquidity operations and is incentived by payments made from Nushares dilution.

In my opinion Smartcoins would truly be a superior solution to Nubits' solution in every way if this were to be implemented. If you guys are going to pass this proposal, then make sure to let me know so I can dump my Nushares... lol.  ;D
« Last Edit: January 09, 2016, 07:21:02 pm by CoinHoarder »
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Offline mf-tzo

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Re: [poll] Should we use dilution to reduce the premium for bitassets?
« Reply #11 on: January 09, 2016, 07:34:38 pm »
Can someone please explain me what is so amazing about Nubits? I see them mentioned a lot lately in our forum and I really don't understand why.. What is so special about them? Nushares had a max market cap of $6 mil a year ago and bitshares had a market cap of $80 mil. Currently Nushares ar $3 mil and we are more than double that..Nubits is a bit less than a usd and bitusd is always at premium to usd except in the very beggining of bitsharesX..So what is so special about Nubits and we should imitate them?

You want some bitusd liquidity? I bet that if bitshares market cap goes to $3 mil, lots of people will short the hell of bitusd and a lot of bitusd will be created.. Do we want bitshares market cap at $3 mil?? Because if we keep talking about dilution I bet you it will go below $3 mil...

Offline Pheonike

Re: [poll] Should we use dilution to reduce the premium for bitassets?
« Reply #12 on: January 09, 2016, 08:12:24 pm »
They have liquidity and strong peg. The two things we need the most.

Offline merivercap

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Re: [poll] Should we use dilution to reduce the premium for bitassets?
« Reply #13 on: January 09, 2016, 08:40:25 pm »
The word 'dilution' is a bad word to use in cryptoland.  I say we stop using it around here and not consider it.

Maker and lending are best for increasing liquidity organically in a more market-driven, p2p fashion.  These two features combined with some market making with the reserve pool should be the first steps towards increasing liquidity.

Yeah I agree.  It's better to ask 'Should we fund a worker proposal to create a liquidity bot'..  A market making bot can be managed to break even or make a profit.  You can even have insurance just like Rune's Maker Dao proposal to support extreme adverse events.
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Offline puppies

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I changed the wording of the poll. 

Looks like we lost the ability to reset our votes when I did though.
« Last Edit: January 09, 2016, 09:00:42 pm by puppies »
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