BitShares Forum
Main => General Discussion => Topic started by: clayop on January 29, 2017, 11:53:18 am
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I posted smartcoin improvement proposal on github
https://github.com/bitshares/bsips/issues/21
Please leave your thoughts.
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I like the idea using parts of the collected fees going to a collateral pool that reduces the debt of all shorters.
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BirUSD and bitCNY are often traded below feed, which means that they are oversupplied. There is just not enough demand for them. If you make traders pay to shorters, you'll decrease demand and make the problem worse.
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BirUSD and bitCNY are often traded below feed, which means that they are oversupplied. There is just not enough demand for them. If you make traders pay to shorters, you'll decrease demand and make the problem worse.
If there's no use of Smartcoin, there will be no additional incentives from this change. Actually, this proposal is to promote more use of Smartcoins (e.g. merchant payment, remittance). Here's my additional explanation.
The problem I am attempting to solve is discrepancy between risks and returns in shorting (issuing) Smartcoins. When an issuer create Smartcoins by shorting, he will be exposed to BTS price and all accompanied benefits/losses, which is totally fair. However, profits(a.k.a. fees) from using utilities of Smartcoin, mainly stability thanks to over 1.5x collateral from the issuer, goes to the network and benefit all stakeholders. In BitCNY's case, its issuers only benefit approximately 14% of total profit (because the market cap of BitCNY is about 14% of BitShares'), and other 86% is distributed to mere BTS holders who don't expose them to the risk.
This is the main problem this proposal is trying to tackle. It doesn't change strategy what you mentioned, and just give additional incentives to the issuers.
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Similar discussion occurred here, maybe worth check out:
https://bitsharestalk.org/index.php/topic,23707.0.html
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Similar discussion occurred here, maybe worth check out:
https://bitsharestalk.org/index.php/topic,23707.0.html
Thanks for informing. The difference of this proposal is a fee type; my proposal is about transaction fee. IMO, Smartcoin should become beyond exchanges, to marketplaces
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Similar discussion occurred here, maybe worth check out:
https://bitsharestalk.org/index.php/topic,23707.0.html
Thanks for informing. The difference of this proposal is a fee type; my proposal is about transaction fee. IMO, Smartcoin should become beyond exchanges, to marketplaces
It was mixed pls check:
https://bitsharestalk.org/index.php/topic,23707.msg301856.html#msg301856
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Thanks I checked the missing part.
Your concern is reasonable. In my proposal, I attempt to deal with it by taking part of fees into the network (10% for non LTM) to prevent spamming attack.
Also, as xeroc mentioned, one possible scenario is borrow Smartcoin, keep it, and obtaining profit from fees. This seems the low-hanging fruit, however, I think it is not 100% safe method. Because this needs at least 2x collateral in BTS and the person is exposed to BTS price. For instance, if one issues 2k BitUSD with 1M BTS collateral, he can enjoy profits from fee but if BTS price decreases 10% he will lose 10% of value when his position is cleared.
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Thanks I checked the missing part.
Your concern is reasonable. In my proposal, I attempt to deal with it by taking part of fees into the network (10% for non LTM) to prevent spamming attack.
Also, as xeroc mentioned, one possible scenario is borrow Smartcoin, keep it, and obtaining profit from fees. This seems the low-hanging fruit, however, I think it is not 100% safe method. Because this needs at least 2x collateral in BTS and the person is exposed to BTS price. For instance, if one issues 2k BitUSD with 1M BTS collateral, he can enjoy profits from fee but if BTS price decreases 10% he will lose 10% of value when his position is cleared.
No, he will not lose nothing. He will update his position using a fraction of his bitUSD and continue collecting trading fees. Issuing bitUSD without shorting them is equivalent to just keeping BTS. Your NAV in BTS stays fixed no matter where the price moves.
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One of better approaching is increasing usability like @Chris4210 kindly explained here:
https://bitsharestalk.org/index.php/topic,23755.0.html
My second thought on this is that fact that community smartcoins have low fee and anonymity is actually big advantage. We shouldn't mess with this much. We could improve usability also by providing solution for paying witnesses and workers, for instance in bitUSD. It would address main problem here, which is liquidity. It would also provide more benefit to the network.
It is discussed on several occasions in several different threads. I know it is of topic here but it is related to fees. How this could be done?
First we should add fee to smart coin transactions and all funds should go to community controlled account. From there it should pay for workers and witnesses. If there is not enough funds there, it should use available funds from reserve fund, and issue for instance bitUSD providing collateral. It should immediately try to sell that short position. It should decrease price incrementally until all short is sell. It would provide incentive for buyers and eventually all short would be sold.
Another approach could be that instead of refund worker all available funds could be put on buy side with some % markup. It could combine the two approaches. It may also be another approaches I didn't think of.
Eventually we could get liquid smart coin market so selling short wouldnt be a problem.
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We could improve usability also by providing solution for paying witnesses and workers, for instance in bitUSD.
I know this has been discussed on many occasions before, I don't recall much of that. However, I know for myself I would be liquidating a significant portion of my witness pay to cover server expenses, so the creation of BitUSD by the blockchain to pay witnesses and their subsequent liquidation of it to pay server costs would seem to improve liquidity IMO.