The purpose of this thread is to discuss the market rules that we have implemented and their implications.
General Principle: Everyone should get what they ask for and nothing more.
For BitUSD there are 3 basic market operations:
Buy XTS with USD - requires you to have USD and place a bid to receive XTS
Ask USD for XTS - requires you to have XTS that you are attempting to sell for USD
Short USD with XTS - requires you to have XTS and place a bid for XTS.
When your Short bid is matched, the XTS from the SHORT and XTS from the ASK are placed into collateral for the creation of a COVER order for USD issued.
Before any Short orders may be entered 25 delegates must be publishing a price feed that is less than 24 hours old
All short bids must be less than 1.33x the median delegate price feed.
Before any orders execute the market must meet the following conditions:
2 million XTS must be present in ASK orders
2 million XTS must be present in SHORT orders
This condition must also hold true AFTER all orders have matched.
When 3/4 of the collateral or more is required to buy back the USD owed on a COVER order, the market accepts the highest bids until all USD is paid back. Best case 1/4 * 95% is returned to the owner of the COVER order and 1/4*5% is paid as fees to the network. Worst case the XTS held as collateral is insufficient to buy back all the USD.
When a COVER order lacks sufficient XTS all trades stop until someone sells their USD at the cover price.
No Margin Calls are executed at a price below .66 * the median delegate price feed. Trades will continue but the cover will wait until the price feed falls.
While the BitAsset is boot-strapped with price feeds, it is envisioned that the price feed can be replaced with a 24 hour moving average.
To cover a short position, you must first BUY USD on the market and then send it to your short position to free the collateral.
In the event that order matching results in your order balance being so small that when you multiply it by your order price you get 0, then your remaining balance "dust" is counted as fees charged.