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Quote from: yvv on April 22, 2017, 09:27:37 pmQuote from: nmywn on April 22, 2017, 08:12:29 pm@yvv because he's thinking how to improve user experience through automation in GUI , not about changing contract design. If order is not filled and market moves wrong direction then you have margin call.This is exactly a problem which automation should solve. It should close all margin orders when a margin call is triggered. Why do you want to close them before?Margin calls execute at 10% above the price feed, i. e. the shorter is punished for not managing his position properly.
Quote from: nmywn on April 22, 2017, 08:12:29 pm@yvv because he's thinking how to improve user experience through automation in GUI , not about changing contract design. If order is not filled and market moves wrong direction then you have margin call.This is exactly a problem which automation should solve. It should close all margin orders when a margin call is triggered. Why do you want to close them before?
@yvv because he's thinking how to improve user experience through automation in GUI , not about changing contract design. If order is not filled and market moves wrong direction then you have margin call.
You have to remember that unlike Poloniex bitshares is a blockchain based exchange which imposes some limitations on what is feasible in terms of performance. Most if not all the changes you're talking about here would require a hard fork, but I can't judge if they're even technically possible.
One idea that I like is being able to close your position by using the collateral you've already set aside, I suspect the reason for that is the lack or market orders. However, that could be worked around by an operation that placed a limit order with a high enough price that it would just walk the orderbook. It would need to be a fill-or-kill order so that it fails of it can't get filled completely.
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You need to try margin trading at other exchanges to see how screwed is bitshares shorting. I tried shorting at poloniex last night, and now very regret that I did not try this earlier, because it makes so much more sense than shorting in BTS. At poloniex, you deposit 1 BTC, and this allows you to short 2.5 BTC worth of any assets by simply placing sell orders. When your order is filled, BTC which you got from short selling, is added to your initial deposit to back up the debt which you just created. You settle your debt by simply placing a buy order. When it is filled, your collateral is transferred to other party and your debt is settled. This is how margin trading is actually supposed to work. You deposit only 40% collateral upfront, but your position is 140% collateralized. The guys who coded shorting in BTS clearly had no clue what are they doing. To issue bitAsset, we need to deposit a double collateral upfront, and to settle the debt we need to deposit 100% on top of double collateral. This is ridiculous and defeats the whole purpose of margin trading, which is to trade large amount with small funds. MPA is a very nice concept, which is buried under flawed implementation. Shorting is a central piece of BTS monetary system, but it is totally screwed. This has to be fixed ASAP. BTS shareholders should hire somebody who has expertise in developing trading software, pay them well through worker and let them fix shorting and all other flaws. Before this is done, don't dream about mass adoption, because other exchanges offer much cleaner products.
Yes, technically my debt would be 5 bitUSD but if I understand it correctly, it works differently right now. My account would have 5 bitUSD and 10 bitUSD debt, in the case of margin call, whole 10 bitUSD would be settled and I would still have my 5 bitUSD in my account, wouldn't I?
Your proposal suggests "normal" and "margin" accounts - I'm not sure how difficult would it be to implement.
I completely agree, this might be the first candidate for improvement. Would it require a hard fork? How to handle already-open positions? Could we implement it iteratively, e.g. handle collateral for bitUSD and bitCNY as one unit, it it's stable, add bitBTC, bitSILVER etc?
Quote from: paliboy on April 21, 2017, 07:11:37 amLet's say that I borrowed 10 bitUSD @ 100 BTS with 2000 BTS collateral and then sold it for 10x100 BTS.I buy 5 bitUSD @ 84 BTS in market, half of the debt could be automatically settled - do we want to do it? How would it adjust the collateral? Proportionately or should it keed some platform-defined/user-defined collateral ratio?If you were 10 bitUSD short and you bought back 5 bitUSD, you owe only 5 bitUSD. You want it or not does not matter, your debt is 5 bitUSD, that's the fact.
Let's say that I borrowed 10 bitUSD @ 100 BTS with 2000 BTS collateral and then sold it for 10x100 BTS.I buy 5 bitUSD @ 84 BTS in market, half of the debt could be automatically settled - do we want to do it? How would it adjust the collateral? Proportionately or should it keed some platform-defined/user-defined collateral ratio?
Quote from: paliboy on April 21, 2017, 07:11:37 amI want to settle half of my debt, I click "Update position" in "Margin Positions" in Bitshares wallet, enter 5 into Debt input box and click "Update positon" button. Network buys necessary assets for me at market rate and updates the collateral ratio - the same problem as in point 1.None of these "borrow asset" or "update position" buttons are needed. Margin trading is not different from regular trading except for the amount of funds available to spend. You should be able to run a regular trading bot on margin account, which knows only "buy" and "sell" operations the same way as you run it on regular account, and exchange engine should open and close position for you when needed up to the limit defined by your margin deposit. Check polo, coinbase, bitfinex, everywhere you don't "borrow" or "update", you just buy and sell. This makes a lot of sense to me.
