What is happening with this? Bitshares really needs this or something like it.
I still think my idea is better, but something is better than nothing. Last time I discussed my idea with forum members, I was never convinced that it wouldn't work. The main antagonists mainly slapped their knees and said "Nubits = bad". However, they wrongly deduced that my idea is anything like Nubits... because it isn't. It is quite different from Nubits in numerous ways. For instance, Nubits' recent derailing of their peg would not of happened with my proposal.
1. Bitshares autonomously issues new BTS tokens, specifically for the purpose of funding liquidity operations.
2. Bitshares shorts every committee-issued SmartCoin, and puts them up for sale at an arbitrary percentage over the price feed, while at the same time putting up buy orders at the same arbitrary percentage below the peg. Autonomous liquidity is provided for both sides of the markets.
3. The percentage the SmartCoins are sold over (and under) the price feed, the amount of liquidity provided for each SmartCoin market and the amount of collateral is determined by the committee. Thus, it can be adjusted whenever the community deems it is necessary.
4. Considering that the autonomous liquidity is provided at an arbitrary amount above (and below) the peg, Bitshares will make a profit each time these autonomous liquidity operations are utilized. Thus, the amount of funds available for these liquidity operations will grow in time without the need for any more dilution. This profit can be used to provide more liquidity, or it can be burned as the community sees fit.
5. If the liquidity pool for any certain SmartCoin is running low, Bitshares can autonomously issue more BTS tokens so that the amount of liquidity provided (which is again set by the committee) is maintained.
a. This step would only be necessary if:
i. The committee adds more SmartCoins (such as bitAPPLE, bitGOOGLE, etc.) to the DEX.
ii. On the off chance that the market making operations are unprofitable due to market trends. Market making operations cannot be guaranteed to be profitable.
6. Instant liquidity is observed across all SmartCoin markets, effectively bootstrapping DEX liquidity and fixing one of Bitshares’ most glaring problems.
7. As “natural liquidity” (liquidity provided by actual users) grows, the committee can lower the amount of liquidity provided autonomously. Effectively, this proposal works as training wheels on a bicycle. As soon as the DEX has sufficient “natural liquidity”, all autonomous liquidity operations can cease and the BTS/SmartCoins that were printed can be burned.
a. Autonomous liquidity operations can be ceased on a market-by-market basis, as inherently some markets will be dynamically more liquid than others.
Topic: Subsidizing Market Liquidity (Read 91292 times)
