Sure, I can loan to you at 90% interest, and you can choose not to use my (totally legit!) service.

Still, would it not be greed on my part?

Yeah you're right. It would be stupid greed of any business to price its product out of the market. But the market in the end will determine whether Poloniex's pricing is reasonable, and I only note Bitfinex for the same cut have over a $25m book of lending.

I'm way from an expert in this area, but for my learning, how can the Qora AT be sure that Alice has sent a valid key for Bob's Burst transaction, when it transfers the Qora to Alice and only then reveals the key to Bob. Can Bob's key fail? It must know this, I'm just not sure how.

What does the BitShares development team think of this news and what are the implications for Bitshares?

How much is left in the way of startup funds for the developers? Or is all development now dependent on dilution funds?

Tangential question, but why is minebitshares getting public funds? Is it essentially to pay the bonus payouts (5%+) on their mining earnings? Is that seen as a marketing ploy to help bring people into bitShares? The bonus payouts help those offering mining rigs into the system, but I'm wondering how this benefits the broader BitShares community. Not asking in criticism, just for clarity.

This is pretty much the same mechanism as bitUSD. The rule for granting a loan is that you have sufficient collateral. Shorts are loans (bitUSD is loancoin) and the capital pool is any crypto-asset you can control (in bitshares' case, BTS or later private collateral).

I just raised this yesterday, bitUSD can really be used for general purpose loans. Perhaps this is they key target market rather than BTS bulls:
https://bitsharestalk.org/index.php/topic,16379.msg209415.html#msg209415

Combine this with flexible collateral, and anybody can get a general purpose loan collateralised against any on-chain tokens they wish:
https://bitsharestalk.org/index.php/topic,16326.msg208798.html#msg208798

Combine this with the ability to create on-chain tokens backed by off-chain assets, such as here:
https://bitsharestalk.org/index.php/topic,15957.0.html

and then we have the ability to offer general purpose loans backed by any form of digital collateral.

BitShares needs to make a psychological jump from the status quo experimental mindset to one of imminent opportunity, that self-funds its longer term vision through profit. That's where I'd like to see the mindset move.

xiahui,

Yield flexibility would allow restoration of the peg to be guaranteed when either discounts or premiums arise. If we did not limit yield adjustments, and left it completely to the market, this could theoretically accommodate very large shifts in supply or demand instantly as you desire. Appropriately limiting the yield adjustment (0.25% was just an example, not a suggestion) should still accomplish this in a reasonable period of time. As a result of this known outcome, on both sides of the peg, I expect market makers would anticipate that by providing liquidity walls around the peg in the market, absorbing most of the initial price deviation.

I think your suggestion could help incentivise supply adjustments but there is no way to guarantee that the system fund will ever be adequate to provide the incentive required. And the supply adjustments might need to be very large if there is no change in incentive on the demand side.

(Edit May 20: another problem with your system is that once a short is paid to take the incentivised action, they can just reverse it, pocketing the incentive with no change in supply.)

Quote from: starspirit on May 16, 2015, 10:22:21 pm

In my view, assuming we can achieve it, the ultimate control mechanism is a yield that works both ways. When demand is too high relative to supply, and bitUSD is priced at a premium, yield falls (also allowed to become negative if necessary), encouraging sellers (and new shorts) until parity is returned. Then you solve all the problems mentioned -

- consumers, merchants, market-makers and shorts can all have confidence that parity is the equilibrium level, enforced by changes in yield either way
- there is no need for scheduled black swans or anything similar

We can not count on the bitusd yield. Why you hold a money, because it is stable. But if there is negative yield, it hurts for bitusd holders. Let's assume that the credit changes everytime you check it, how do you feel?
And the yield will not help peg. If bitusd is lower than usd, so the bitusd holder will get yield to cover the lost, people need not to buy more. And it is not need to short, because the short can not earn something. The earning will be eayen by yield. Thus the bitusd will keep lower than realUsd.
When the bitusd is premium, it will similiarly keep premium.

A yield, if implemented, would be market driven and automatically adjust so that at the peg, all open shorts are prepared to pay at least that yield (taking into account their own views on BTS), and all bitUSD holders are happy to hold at that yield. If bitUSD is at a discount, the yield rises to attract buyers until that balance is a achieved, and visa versa at a premium. It works just the same way as interest rates are set competitively in the banking system between depositors and borrowers (except with the bank intermediary taking a spread). So the yield would take account of all market views.

It is a good question whether negative rates would be acceptable at all, and whether we actually need it. To a small degree this seems to be the case now for fiat in US and Europe, once you account for fees. I think yield would actually vary within a band around external interest rates, reflecting arbitrage costs, and possibly other risk factors. So its mainly an issue while external rates by comparison are also low or negative, made worse by crypto being in a bear market.

Quote from: starspirit on May 15, 2015, 09:14:23 am

Quote from: merivercap on May 15, 2015, 06:41:16 am

It seems to be better than unlimited forced-settlement, but it seems over-complicated and I don't have as much fear as you in regards to the peg.  Did you check out: https://www.transwiser.com/?  That's the only CNY:bitCNY market I know and it's pretty much 1:1. 

Is there an English version? Unfortunately I can't read Chinese. But it seems to be a gateway rather than an exchange. So its not a free market?

Lol.  You can use google translate, but you can see the exchange rates w/o translation. Free market?  A gateway is an exchange.  People buy or sell voluntarily... Not sure what you mean exactly...

I'm making some educated guesses here about how gateways operate. In free markets relative supply and demand can be measured by a floating price. Gateways on the other hand may adopt a fixed price for promotional purposes, or out of faith that the free market will hover around parity. So you wouldn't immediately see lopsided market demand in their price, only in their inventory. Ultimately they have to adjust to meet the market price, but for quite a long time they could hold their fixed prices somewhere different until it is clear that their inventories can't sustain it any longer. [I don't know how transwise manage things internally, but there is some insight here... https://bitsharestalk.org/index.php/topic,15759.msg202527.html#msg202527]

I suspect the best comfort we could offer gateways and other market makers is a commitment to having the mechanisms in place to restore parity when prices drift. That way they can be assured of being able to offset their inventory in the market when required and being able to maintain their prices around that. But it would be useful to get the view from gateways themselves.