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On The Importance of Bit.GOLD
pc:
--- Quote from: armin on September 27, 2018, 10:56:07 pm ---
--- Quote from: pc on September 27, 2018, 12:21:25 pm ---There are no shorts because both have black-swanned early this year. Interestingly, the markets seem to be ignoring this.
--- End quote ---
can you elaborate on what you mean by "the markets seem to be ignoring this"? is there a more efficient position the market can take on bit.GOLD currently?
--- End quote ---
http://cryptofresh.com/a/GOLD
Settlement price is 4,753 BTS/GOLD, that's the exact amount of available backing collateral per bitGOLD.
However, market price is around 10,000 BTS/bitGOLD with a significant spread (highest buy is offering more than 9,500 BTS).
--- Quote from: bench on September 27, 2018, 11:11:32 pm ---The bitGold and bitSilver are not any longer backed by BTS or no longer need to be backed by BTS because of the black swan?
How was the black swan solved?
--- End quote ---
Each bitGOLD is backed by 4,753 BTS. The black swan was not resolved, it still persists.
--- Quote from: bench on September 27, 2018, 11:11:32 pm ---
The black swan comes when one collateral is under the ratio of one. Are they any thoughts how we can prevent the market from an individual?
Maybe we should set the min. call ratio to 2.0 for bitSilver, bitGold and bitBTC?
--- End quote ---
Changing MCR at this time will not help.
--- Quote from: bench on September 27, 2018, 11:11:32 pm ---How can we increase the supply of bitGold and bitSilver without borrowing?
--- End quote ---
We can't. They need to be revived first, which is unlikely to happen before BTS price recovers to the level it had earlier this year.
armin:
Yes actually this will be a good idea @bench. Less liquid bitassets should have higher MCR since they are less likely to have their margin calls bought (less liquidity). The higher MCR will make black swans less likely. On the contrary, highly liquid bitassets like bitCNY should have a lower MCR.
bench:
The bitGold and bitSilver are not any longer backed by BTS or no longer need to be backed by BTS because of the black swan?
How was the black swan solved?
The black swan comes when one collateral is under the ratio of one. Are they any thoughts how we can prevent the market from an individual?
Maybe we should set the min. call ratio to 2.0 for bitSilver, bitGold and bitBTC?
How can we increase the supply of bitGold and bitSilver without borrowing?
armin:
--- Quote from: pc on September 27, 2018, 12:21:25 pm ---
--- Quote from: bench on September 27, 2018, 01:25:20 am ---There are no margin positions on bitGold or bitSilver now.
--- End quote ---
There are no shorts because both have black-swanned early this year. Interestingly, the markets seem to be ignoring this.
--- End quote ---
can you elaborate on what you mean by "the markets seem to be ignoring this"? is there a more efficient position the market can take on bit.GOLD currently?
armin:
I said it incorrectly @thul3. I meant we need to increase liquidity on Bit.GOLD so that when people want to be short crypto they can escape to Bit.GOLD. Holding Bit.GOLD is better than bitFIAT since it is not depreciating
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