Author Topic: how about to optimize the parameters of bitCNY like this?  (Read 10672 times)

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Offline xeroc

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Interesting discussion. I can definitely understand the arguments on both sides. I think I would support a change to a 1% offset to the forced settlement price. However, I think the difference should go to the shorter, not the asset creator.
offset goes to the SHORTER .. I was mistaken with my statements above!

Offline Chronos

Or what about a compromise: 0.5% offset? This would be an interesting thing to vote on.

Offline Chronos

Interesting discussion. I can definitely understand the arguments on both sides. I think I would support a change to a 1% offset to the forced settlement price. However, I think the difference should go to the shorter, not the asset creator.

I don't agree with removing forced settlement entirely, as @merivercap proposes.

Offline bitcrab

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Offline bitcrab

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Offline xeroc

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You need to ask yourself, do we want people to provide BitAsset liquidity or not?  Also, why should holders be able to force shorters to buy from them?  Why shouldn't holders have to sell on the open market like anyone else?  And if shorters should be forced to buy from them, then why shouldn't shorters be paid a fee for that? 
That's not how settlement works. The long doesn't force the short to buy
at the market. Instead, all that happens is that whoever settles a long
position buys a portion of the collateral of the short at a FAIR PRICE
(i.e. price feed) - and reduce the shorters debt. That means that the
shorter can re-enter his short position easily buy borrowing again from
the network and selling them again in the market. If you are lucky and
there is a stupid settlement (i.e. highest bids are above feed), then
the shorter can even make a profit out of being settled and
re-borrowing/shorting.

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The committee was tasked with the responsibility of improving network parameters, right?
Depends on how you define "improving".

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So we should have absolutely no problem doing so, if that's what shareholders decide upon.
I don't think it is so obvious what to do in this case.

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Of course, current holders may have bought with the knowledge that they would be able to settle without a fee.  Because of that, it would be great if we could change the offset such that current holders would not be subject to it, only those buying BitAssets going forward.
That's not possible without a hard forking change of the code.

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But I'm sure that's impossible without some development work.  So if a proposal is put forth to change the offset and it's passed by shareholders, then we will have imposed a new fee.  Big deal.  It happens everywhere.  And if it helps encourage people to short BitAssets (why wouldn't it?), then good.

@bitcrab, what's the progress on your BSIP?

Offline bitcrab

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This is the percent to adjust the feed price in the short's favor in the event of a forced settlement.

This is what I've been saying all the time. You're stealing from the holders in favour of the shorters.

Bitcrab/Transwiser are shorters, so they clearly have their own interests at stake here, yet he claims to be acting in the best interest of the network. Just like last time we had a discussion (and rushed actionism) about forced settlement.

transwiser is a gateway, it is not always a shorter or holder, depend on the supply/demand of a smartcoin, actually in current moment transwiser is a shorter of bitCNY and holder of TCNY(with 1% offset), you can check the transaction records of btareserve, this account requested settlement of about 100k TCNY in the last 2 weeks, if bitCNY is applied 1% offset, it's very possbile that more users would like to short bitCNY and transwiser will be a holder of bitCNY.
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Offline tbone

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This is the percent to adjust the feed price in the short's favor in the event of a forced settlement.

This is what I've been saying all the time. You're stealing from the holders in favour of the shorters.

Bitcrab/Transwiser are shorters, so they clearly have their own interests at stake here, yet he claims to be acting in the best interest of the network. Just like last time we had a discussion (and rushed actionism) about forced settlement.

You need to ask yourself, do we want people to provide BitAsset liquidity or not?  Also, why should holders be able to force shorters to buy from them?  Why shouldn't holders have to sell on the open market like anyone else?  And if shorters should be forced to buy from them, then why shouldn't shorters be paid a fee for that? 

The committee was tasked with the responsibility of improving network parameters, right?  So we should have absolutely no problem doing so, if that's what shareholders decide upon.  Of course, current holders may have bought with the knowledge that they would be able to settle without a fee.  Because of that, it would be great if we could change the offset such that current holders would not be subject to it, only those buying BitAssets going forward.  But I'm sure that's impossible without some development work.  So if a proposal is put forth to change the offset and it's passed by shareholders, then we will have imposed a new fee.  Big deal.  It happens everywhere.  And if it helps encourage people to short BitAssets (why wouldn't it?), then good.

