Author Topic: BitShares X Market Rules - DRAFT  (Read 6379 times)

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Offline alt

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Just confirm, I am not sure I have really understand the source code.
If the cover price is lower than 2/3 * feed price, this cover can't finish, so this order will jump, next ask order will continue, right?

Offline alt

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Recent updates to the rules:

1) FDIC BitUSD Insurance will create new XTS necessary to buy BitUSD to cover shorts that run out of collateral.

What do you mean with the bald text?


Effectively, the network will print XTS to buy BitUSD to cover any positions that run out of collateral.

The rules on that, is something the community (alt mainly  :) ) can chime in ,if you have thought about them already.
The above moved to the appropriate thread.

[edit] great! I do not know how to read this forum anymore. Stupid me.
I think it's not a problem now, because there is a minimum allowed cover price, 2/3 * feed price.
and the maximum allowed short price is 4/3 * feed price.
with double backup, the attack can get nothing.

Offline bytemaster

Recent updates to the rules:

1) FDIC BitUSD Insurance will create new XTS necessary to buy BitUSD to cover shorts that run out of collateral.

What do you mean with the bald text?

FDIC is a government agency that insures US bank deposits in the case of under-capitalized bank failures:
http://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporation

bytemaster is doing a similar thing with bitshares and drawing an analogy to the US Federal Deposit Insurance Corporation. Like FDIC, all depositors (or BTSX holders) are insuring the capitalization of the banking system through premiums (in the case of US banks) or dilution when running out of collateral (in the case of BTSX).

The analogy is almost perfect... the US prints new dollars to keep depositors whole when banks run out of collateral backing their loans.   

US Bank creates USD backed by collateral of a house.  Housing market collapses and loan defaults so there is insufficient collateral to "buy back the USD" to take it out of circulation.    With FDIC they print new dollars to cover the loss... a bail out of the shareholders paid for by everyone.  This would be like allowing unbacked BitUSD to circulate.

What should happen is that the banks owners (shareholders) should make good on its loans (those that lent the bank USD, ie: depositors).  The only way for a real bank to do this is to sell shares in itself to raise the capital.  If it is unable to raise enough capital by selling shares then it should give the depositors the shares.   We are effectively building this bailout through share issuance into the system.

The shareholders are borrowing USD into circulation with a promise to pay 1 USD worth of shares in the future.   When we borrow them into existence, we lend them to the short which then sells them.  We lend to the short because the short has provided enough collateral that the shareholders consider it "low risk".   When viewed from this perspective it makes everything perfectly clear and natural.



Where the bank issues new shares in itself to cover the loss.   
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline maqifrnswa

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Recent updates to the rules:

1) FDIC BitUSD Insurance will create new XTS necessary to buy BitUSD to cover shorts that run out of collateral.

What do you mean with the bald text?

FDIC is a government agency that insures US bank deposits in the case of under-capitalized bank failures:
http://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporation

bytemaster is doing a similar thing with bitshares and drawing an analogy to the US Federal Deposit Insurance Corporation. Like FDIC, all depositors (or BTSX holders) are insuring the capitalization of the banking system through premiums (in the case of US banks) or dilution when running out of collateral (in the case of BTSX).
« Last Edit: August 11, 2014, 07:56:57 pm by maqifrnswa »
maintains an Ubuntu PPA: https://launchpad.net/~showard314/+archive/ubuntu/bitshares [15% delegate] wallet_account_set_approval maqifrnswa true [50% delegate] wallet_account_set_approval delegate1.maqifrnswa true

Offline tonyk

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Recent updates to the rules:

1) FDIC BitUSD Insurance will create new XTS necessary to buy BitUSD to cover shorts that run out of collateral.

What do you mean with the bald text?


Effectively, the network will print XTS to buy BitUSD to cover any positions that run out of collateral.

The rules on that, is something the community (alt mainly  :) ) can chime in ,if you have thought about them already.
The above moved to the appropriate thread.

[edit] great! I do not know how to read this forum anymore. Stupid me.
« Last Edit: August 11, 2014, 08:22:42 pm by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline bytemaster

Recent updates to the rules:

1) FDIC BitUSD Insurance will create new XTS necessary to buy BitUSD to cover shorts that run out of collateral.

What do you mean with the bald text?

Effectively, the network will print XTS to buy BitUSD to cover any positions that run out of collateral.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline tonyk

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Recent updates to the rules:

1) FDIC BitUSD Insurance will create new XTS necessary to buy BitUSD to cover shorts that run out of collateral.

What do you mean with the bald text?
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline bytemaster

Recent updates to the rules:

1) FDIC BitUSD Insurance will create new XTS necessary to buy BitUSD to cover shorts that run out of collateral.
2) Any "dust" is charged as fees where dust is defined as  ORDER_BALANCE * ORDER_PRICE == 0 when ORDER_BALANCE > 0
3) If your short order has a balance of less than 1 XTS then the balance is added to your collateral (rather than create dust)

« Last Edit: August 11, 2014, 07:18:11 pm by bytemaster »
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline alt

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When a COVER order lacks sufficient XTS all trades stop until someone sells their USD at the cover price. 
what if no one will ever sell at this price? why would anyone agree to loose some of his/her profit for a market rule?
yes, when BTS price drop from 1300$ to 500$(it happened in BTC), the market will freeze, maybe from last year to today...

Offline alt

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I have no doubt that market consensus will make bitusd track the price of USD.
but the rules with leak will break the market consensus.
the rules with too many limit will stop the market consensus.

I think we should make a rule with  less limit, and without leak.
here is my solution.
the main different is the short bitusd is separate from bid XTS.
for example:
If I want to short 100 bitUSD with price 1bitUSD/xts, I need to  freeze 200 XTS, and I can get 100  bitUSD immediately.
then I can usd these bitUSD to buy XTS with a different price, for bit order. maybe 0.5 bitUSD/XTS or whatever, there is no limit for the price of bid order.
the same, there is no limit for the price of ask order. there is no limit for the market depth check.

the key is to limit the short price.
the maximum  short price is coming from the minimum matched bid price of latest blocks(maybe latest 24*60*6 blocks).
at the beginning there is no matched bid price, we can set a safety initial limit price, come from the central trade market, like 0.01USD/XTS.


« Last Edit: August 11, 2014, 11:13:47 am by alt »

Offline gordonhucn

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When a COVER order lacks sufficient XTS all trades stop until someone sells their USD at the cover price. 
what if no one will ever sell at this price? why would anyone agree to loose some of his/her profit for a market rule?

Offline taoljj

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BTS      Witness: delegate.taoljj

Offline taoljj

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Such an important rule, no discussion.

Should find some person familiar financial derivatives transactions to discuss.
Futures and so on markets are very mature.
BTS      Witness: delegate.taoljj

Offline alt

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I'm sorry, I have missed this thread.

Offline tonyk

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I think if that person need to hold the BitUSD for a while and sell on the market themselves. He can achieve this by placing short orders and ask orders the same time, you need to double collaterals to create BitUSD at current market price anyway.

There is a 'funny' consequence of this.
The best way to place your order is to do that first.
And then place market cover...
...front-running welcome back. ['get what you asked for' usefulness ~ 0, in this regard]


PS
It is a challenging enough to invent new markets. There is little need to reinvent market rules at the same time as well.
« Last Edit: August 08, 2014, 10:50:41 pm by ʞʎuoʇ »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.