I've foreseen the situation when drafting BSIP42, see
https://github.com/bitshares/bsips/blob/master/bsip-0042.md#uptrend-and-discount
. In short, a static force settlement offset is not quite compatible with
BSIP42 when a bitAsset is oversupplied. BSIP42 aims to let debt position
holders reduce debt at market/fair price, but not at higher price to punish
them. If we agree with BSIP42, we either need to adjust force settlement offset
dynamically, or disable force settlement temporarily.
In fact, I came to the same conclusion. Sorry it took so long.
I think we all agree that BSIP42 leads to force settlement being **overly**
expensive to shorters. I also believe that "disabling" settlement can only
be a termporary solution until dynamic MCR can be used.
Instead of disabling it, why don't we reduce the percentage of supply that can
be settled per maintenance interval to something small? That would discourage
longs from using settlement but would still keep the option open.
I've explained why disabling force settlement is doable in this thread
https://bitsharestalk.org/index.php?topic=27170.0 . I'm not going to explain
again. I'm not going to push anything. It's no fun.
I feel very very disappointed now.
Sorry for that, my fault.
After experimented BSIP42 for 2 months, which has shown obvious effects towards
a tight peg, people still didn't understand the ins and outs, including the
ones who appeared to support BSIP42 (e.g. Fabian @xeroc), not even mentioning
the ones who voted "NO" without even written anything in this forum. All
discussions came to a dead end. No progress. Nothing. Not even a valid
argument. When people just say no but don't tell you why, how you can improve?
We're all 5? It's that hard to discuss rationally? It's that waste of your time
to learn a bit more?
I am sorry to appear reluctant and "slow" when it comes to understanding market
dynamics. As you know, I do not have an economics background. Still, being a
proxy it is a requirement to *understand* what I am doing. Given the amount of
time that I have put into understanding and even defending BSIP42 in the community
makes it odd you are calling me out :-/
OK, some of you asked for a fix for the MCR issue. I've submitted the code (the
fix) to github 2 months before, whoever wants to test it and
push it online can go ahead, or write your own fix.
This is great news, I didn't know that. How can we make sure this
makes it into the next upgrade?
Actually, adjusting MCR is
effectively the same as adjusting price feed + force settlement offset,
so, before the fix is online, we can do something to keep things going,
however, whether to do and what to do also depends on you.
... except that adjusting MCR allows to keep the price feed reflect the 'actual
price'.
Update: Properly punishing debt position owners when a bitAsset is oversupplied
is fine, since it encourages them to reduce supply proactively. From this point
of view, forced settlements can still play a role in the game, although it can
be replaced by forced margin calls. The thing is, target CR doesn't apply when
a debt position is being forced settled, so, not like margin calls which evenly
apply to all positions with (relatively) low CR, force settlements may punish a
few positions too hard, but don't punish other positions at all, so it's IMHO
not a fair enough rule.
I am still trying to figure out if incentives can be aligned for both sides
(shorts and longs) in bearish **and** bullish markets. IMHO, the ultimate goal
is to have a system where merely personal *opinion* about the market leads to
"taking" a side and not market-internal mechanics.