I want to settle half of my debt, I click "Update position" in "Margin Positions" in Bitshares wallet, enter 5 into Debt input box and click "Update positon" button. Network buys necessary assets for me at market rate and updates the collateral ratio - the same problem as in point 1.
Edit: Oh, and you don't need to keep a separate deposit for each opened position, because it is a ratio of total equity to total dept which matters. If your MCR=2 and you are short in bitUSD and bitSilver with 2.2x collateral, and bitSilver goes up by 10%, there is no need to trigger a margin call yet, because your deposit is still enough to back both positions.
I wouldn't call this "workarounds", better would be "not obvious". . I gues when you're closing position on polo it execute margin call.
Quote from: nmywn on April 20, 2017, 09:33:54 pm I understand that polo way is basically the same (just in different order), but much easier for use and have less friction. Yes, this is what I am talking about. Just forget about their higher leverage for a moment (although this is also important factor). The hole process of shorting at polo is one simple action: you place a sell order. To settle your debt, you place a buy order. The final result is the same as in BTS, but everything is seamless, and you don't need to make unnecessarily high deposits. The mechanics behind this is very simple, and I don't see a reason why it should not work at DEX. You can still use your bitAssets as money, i.e. buy/sell/transfer etc. The amount of collateral which you need to put upfront depends on the price at which you short sell your asset. If you short at feed price, you need to put only MCR-1 upfront, because the rest you get when you sell your asset, and before that you don't have no dept. If you sell at premium, you need to put less upfront, if you sell at discount, you need to put more. If you want to short, but don't want to sell, you need to put entire collateral upfront and then do what you want with your asset, same as you do now.Same goes with closing position. It is ridiculous that you need to deposit additional funds on top of collateral to settle your debt on DEX, or find other workarounds, because the only purpose of collateral is to be used to settle the debt. And again, the amount of collateral which you need to spend depends on the price at which you buy back you debt, cheaper you buy, less you spend. If somebody kindly sends you bitAsset for free, you just keep your collateral.
I understand that polo way is basically the same (just in different order), but much easier for use and have less friction.
Same goes with closing position. It is ridiculous that you need to deposit additional funds on top of collateral to settle your debt on DEX, or find other workarounds, because the only purpose of collateral is to be used to settle the debt. And again, the amount of collateral which you need to spend depends on the price at which you buy back you debt, cheaper you buy, less you spend. If somebody kindly sends you bitAsset for free, you just keep your collateral.
Well said. I wonder why @yvv didn't respond to this.IMHO current design of MPA is not for high-risk seeking traders, but the opposite.If we want to attract high-risk seeking traders, we need other products (done by 3rd party or not).
What if creating a MPA and shorting an asset are two different features? Maybe we just need to build an additional shorting feature like on Poloniex for only that purpose?
Quote from: yvv on April 20, 2017, 02:35:19 pmQuote from: Thom on April 20, 2017, 01:24:24 amThe leverage you like so much is merely an illusion of safety made attractive by potential profits. That safety will evaporate faster than a bot can place an order when the inevitable collapse begins.You didn't even understand what am I talking about. Yes, I like leverage, because this is what gives motivation to short assets instead of just holding them. And since MPA are created through shorting, no shorting means no liquidity. Let's forget about it for a moment. Suppose we are fine with 1:1 leverage, then BTS shorting is still screwed. You still need to put unnecessary high amount funds when you open and close position. How does this make BTS more safe than polonoiex? I say, it does not. In fact, it hurts BTS a lot.Yvv is correct that the way the current system is designed, it is cumbersome and confusing to short and trade... pair that with the lack of order types (Take profit, stop loss) and you have something that isn't appealing or similar to what traders currently use.The question is, as Xeroc eluded too, should BTS change it's risk profile to add leverage and cater to traders? personally I think 3rd parties should be the ones offering leverage and then use the DEX as a way to manage their risk. The way poloniex and most exchanges operate is that they make you have a minimum margin when using leverage, if the value of your position falls below the minimum margin your position is automatically closed. In order for this to work, ample liquidity and deep order books are mandatory. MF-Tzo referenced when the SNB depegged the swiss frank from the euro... Liquidity evaporated and there was a 20% move in the currency. This caused many FX traders to go under as well as some exchanges (FXCM had to be bought out). This is not a position that the DEX should ever be put in, and even if it was decided that BTS should be like FXCM or poloniex, I'm going to guess some drastic changes would need to be made to the code. Truth be told... most brokers that offer 50:1 or more leverage are gambling houses. The big bank traders don't come close to that leverage (if they use any at all), and usually their orders are passed directly to the interbank market. The 50:1 brokers typically use a dealing desk and take the opposite side of their clients trades. They will sometimes pass the orders to the interbank market to help manage their risks, but this is typically only done for large orders.
