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Offline bytemaster

One way or another the PEG will be established...
« on: August 28, 2014, 06:42:20 PM »

I just want to make it clear that we will use price feeds if necessary to establish the peg.

BitUSD will eventually get to USD parity because otherwise this network will be worthless.

Delegates, please publish price feeds for USD just in case.   I think we may need slightly stronger training wheels. 

Those who buy USD will eventually see your gain to parity.

We have many tools at our disposal to make this happen.

 
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Offline xeroc

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Re: One way or another the PEG will be established...
« Reply #1 on: August 28, 2014, 06:45:00 PM »
We have many tools at our disposal to make this happen.
On the one hand I am excited to see all of those .. on the other I hope we won't need all of those :)
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Offline puppies

Re: One way or another the PEG will be established...
« Reply #2 on: August 28, 2014, 06:45:56 PM »
Published.  Also I heard Xeroc had a way to autopublish if the price swings +/- 5%.  Can anyone shed any light on that?
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Offline xeroc

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Re: One way or another the PEG will be established...
« Reply #3 on: August 28, 2014, 07:03:48 PM »
Published.  Also I heard Xeroc had a way to autopublish if the price swings +/- 5%.  Can anyone shed any light on that?
not me .. must be someone else ..

bitsuperlab has a update script .. but that is more of a cronjob afaik
https://github.com/Bitsuperlab/operation_tools/tree/master/btsxfeed

//edit: was wrong ... alt made that tool .. checks for +-5%
https://bitsharestalk.org/index.php?topic=7787.0
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Offline puppies

Re: One way or another the PEG will be established...
« Reply #4 on: August 28, 2014, 07:06:59 PM »
Thanks Xeroc.

And thanks Alt if you are reading this.
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Offline bytemaster

Re: One way or another the PEG will be established...
« Reply #5 on: August 28, 2014, 07:43:53 PM »
The primary tool we have at our disposal is to implement a market maker algorithm into the blockchain based upon the median feeds of the delegates.

It would automatically buy BitUSD at .95 and sell BitUSD at 1.05 and then we would limit shorts to 1.05. 

The impact this would have on the network:
1) When demand to sell BitUSD is high the network is buying at .95 with new BTSX
2) Shorts would be unable to sell at .95... so they would have to first buy at 1.05
3) This establishes a 10% initial fee for any shorts and gives longs a priority in selling.
4) As the price fluctuates between those who want into or out of BitUSD the network makes money.

The network will end up with USD on its balance sheet proportional to the "surplus short demand" and the XTS created to buy this USD is actually locked away in the collateral of the shorts.   Thus we can safely say that printing XTS to perform this market making algorithm will not create additional XTS in circulation. 

We can quibble about the spread.

This process would function much like it does today except it would make the "shareholders" more money from the built in arbitrage bot.  The built in "bot" doesn't need to predict which way the price will ultimately go... only that it will eventually change directions.   

What is the risk from running this BOT on the network?  Little that I can see right now.


1) An attacker could print USD at will provided they were willing to buy at 1.05... but they would only be able to sell back at .95 unless there was real demand.
2) An attacker would be unable to print arbitrary XTS because they would have to buy BitUSD high and then tie up the XTS in the collateral and their USD would only have guaranteed demand at .95 so when they "cover" they would get back less than they started with.

The primary down side is the requirement of a price feed.  I think if you start the BOT off with wide market maker functionality, that eventually other players will enter the market and provide tighter market maker functionality at which point in time the "feed" almost never factors into the equation.   

If this is what it takes to bootstrap the peg I am willing to do it.   Thoughts?
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 xeroc

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Re: One way or another the PEG will be established...
« Reply #6 on: August 28, 2014, 07:46:40 PM »
s/XTS/BTSX/g

a built in arb bot .. that sounds interesting... need to think about it
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Offline GaltReport

Re: One way or another the PEG will be established...
« Reply #7 on: August 28, 2014, 07:49:59 PM »
I get an assert exception trying to publish  feed.

Offline dominic

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Re: One way or another the PEG will be established...
« Reply #8 on: August 28, 2014, 07:56:09 PM »
Since 0.4.9, I've been completely unable to access the BitUSD market... I can only guess as to what is happeing, but it sounds like BitUSD is getting heavily shorted. (Edit: with 0.4.9-a I was able to view the markets again.)

I have a possible explanation: It would appear the BTSX market has bottomed, and many traders feel that a strong rebound in price is now imminent. The Chinese have been calling for 0.18 CNY for days, and their target has finally been hit. It's an important technical level, and strong support has been shown. It seems to me that traders with a high level of confidence in a large price increase seem determined to short at almost any price, and people just can't place bids fast enough to keep up with it. We just don't have enough players in the game -- yet.

It's speculation of course, but I wanted to mention this so that people can see there isn't necessarily anything "wrong" with the way the market is operating -- we just need more people to be active in this market. This doesn't happen overnight, especially with the technical issues we've seen. With more participants, I can't see why the peg wouldn't hold.