Offline pc

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Quote
This is the percent to adjust the feed price in the short's favor in the event of a forced settlement.

This is what I've been saying all the time. You're stealing from the holders in favour of the shorters.

Bitcrab/Transwiser are shorters, so they clearly have their own interests at stake here, yet he claims to be acting in the best interest of the network. Just like last time we had a discussion (and rushed actionism) about forced settlement.
Bitcoin - Perspektive oder Risiko? ISBN 978-3-8442-6568-2 http://bitcoin.quisquis.de

Offline xeroc

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Well .. turns out I was wrong:

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This is the percent to adjust the feed price in the short's favor in the event of a forced settlement.
https://github.com/cryptonomex/graphene/blob/006d54863312c7daf1ccb73d5940ec658c860efb/libraries/chain/include/graphene/chain/protocol/asset_ops.hpp#L97-L98

Need to think more about the consequences of this

Offline xeroc

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The offset is NOT paid to the shorter but to the issuer of the asset,
i.e. committee-account in case of bitCNY and thus is paid to all bitshares
shareholders!!

Wow, this is big difference. Tested on testnet?

I have not .. but I pretty much had that IMPRESSION ..

Let me rephrase:

      I THINK, that the offset is paid to the issuer and not the shorter.

Offline abit

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Setting a 1% offset won't change anything here. Shorters always have
just two options:
* adjust collateral
* get margin called

What changes is the premium (maybe) and the liquidity (also maybe).

But I am willing to support such an experiment in bitCNY unless someone
can come up with a solid argumentation to NOT try it. For me, a
settlement offset is still just a percentage fee that is taken by the
network (and thus profits all shareholders at the cost of long-positions
that can get out before this gets implemented on chain) and might bring
in some liquidity.
in my view, if we can say force settlement is a service, then the offset is the service fee paid from holder to shorter.
The offset is NOT paid to the shorter but to the issuer of the asset,
i.e. committee-account in case of bitCNY and thus is paid to all bitshares
shareholders!!

Wow, this is big difference. Tested on testnet?
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Offline xeroc

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Setting a 1% offset won't change anything here. Shorters always have
just two options:
* adjust collateral
* get margin called

What changes is the premium (maybe) and the liquidity (also maybe).

But I am willing to support such an experiment in bitCNY unless someone
can come up with a solid argumentation to NOT try it. For me, a
settlement offset is still just a percentage fee that is taken by the
network (and thus profits all shareholders at the cost of long-positions
that can get out before this gets implemented on chain) and might bring
in some liquidity.
in my view, if we can say force settlement is a service, then the offset is the service fee paid from holder to shorter.
The offset is NOT paid to the shorter but to the issuer of the asset,
i.e. committee-account in case of bitCNY and thus is paid to all bitshares
shareholders!!

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The solid argument is that modifying the settlement guarantee is hurting bitCNY holders by effectively robbing them of 1% of their assets.
Committee members voting for such a proposal may even be legally liable for the resulting financial damage.
Robbing holders of bitAssets will destroy all credibility of bitAssets, nobody's going to touch them again with a long pole. Committee members voting for such a proposal will be responsible for this, too.

modifying settlement offset is just to make the rule more fair, force settlement is the final way for holders to get liquidity, not the only way,not the routine way. and if the proposal is applied, holders has at least 30 days to execute force settlement with 0 offset to avoid the loss.
committee has pushed several big change, this is not the biggest one, and not the last one, one of committee's mission is to optimize the network parameters, of course the precondition is the change get enough support from shareholders.
this is not robbing holders, this is just ask holders to pay when they are served by shorters.
@pc, this is not really a "robbery" since they can still sell their long
position at market prices into the order book. They just can't settle it
without a 1% fee/loss.

But I do recognize the credibility issuer here. We advertised bitUSD to
be redeemable for 1$ woth of BTS but changing the rules will result in
them being "settled" at $0.99. Still, currently people won't settle
their longs because they could sell the bitUSD for more than $1 at the
market because of the premium. If we reduce the premium, then they can
probably (experiment here) sell their bitUSD for ~$1 at the market and
settle for slightly less (-1%).
It changes the game, but does IMHO not rob the longs of their bitUSD
value!

