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General Discussion / Re: Subsidizing Market Liquidity
« on: August 29, 2016, 01:31:52 pm »
*bump*
Any thoughts regarding my BTS liquidity bot BOINC project idea?
Any thoughts regarding my BTS liquidity bot BOINC project idea?
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Are you able to buy MUSE? Cryptofresh/coinmarketcap shows $29 having been traded the last 24hrs but I cannot see it on the BTS market..Found where I can buy muse, I've put up a fair offer of 1 SAT/MUSE.
Yeah, I don't think that handing control of price feeds to a private/unknown un-elected group is appropriate.No, not by the official BitShares committee. That wouldn't be any better. What I had in mind was a private group providing the feed, to absolve BitShares itself of any liability in case of abuse.@pc is correct. Market Pegged Assets against a thinly-traded token are a recipe for disaster and abuse. I would not recommend having this price feed managed by the elected Bitshares witnesses.When you say not managed by witnesses, would you be more comfortable with it being managed by a committee instead?
@pc is correct. Market Pegged Assets against a thinly-traded token are a recipe for disaster and abuse. I would not recommend having this price feed managed by the elected Bitshares witnesses.When you say not managed by witnesses, would you be more comfortable with it being managed by a committee instead?
No, neither of these scenarios relies on forced settlement, and you don't have to sustain the price manipulation for a significant amount of time. Only long enough for the price feed to adapt, which is typically much less than one hour.But you previously stated "This will trigger a black swan, and bitGRC holders are forced to settle at about 20% of the normal price." - how can force settlement occur without force settlement?
You'd need to sustain such a manipulation of the external trading value for the full length of the 'Force settlement delay' setting though right, which for the 'GRIDCOIN' MPA is 24hrs?Ok, so only those shorting the Gridcoin MPA would potentially be affected, not those holding the MPA (because they'd be saved by forced settlement) ?
In the scenario I described, yes, for some definition of "only".
But an attack in the opposite direction is also possible:
* Attacker short-sells a lot of bitGRC near the feed price.
* Then, he dumps the GRC price to (for example) 10% of its normal value.
* He creates another (small) short with minimum collateral, i. e. about 20% of the normal GRC price.
* Then, he pumps GRC to >20% of its normal value. This will trigger a black swan, and bitGRC holders are forced to settle at about 20% of the normal price.
What is the usecase for Gridcoin MPA? If nobody is trading the real thing, why would they want to trade MPA?We're rewarding ~1800 users, we've got 7000 in our team, there are 400k active BOINC users and 4 million registered BOINC users in total. All it would require to jump from 7000 to 400k users is removal of the team requirement in the future: https://steemit.com/gridcoin/@cm-steem/gridcoin-s-mandatory-team-requirement-should-it-stay-or-should-it-go
I'm not talking about settlement.Ok, so only those shorting the Gridcoin MPA would potentially be affected, not those holding the MPA (because they'd be saved by forced settlement) ?
Suppose that the feed price is derived from external exchanges, that the total trade volume on these exchanges is low (as seems to be the case right now).
Suppose that external exchanges have not only low volume but also little liquidity and possibly a high spread (I haven't checked this). That means it is possible to move the price by a large amount with only little trade volume.
* An attacker with sufficient BTC in their pockets would try to buy up as many bitGRC on OpenLedger as he can get, at a price slightly above the feed. This may take a couple of days.
* Immediately before the attack, the attacker examines the short positions and their respective collateral. For each short position, he computes the black swan price.
* To execute the attack, the attacker positions a sell order for each short near the black swan price.
* Then he starts "manipulating" the price on the external exchanges.
* As the price of GRC goes up and takes the feed with it, the short positions will be margin called and will buy into the existing sell orders, consuming (almost) their entire collateral.
The attack is profitable if the cost for price manipulation is low in comparison to the value of the bitGRC the attacker has amassed.
The price manipulation attack has been considered before. AFAIR bm's response was that the attacker will end up with BTS that's worth less than what the attack costs. This argument is valid when you try to manipulate the price of BTS against FIAT, or against a high-volume currency like BTC. However, I think with a low-volume asset the attack can be profitable, in particular because the price of BTS itself is not damaged by the attack.
Guys,Could this be negated by changing the "Max force settle vol" and "Force settlement offset" variables? Could you elaborate on your concerns? The bitshares documentation doesn't cover any of this.
this is dangerous. CMC shows the total trade volume of GRC in the last 24 hours to be less than 3k USD. An attacker who is long in bitGRC can easily steal collateral by manipulating the external trade price.