After the wallet is working better, I am sure all will be well in time. I have every bit of confidence that these bugs in the wallet will be ironed out, so I'm not too concerned about that.
« Last Edit: August 28, 2014, 07:58:05 PM by dominic »

Offline BldSwtTrs

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Re: One way or another the PEG will be established...
« Reply #9 on: August 28, 2014, 07:59:49 PM »
The primary down side is the requirement of a price feed.
Why is this a downside? I mean why having a price feed is bad per se?

Offline MolonLabe

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Re: One way or another the PEG will be established...
« Reply #10 on: August 28, 2014, 08:01:06 PM »
From libertarianism to democracy to oligarchy to tyranny, even faster than I expected.

Offline GaltReport

Re: One way or another the PEG will be established...
« Reply #11 on: August 28, 2014, 08:01:21 PM »
Since 0.4.9, I've been completely unable to access the BitUSD market... I can only guess as to what is happeing, but it sounds like BitUSD is getting heavily shorted.

I have a possible explanation: It would appear the BTSX market has bottomed, and many traders feel that a strong rebound in price is now imminent. The Chinese have been calling for 0.18 CNY for days, and their target has finally been hit. It's an important technical level, and strong support has been shown. It seems to me that traders with a high level of confidence in a large price increase seem determined to short at almost any price, and people just can't place bids fast enough to keep up with it. We just don't have enough players in the game -- yet.

It's speculation of course, but I wanted to mention this so that people can see there isn't necessarily anything "wrong" with the way the market is operating -- we just need more people to be active in this market. This doesn't happen overnight, especially with the technical issues we've seen. With more participants, I can't see why the peg wouldn't hold.

After the wallet is working better, I am sure all will be well in time. I have every bit of confidence that these bugs in the wallet will be ironed out, so I'm not too concerned about that.

For sure, the wallet issus are affecting the market.  Not sure if it should really be operating when it seems that many people can't access it.  I was using it all the time but have spent the last day it seems trying to get a working wallet.  0.4.9a is still 17 days behind and going SLOW and crashes when I try to do things in the console or check my delegate...Can't be surprised to see perverse effects as a result.  My only question is if this is an accident or part of someone's plan?  I also see some perverse pricing in bter. 

When you spend time trying to move in and out out BTSX, BitUSD and BTC or USD, you eventually feel like you are moving in a circle.  That's why we need to get stable and in more exchanges so that there are more options for people.  "One" can only control so many things.  Easiest if you are limited in your options.

Either the testing and/or change/release mgmt. is bad or maybe there is something intentional going on.  Maybe the market should be paused?
« Last Edit: August 28, 2014, 08:06:21 PM by GaltReport »

Offline oldman

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Re: One way or another the PEG will be established...
« Reply #12 on: August 28, 2014, 08:03:16 PM »
The primary tool we have at our disposal is to implement a market maker algorithm into the blockchain based upon the median feeds of the delegates.

It would automatically buy BitUSD at .95 and sell BitUSD at 1.05 and then we would limit shorts to 1.05. 

The impact this would have on the network:
1) When demand to sell BitUSD is high the network is buying at .95 with new BTSX
2) Shorts would be unable to sell at .95... so they would have to first buy at 1.05
3) This establishes a 10% initial fee for any shorts and gives longs a priority in selling.
4) As the price fluctuates between those who want into or out of BitUSD the network makes money.

The network will end up with USD on its balance sheet proportional to the "surplus short demand" and the XTS created to buy this USD is actually locked away in the collateral of the shorts.   Thus we can safely say that printing XTS to perform this market making algorithm will not create additional XTS in circulation. 

We can quibble about the spread.

This process would function much like it does today except it would make the "shareholders" more money from the built in arbitrage bot.  The built in "bot" doesn't need to predict which way the price will ultimately go... only that it will eventually change directions.   

What is the risk from running this BOT on the network?  Little that I can see right now.


1) An attacker could print USD at will provided they were willing to buy at 1.05... but they would only be able to sell back at .95 unless there was real demand.
2) An attacker would be unable to print arbitrary XTS because they would have to buy BitUSD high and then tie up the XTS in the collateral and their USD would only have guaranteed demand at .95 so when they "cover" they would get back less than they started with.

The primary down side is the requirement of a price feed.  I think if you start the BOT off with wide market maker functionality, that eventually other players will enter the market and provide tighter market maker functionality at which point in time the "feed" almost never factors into the equation.   

If this is what it takes to bootstrap the peg I am willing to do it.   Thoughts?

I think this would be a desirable feature; as the Bitshares ecosystem grows there will be many illiquid/thinly traded assets that would benefit from an automated/benevolent arb bot. Should expedite the bootstrapping process.

Plus, revenue.

My vote is to implement and see if it helps or hinders the market.

Offline bytemaster

Re: One way or another the PEG will be established...
« Reply #13 on: August 28, 2014, 08:03:21 PM »
From libertarianism to democracy to oligarchy to tyranny, even faster than I expected.

:(  that is an interesting point of view... and I see your parallels.
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 liondani

Re: One way or another the PEG will be established...
« Reply #14 on: August 28, 2014, 08:04:13 PM »
I get an assert exception trying to publish  feed.

as I see your delegate is not active... thats why.... (it is standby) :(
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