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General Discussion / Re: New mechanism to handle bad debt (black swan)
« on: July 16, 2019, 02:08:55 pm »
The debt holders concern about global settlement and BitAsset Holders concern about under collateralized, there is solution available for both parties but need some changes on BSIP18 - Revive BitAsset through buying Settlement Pool.
Propose Solution:
1. Rather than force close all margin positions and move to settlement pool, the new solution is force close MCR <1 Margin Positions only and move to settlement pool, this will solve debt holders concern about global settlement.
2. Same as BSIP18, everyone can Use BTS to bid for those debts in settlement pool but we need to give them incentive to do so because investors will prefer to create new margin position rather than use MCR 1.6 to revive those debt.
3. Asset Owner set a new parameter call Minimum ReCollateral Ratio (MRR) eg. MRR 1.1
4. With MRR 1.1, investors can use 0.1 BTS to obtain 1 BTS Debt, this is a huge incentive for investors to keep BitAsset fully collateralized, this will solve BitAsset Holders concern about under collateralized.
Propose Solution:
1. Rather than force close all margin positions and move to settlement pool, the new solution is force close MCR <1 Margin Positions only and move to settlement pool, this will solve debt holders concern about global settlement.
2. Same as BSIP18, everyone can Use BTS to bid for those debts in settlement pool but we need to give them incentive to do so because investors will prefer to create new margin position rather than use MCR 1.6 to revive those debt.
3. Asset Owner set a new parameter call Minimum ReCollateral Ratio (MRR) eg. MRR 1.1
4. With MRR 1.1, investors can use 0.1 BTS to obtain 1 BTS Debt, this is a huge incentive for investors to keep BitAsset fully collateralized, this will solve BitAsset Holders concern about under collateralized.