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This is great stuff.Would combining this with BitBTC shorted with BitUSD as collateral (shorting BitAssets with other BitAssets is still a future feature I presume?) help? That way you can short as much BitBTC as BTC you have on the exchange for your market maker bot and so the net effect is that you are not exposed to the price volatility of BTC (with the cost that you have only 1/4 of the total value you put up for market making for each side of the BitUSD/BTC exchange).Since many of us are BTS bulls and are already exposed to BTS anyway, we can get close to this with the current client by simply shorting BitBTC with BTS. You can have X dollars worth of BTS converted into BitUSD, X dollars worth of BTS converted into BTC (at a price of P1 USD/BTC), and 2X dollars worth of BTS put up as collateral to short X dollars worth of BitBTC. So your 4X dollars worth of BTS gives you -X/P1 BitBTC, +X BitUSD, and +X/P1 BTC. If the price of BTC falls to P2 < P1, you take the X/P1 BTC (now worth X*P2/P1 USD), convert it to X/P1 BitBTC and cover the short to get 3X dollars worth of BTS (assuming the price of BTS has not changed). Then you reshort at the new P2 price with 2X dollars worth of BTS to short sell X/P2 BitBTC. You take the other X dollars worth of BTS and trade it for X dollars worth of BTC at this new P2 price (so for X/P2 BTC). Now you can put back the buy wall for X/P2 BTC which still maintains the value of X dollars worth of BTC. If the price of BTC increased instead you can see how a similar process would allow you to maintain X dollars worth of BTC in the buy wall after covering and reshort.The problem with the above is that it assumes the price of BTS remains fixed relative to USD. This is why shorting with BitUSD as collateral would be better. But with this limitation it just means the price of the buy and sell walls in terms of USD would have to grow and shrink as the price of BTS goes up and down respectively. But if we are betting on eventually breaking away from BTC and all the other altcoins and growing the price of BTS relative to BTC and USD, this is a sensible strategy for our market making bots, isn't it? It allows the market making bots to maintain symmetric height (in dollar value) walls which do not depend on fluctuations in BTC price but do grow taller as the price of BTS grows relative to the dollar. Also keep in mind I am not including the effect of short interests here.
Please add the BitUSD/BTC pair to the Markets of BitUSD:http://coinmarketcap.com/assets/bitusd/#marketshttps://bter.com/trade/btc_bitusdThere has been $20k in volume in the past 24 hours, and this was not counted. Thank you!
@arhagAnd if you want to remain 100% long BTS (and have 1/3 (1/6 for each side) of your funds for your trading-bot operations) short the bitUSD as well.i.e.2x to short bitUSD, 2x to short bitBTC, 1x to buy bitUSD, 1x to buy BTC...
Number 4 on bter!!https://bter.com/
It's a little early to call their downfall IMO. I'm sure they still have enough to buy back all outstanding nubits.I didn't want to open source the bot because 1) I didn't want competition (but it's there now) and 2) I'm embarrassed by my code quality (but that's a bad reason)Perhaps I will open it up today or over this weekend
Quote from: Rune on January 16, 2015, 03:23:23 pmQuote from: lafona on January 16, 2015, 02:56:15 pmQuote from: Rune on January 16, 2015, 01:09:00 pmWondering what you can do to help bitshares up to the 1.0 launch?Toast has written a market maker bot for BTC/BitUSD on bter.com that Riverhead is now running (possibly others)https://bter.com/trade/btc_bitusdVolume is only 10 BTC so far, but notice the spread is around 5%. If you check out NuBits you can see that their spread is more or less the same: https://bter.com/trade/nbt_btcThis is most likely because the "trusted" custodians have lost shitloads of money by getting BTC dumped on them in the last crash, so they have widened their spread in an attempt to make money so they'll stop being a fractional reserve. This is our moment to steal their market and surpass them as _the_ 1 USD token. All we have to do is to keep our spread lower, and then pump the volume! BTC isn't crashing any more so market making at a small spread will be profitable!If you want to help BitUSD get adoption then get on bter now and start trading!!! Lets push the volume to at least 100 BTC as soon as possible!Do you have a link to the market maker bot post?No, I don't think there is any post about it. I gave 5k bitUSD to riverhead to fund his bot with. If you want to help with liquidity but don't want to run the bot yourself you can do the same, he's a trusted community member and won't mess up.If you want to run the bot yourself then get in touch with toast.Sounds interesting ..Do you know the reason @toast is not opensourcing the bot?
