Main > Stakeholder Proposals

Issuer-specified feed authority for market-based UIA's

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fluxer555:
Perhaps I'm off-base, but I feel that an implementation of Truthcoin (prediction markets) into BitShares would go hand-in-hand with this.

arhag:
I don't get this. Is this a user-issued asset (UIA) or a market-issued asset (BitAsset)?

It sounds like it is market-issued since you are talking about price feeds (meaning shorting the BitAsset into existence using BTS tied up as collateral). If it is market-issued that means it is not user-issued, correct? Meaning there is no entity that can just print more tokens into existence at will. In this case, you shouldn't be using the confusing phrase "market-based UIA".

Or do you want an issuer to coexist with shorting? What purpose would that serve?

I like your idea of an authority slate associated with a BitAsset which can be changed by a positive majority of the authorities in the slate. This authority slate also publishes feed prices (from which the median feed price is determined) and could even change the description of the asset. A special case of the authority slate would be the current 101 active delegates (think of this as the null slate). The entity that creates the BitAsset gets to define the initial authority slate for the BitAsset, but they have no further control over the BitAsset.

Furthermore, I think there should be a mechanism for the shorts and longs to come to a consensus on a change in the authority slate. I think short positions and longs should optionally be able to specify an authority slate with their transaction (similar to how BTS transactions specify a delegate slate). The blockchain can calculate the fraction L(A, B) of the supply of BitAsset B that are BitAsset longs voting in favor of a particular authority slate A. The blockchain also can calculate the fraction S(A, B) of the supply of BitAsset B (measured by dividing the BitAsset debt owed by the short position with the total BitAsset supply) that are the BitAsset shorts voting in favor of a particular authority slate A. If S(A, B) > 0.5 and L(A, B) > 0.5 for a given authority slate A and BitAsset B, the blockchain should automatically change the BitAsset B's authority slate to A.

bytemaster:
I think this is a great idea and would welcome its addition to BitShares.

I am avoiding adding NEW ideas on version 1.0 of the protocol. 

theoretical:

--- Quote from: fluxer555 on December 31, 2014, 05:01:11 pm ---I love this. Though I would re-post it in General Discussion, as not many people look in here ;)

--- End quote ---

I'm asking bytemaster to look at it and tear it apart, see if there's any room for improvement.  If we put it on the roadmap, I'm thinking a guest post on bytemaster blog would be a better way to get it to a wide audience.

theoretical:
We should also make the issuer-specified authority a slate [1] instead of an account / address.  Then the median of the feed values will be used, and a positive majority [2] of the feed authority can update the effective slate [3].

The UIA owner should also have the right to set the feed authority slate to any value, but will be able to permanently relinquish that right by publishing a transaction [4].

The idea is to allow a UIA to function at small scale with a feed managed by a small group of enthusiasts or even a single individual person.  But when the market starts to gain traction and network effects, the manager should be able to hand off control to a decentralized collective.  Then the membership of that collective should be allowed to evolve over time by consensus of its members.  The power to select the feed authority should not be given to the long holders of the UIA, because they would have an incentive to elect a feed authority that artificially inflates feed prices (in the worst case simply setting the feed to a bogus enormous valuation to cause a black swan and allow the long holders to loot all of the short holders' collateral).

[1] Internally, a slate is just a set of up to 101 accounts.  This currently is simply a size optimization to de-duplicate multiple votes for the same set of delegates.  I'm simply re-purposing the existing "published set of up to 101 accounts" functionality.

[2] "Positive majority" means "more than 50%", in other words exactly 50% is not enough.

[3] Letting a majority of the current authority slate vote for a new authority slate is not really giving them any powers they don't already have de facto, since a positive majority would be able to collude to set the median to any value anyway.

[4] Code which implements revocable UIA owner rights already exists in the develop branch and is planned for inclusion in the 1.0 hardfork.

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