Quote from: Thom on April 20, 2017, 01:24:24 amThe leverage you like so much is merely an illusion of safety made attractive by potential profits. That safety will evaporate faster than a bot can place an order when the inevitable collapse begins.You didn't even understand what am I talking about. Yes, I like leverage, because this is what gives motivation to short assets instead of just holding them. And since MPA are created through shorting, no shorting means no liquidity. Let's forget about it for a moment. Suppose we are fine with 1:1 leverage, then BTS shorting is still screwed. You still need to put unnecessary high amount funds when you open and close position. How does this make BTS more safe than polonoiex? I say, it does not. In fact, it hurts BTS a lot.
The leverage you like so much is merely an illusion of safety made attractive by potential profits. That safety will evaporate faster than a bot can place an order when the inevitable collapse begins.
I can buy any worthless UIA with borrowed bitUSD, which wouldn't be possible with polo scheme. Why? Because you MUST sell it against BTS to cover collateral. That sucks. Any fiat gateways using MPA's instead of UIA would be forced to buy bitXXX from the market to build reserves. Now they can simply borrow, not for shorting purposes, but for operating deposit/withdrawals, making markets etc. without need of selling BTS power. It's not shorters heaven, because it wasn't designed for them. It is not dumb, look top volume markets for OPEN.BTC. It's working.
Not the margin trading but in general, the whole system. Do they show proof of reserves for their system? I don't know.
You must also remember that when exchanges like POLO are providing leverage, all those transaction are just number in a database. They are running a fractional reserve .
It seems I'm not the one who lacks understanding here.
This would be a huge advantage of bitshares over other exchanges, if it was not implemented a dumb way. How does this dumb implementation add more safety?
Quote from: yvv on April 20, 2017, 02:25:46 pmMPA is a lending on blockchain, but it is crewed. His point is that bitassets are borrowed FROM the blockchain while in p2p lending, you borrow from actual people.
MPA is a lending on blockchain, but it is crewed.
If someone implements lending on the blockchain, leveraged margin trading, like on Poloniex, will be possible. Once that is done, Bitshares will be the first leveraged trading platform where everything is transparent and nothing fishy going on. The world has never seen one before.
Quote from: mf-tzo on April 19, 2017, 08:10:22 pm@yvv what are you talking about mate? I think you confuse bitshares DEX purpose... Every bitasset created in bitshares is backed up by min 2.5 collateral value in bitshares. This is why in bitshares if you want to short sell you need to place at least 2.5 collateral value. This is why bitshares is safe and will avoid bankrupt. Because every bitasset created is backed up by 2.5 times collateral value!! This is why bitshares is superior to any bank and to any centralized exchange..Because you know that the " Bank" actually holds a lot of collateral for your "Money"...This is not a flaw in bitshares!! This is the superior market selling point of bitshares!! Especially now that we have more than $1 mil in bitassets is bitusd and bitcny and we all know that for these bitassets the blockchain holds at least x2.5 collateral in bts value, THAT is the selling point of bitshares. I know that now I feel very comfortable keeping my bitusd in bitshares Dex. What we need to do now is just do the same for biteur, bitgbp, bitgold, bitsilver, bitbtc and reduce the premium paid for those bitassets as well and be close to peg as bitusd and bitcny are currently are...Bitshares DEX is supposed to be your own bank. Not your own trading house! I want to feel safe keeping bitassets. I do not want bitshares blockchain to keep fractional reserves so you can margin trade with leverage!! The people who designed bts knew exactly what they were doing!!Going back to margin trading of centralized exchanges that you mentioned...All exchanges that give leverage are supposed to keep balanced books, take opposite positions to hedge and keep only the spreads charged. Well I have news for you..Most of them don't do that! Not even very big regulated exchanges that offer leverage to their customers. This is why when the CHF - EUR peg broke a couple of very big exchanges with margin trading went bankrupt and others almost bankrupt.. I hope that you do know that most banks just keep only fractional reserves of peoples money right? Well I want bitshares to be exactly what it is..A bank that keeps more than 250% of collateral of peoples money!As a final note, I hope you do not learn the hard way about margin trading in Poloniex as I did when I lost 80% of my bts holdings when I used them to margin trade (going long of course)..Poloniex and all these exchanges most probably manipulate prices in their favor. They see all the order books and they have really sophisticated bots to drive margin calls and screw you in their favor. So be careful when margin trading in Poloniex. They can screw you even if you are in the right direction of the trade..For example after too obvious pumps you go short and all of the sudden their servers don't work until prices recover and you do not get your entitled profit, or get margin called when you wanted to close your position etc etc..