Quote from: lafona on January 16, 2015, 02:56:15 pmQuote from: Rune on January 16, 2015, 01:09:00 pmWondering what you can do to help bitshares up to the 1.0 launch?Toast has written a market maker bot for BTC/BitUSD on bter.com that Riverhead is now running (possibly others)https://bter.com/trade/btc_bitusdVolume is only 10 BTC so far, but notice the spread is around 5%. If you check out NuBits you can see that their spread is more or less the same: https://bter.com/trade/nbt_btcThis is most likely because the "trusted" custodians have lost shitloads of money by getting BTC dumped on them in the last crash, so they have widened their spread in an attempt to make money so they'll stop being a fractional reserve. This is our moment to steal their market and surpass them as _the_ 1 USD token. All we have to do is to keep our spread lower, and then pump the volume! BTC isn't crashing any more so market making at a small spread will be profitable!If you want to help BitUSD get adoption then get on bter now and start trading!!! Lets push the volume to at least 100 BTC as soon as possible!Do you have a link to the market maker bot post?No, I don't think there is any post about it. I gave 5k bitUSD to riverhead to fund his bot with. If you want to help with liquidity but don't want to run the bot yourself you can do the same, he's a trusted community member and won't mess up.If you want to run the bot yourself then get in touch with toast.
Quote from: Rune on January 16, 2015, 01:09:00 pmWondering what you can do to help bitshares up to the 1.0 launch?Toast has written a market maker bot for BTC/BitUSD on bter.com that Riverhead is now running (possibly others)https://bter.com/trade/btc_bitusdVolume is only 10 BTC so far, but notice the spread is around 5%. If you check out NuBits you can see that their spread is more or less the same: https://bter.com/trade/nbt_btcThis is most likely because the "trusted" custodians have lost shitloads of money by getting BTC dumped on them in the last crash, so they have widened their spread in an attempt to make money so they'll stop being a fractional reserve. This is our moment to steal their market and surpass them as _the_ 1 USD token. All we have to do is to keep our spread lower, and then pump the volume! BTC isn't crashing any more so market making at a small spread will be profitable!If you want to help BitUSD get adoption then get on bter now and start trading!!! Lets push the volume to at least 100 BTC as soon as possible!Do you have a link to the market maker bot post?
Wondering what you can do to help bitshares up to the 1.0 launch?Toast has written a market maker bot for BTC/BitUSD on bter.com that Riverhead is now running (possibly others)https://bter.com/trade/btc_bitusdVolume is only 10 BTC so far, but notice the spread is around 5%. If you check out NuBits you can see that their spread is more or less the same: https://bter.com/trade/nbt_btcThis is most likely because the "trusted" custodians have lost shitloads of money by getting BTC dumped on them in the last crash, so they have widened their spread in an attempt to make money so they'll stop being a fractional reserve. This is our moment to steal their market and surpass them as _the_ 1 USD token. All we have to do is to keep our spread lower, and then pump the volume! BTC isn't crashing any more so market making at a small spread will be profitable!If you want to help BitUSD get adoption then get on bter now and start trading!!! Lets push the volume to at least 100 BTC as soon as possible!
Quote from: Rune on January 16, 2015, 03:12:46 pmWith 5% spread it should be easy enough. In the future we could actually run nubot style "BitBots" that can enforce a much tighter peg and be guaranteed to be profitable, using the method the nubitters described here after they realized that they've become insolvent and their peg is doomed: https://discuss.nubits.com/t/possible-solution-to-custodian-loss-of-value-due-to-btc-exposure/1099/3Increasing spread size helps compensate for losses due to adverse selection, but you can price yourself out of the market like that.
With 5% spread it should be easy enough. In the future we could actually run nubot style "BitBots" that can enforce a much tighter peg and be guaranteed to be profitable, using the method the nubitters described here after they realized that they've become insolvent and their peg is doomed: https://discuss.nubits.com/t/possible-solution-to-custodian-loss-of-value-due-to-btc-exposure/1099/3
Actually hedging their BTC is a viable strategy and if they had used that one from the start things would have looked much better for them. But at this point they are already insolvent and are operating as a fractional reserve that should soon go down in flames.A bitshares market maker could copy the hedging strategy and make a bot that could be guaranteed to be profitable as long as it operated on a 1-2% spread.
Quote from: Rune on January 16, 2015, 03:01:17 pmhttps://bitcointalk.org/index.php?topic=926934.0 lololol, they want to use 10x leverage..... hahaha this is game over ... that disqualifies Nubits as a competition to BitUSD.
https://bitcointalk.org/index.php?topic=926934.0
I'll be interest to know if you manage to break even with this strategy - market making is very hard to get right.
this summer
We will know they are in trouble when they start offering interest to park.
I didn't understand any of the equations Nubits used, I can only do A+B=C. But it seemed they gave both systems a similar failure risk, even though BitUSD is a heavily collateralised system and theirs has very little collateral and relies on a parking premium to incentivise demand. I expect their system will collapse with a significant rise in interest rates, because that signifies a significant fall in demand to the market and only then, do you have to worry about how much interest they can afford to pay and for how long they'll do it before giving up if the system is getting away from them.
Crossposted to the chinese forum in crappy chinese:https://bitsharestalk.org/index.php?topic=13376.0This has to be done as a community effort, this is our chance to finally get an easy way into bitUSD! If you have any BitUSD to spare, put it on the exchange and start market making!