Not sure about legal liabilities as committee members merely act in
favor of the shareholders. Any shareholder can start a proposal to tweak
any parameter and committee-members are forced to at least decide
whether to support or not support any proposal brought forward. Also,
there was no contract signed by any party that guaranteed a settlement
price of 100% in a legal binding manner (credibility put aside).

Even banks are changing their deals from time to time and give you an
extraordinary option to quit a contract. Same thing here with a 30 day
notice.

At least we are having a solid discussion about this.

Offline bitcrab

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Well, that's HER, who took the risk and she should know about that risk
prior to borrowing anything from the network. Being "hurt" doesn't
really fit here, she gambled, and lost at her very own fault.
yes, everyone should understand and accept the rule before playing games, but this does not mean any rule is fair.

Setting a 1% offset won't change anything here. Shorters always have
just two options:
* adjust collateral
* get margin called

What changes is the premium (maybe) and the liquidity (also maybe).

But I am willing to support such an experiment in bitCNY unless someone
can come up with a solid argumentation to NOT try it. For me, a
settlement offset is still just a percentage fee that is taken by the
network (and thus profits all shareholders at the cost of long-positions
that can get out before this gets implemented on chain) and might bring
in some liquidity.
in my view, if we can say force settlement is a service, then the offset is the service fee paid from holder to shorter.

The solid argument is that modifying the settlement guarantee is hurting bitCNY holders by effectively robbing them of 1% of their assets.
Committee members voting for such a proposal may even be legally liable for the resulting financial damage.
Robbing holders of bitAssets will destroy all credibility of bitAssets, nobody's going to touch them again with a long pole. Committee members voting for such a proposal will be responsible for this, too.

modifying settlement offset is just to make the rule more fair, force settlement is the final way for holders to get liquidity, not the only way,not the routine way. and if the proposal is applied, holders has at least 30 days to execute force settlement with 0 offset to avoid the loss.
committee has pushed several big change, this is not the biggest one, and not the last one, one of committee's mission is to optimize the network parameters, of course the precondition is the change get enough support from shareholders.
this is not robbing holders, this is just ask holders to pay when they are served by shorters.

Guys, soon we'll have a new smart coin ARS, why not test the new parameter with it first? Nobody would get hurt with a new asset.

surely bitARS can set 1% offset, but I don't think China community need to wait to see bitARS's behavior before moving forward.

I generally agree @bitcrab that a lower offset is good.  I'll take it one step further and say forced settlement is unnecessary.  We designed CASH.USD to do exactly this for the reason @bitcrab mentions.   If the committee decides to lower the offset and disable forced settlement there would be no reason for CASH.USD and we would use bitUSD.  If only the offset is changed and nothing is done with forced settlement then we'll probably still continue on with CASH.USD.

It would be great if we didn't have to run our own.  Would the committee members consider the offset as bitcrab desires and also remove forced settlement?  Read about CASH.USD here (https://bitsharestalk.org/index.php/topic,22192.msg289691.html#msg289691)

These are experiments and it may be fine for now to run in parallel, but it would be good to know where the community and committee stand on this.

in my view, force settlement is a necessary and important feature, we can try to set better parameters to avoid negative effect to the economy,  I don't think it's a good idea to remove it.
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Offline merivercap

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I generally agree @bitcrab that a lower offset is good.  I'll take it one step further and say forced settlement is unnecessary.  We designed CASH.USD to do exactly this for the reason @bitcrab mentions.   If the committee decides to lower the offset and disable forced settlement there would be no reason for CASH.USD and we would use bitUSD.  If only the offset is changed and nothing is done with forced settlement then we'll probably still continue on with CASH.USD.

It would be great if we didn't have to run our own.  Would the committee members consider the offset as bitcrab desires and also remove forced settlement?  Read about CASH.USD here (https://bitsharestalk.org/index.php/topic,22192.msg289691.html#msg289691)

These are experiments and it may be fine for now to run in parallel, but it would be good to know where the community and committee stand on this. 
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