^^THIS^^THIS^^THISThe difference of perspective between BitShares and Poloniex is essentially the same as Kenesian vs. Austrian economics. Traders will ALWAYS be a much smaller subset of everybody else who can benefit from BitShares. If you appeal to people who want a safe place to store their wealth that same safe place is not going to be a hot trading platform - the two objectives are contrary to one another. This is yet another example of a dichotomy within the BitShares ecosystem, like Stealth vs. open ledger. Savers and Traders want opposite things out of BTS - one to be a stable store of value the other wants volatility so the trading action is profitable. Why not market to both groups? Appeal to savers by offering a dividend on their BitUSD, and to traders via a campaign of "Safe Trading"? The issue with the system of trading yyv seems to think so highly of is the leverage isn't safe. Haven't you learned from all those examples of over-leveraged derivatives that collapse when one key investor with huge stake gambles big, looses, then all the smaller fish that relied on gains from trades of that big guy go down, and it's just a house of cards waiting to fall. That can't happen with adequate collateral. Sorry to burst your bubble but you're looking through rose colored glasses and they blind you to the real dangers of the mainstream financial system. Sadly, people aren't willing to see those dangers until they are personally faced with them. It strikes me as a weakness of a gambling addict. The leverage you like so much is merely an illusion of safety made attractive by potential profits. That safety will evaporate faster than a bot can place an order when the inevitable collapse begins.
@yvv what are you talking about mate? I think you confuse bitshares DEX purpose... Every bitasset created in bitshares is backed up by min 2.5 collateral value in bitshares. This is why in bitshares if you want to short sell you need to place at least 2.5 collateral value. This is why bitshares is safe and will avoid bankrupt. Because every bitasset created is backed up by 2.5 times collateral value!! This is why bitshares is superior to any bank and to any centralized exchange..Because you know that the " Bank" actually holds a lot of collateral for your "Money"...This is not a flaw in bitshares!! This is the superior market selling point of bitshares!! Especially now that we have more than $1 mil in bitassets is bitusd and bitcny and we all know that for these bitassets the blockchain holds at least x2.5 collateral in bts value, THAT is the selling point of bitshares. I know that now I feel very comfortable keeping my bitusd in bitshares Dex. What we need to do now is just do the same for biteur, bitgbp, bitgold, bitsilver, bitbtc and reduce the premium paid for those bitassets as well and be close to peg as bitusd and bitcny are currently are...Bitshares DEX is supposed to be your own bank. Not your own trading house! I want to feel safe keeping bitassets. I do not want bitshares blockchain to keep fractional reserves so you can margin trade with leverage!! The people who designed bts knew exactly what they were doing!!Going back to margin trading of centralized exchanges that you mentioned...All exchanges that give leverage are supposed to keep balanced books, take opposite positions to hedge and keep only the spreads charged. Well I have news for you..Most of them don't do that! Not even very big regulated exchanges that offer leverage to their customers. This is why when the CHF - EUR peg broke a couple of very big exchanges with margin trading went bankrupt and others almost bankrupt.. I hope that you do know that most banks just keep only fractional reserves of peoples money right? Well I want bitshares to be exactly what it is..A bank that keeps more than 250% of collateral of peoples money!As a final note, I hope you do not learn the hard way about margin trading in Poloniex as I did when I lost 80% of my bts holdings when I used them to margin trade (going long of course)..Poloniex and all these exchanges most probably manipulate prices in their favor. They see all the order books and they have really sophisticated bots to drive margin calls and screw you in their favor. So be careful when margin trading in Poloniex. They can screw you even if you are in the right direction of the trade..For example after too obvious pumps you go short and all of the sudden their servers don't work until prices recover and you do not get your entitled profit, or get margin called when you wanted to close your position etc etc..
Every bitasset created in bitshares is backed up by min 2.5 collateral value in bitshares.
This is not a flaw in bitshares!! This is the superior market selling point of bitshares!!
Quote from: yvv on April 19, 2017, 04:43:53 pm(...) and to settle the debt we need to deposit 100% on top of double collateral.You can set your CR = MCR and wait for margin call. If there is enough buyers close to feed, you shouldn't be at loss. This is maybe not what you want, but will close your whole position without additional funds.ORIf you have safe CR, you can reduce it for a moment, use funds to partially cover your debt - at the end you have still 0 funds, but better CR, so you can repeat your operation with better effect each step.For example: 2.0 => 1.8 => 2.25 ... 2.25 =>1.8 => 3.2Am I wrong?
(...) and to settle the debt we need to deposit 100% on top of double collateral.
How would we cover the 100% collateral though? Poloniex does this with a centralized insurance fund..