SummaryBitshares is an exchange that requires liquidity to generate profits and a larger user base. We have up until now, poorly managed our partnerships with those that provide liquidity to the underlying BTS market and to the bitasset markets. It is necessary that going forward we have
a well organized team that can maintain relationships with liquidity providers as well as generate new sources of liquidity for internal markets. I am reaching out to the community to see if there are any other members that would like to help in this endeavor.
The google docs version of this announcement can be found
hereLearning from MistakesFor the most part, everyone wanted Bitshares 2.0 to be launched as quickly as possible. Some people needed the upgrade in order to use the platform, while others just wanted to see a more marketable product that might change the direction of the BTS price. In our haste to get a product out quickly we forgot about the central service that Bitshares seeks to provide: a blockchain based exchange platform that can compete against centralized platforms. The most crucial factor to reach that end, is the maintenance and growth of liquidity on the exchange.
Without liquidity, it doesn’t matter how good the code is or how much effort we put into marketing and referrals, people simply will not use this platform. This is one of the reason the BTS price has languished, particularly since the upgrade.
Upon upgrading, we didn’t consider the importance of having liquidity providers simultaneously upgrading as well. We lost our exposure to the chinese market, which has recently increased their appetite for Bitcoin and other cryptocurrencies traded on chinese exchanges. We lost our main sources of external liquidity for bitassets. Consequently, there is very little trading volume on the internal exchange.
Going ForwardUnderstanding that exchanges and gateways are our implicit partners, we should manage those relationships accordingly. Our business operations are adversely affected by exchanges going down or failing to upgrade with a continually changing API. In order to maintain these relationships, we need dedicated teams that are actively communicating with exchanges, gateways and market makers. Furthermore, we need to actively seek out new relationships with liquidity providers.
The Exchange Business Management Team I would like to spearhead the assembly of an Exchange Business Management (EBM) team, the goal of which is to maintain and grow liquidity on the Bitshares exchange. To do this we need to publicly coordinate our relationship with exchanges, gateways and bridges. Once these relationships are established we need to encourage and incentivize exchanges to transition to gateways and bridges that provide liquidity on the internal exchange. Furthermore, we need to encourage these gateways to accept bitassets at face value (with a small fee) so that we can centralize liquidity into a few a markets rather than many disparate markets that overcomplicate the Bitshares trading experience.The last role of the EBM team would be to incentivize market makers to provide liquidity on the internal exchange.
The following is a list of our current liquidity sources and the level of integration they have with the bitshares exchange:
Exchange | BTS Market | Bitasset Markets | Gateway | Bridge | Goal |
Blocktrades | Yes | No | Yes | No | Get Blocktrade to provide bridge for BTC / BitBTC market. |
Btc38 | Yes | No | No | No | Get Btc38 to issue a UIA, BTC38.CNY, that is accepted means of deposit and withdrawal. Get Btc38 to allow for withdrawals of BitCNY. |
Bittrex | Yes | No | No | No | Get Bittrex to open up bitasset markets on their platform. |
CCEDK | Yes | Yes | Yes | No | Get CCEDK to provide fiat gateway (primarily for USD) as well as fiat to bitasset bridge. |
Metaexchange | Yes | No | Yes | No | Get Metaexchange to provide bridge services. |
Poloniex | Yes | No | No | No | Get Poloniex to integrate BitCNY and BitUSD. |
Transwiser | No | Yes | Yes | Yes | Get Transwiser to to facilitate the deposit and withdrawal process of BitCNY on Yunbi as well as withdrawal process of BitCNY from Btc38. Get Transwiser integrated into bitshares deposit and withdrawals page. |
Yunbi | Yes | Yes | No | No | Get Yunbi to issue UIA, YUNBI.CNY as well as accept deposits and withdrawals of BitCNY as CNY. |
EBM Team Roles- Representatives
- Software Specialist
- Market Analysts:
RepresentativesRepresentatives communicate directly with liquidity providers to ensure a continued and growing relationship with these partners. Representatives must keep exchanges, gateways and bridges, abreast of any changes that might affect them, while also conveying to exchanges the opportunities afforded by further integration with Bitshares. At the end of the day, we want all of these sources of liquidity to be more integrated into the internal markets as well as profit from doing so. Representatives must then publically report the current state of our relationship with a given liquidity provider, what it would take to generate further integration and how the EBM team plans to execute to achieve that goal.
Software SpecialistSoftware specialists are representatives who are familiar with interfacing with the Bitshares software as well as exchange APIs and can provide support to liquidity providers that are attempting to integrate with Bitshares. They onboard liquidity providers, from exchanges to market makers, and ensure that these partners are always in sync with current Bitshares network.
Market AnalystsMarket analyst observe the volume and the trading occurring on each market. They report on the "health" of each market, both internally and externally. In this way, we can better identify which markets are lagging and how we can improve the efficiency of those markets. These reports and analysis will also be used in demonstrating to partners which markets will be most attractive for them to enter into.
ConclusionI am currently looking for a team of 8 to 10 community members that can help with managing this process and achieving the aforementioned goals. I personally am not looking for any compensation. I just want to help bootstrap these markets so we can give Bitshares a fighting chance. I am sure that if we do achieve these goals, BROWNIE.PTS and additional recompense will be provided. If you can, please reach out and help. At the very least, please contribute to the discussion. I will be posting my analysis of some of these liquidity providers and the potential opportunities we can pursue with them in subsequent threads.