Thanks @xeroc, I great appreciate your efforts to find the consensus.
First, let’s define the vision of smartcoin, in my view, it is 1. enough accurate pegging and 2. enough liquidity. based on these smartcoin will seek wildly adoption comparing to USDT.
I think this is already where people may have a different vision.
For me (and others) the core value proposition of bitassets was:
* always fully collateralized
* settlement available to obtain collateral at a "fair" price.
With respect to settlement, the community has already moved from a
settlement at parity 1:1 with the introduction of the settlement
offset to incentivize shorters to increase liquidity.
My feeling is that those optimization criteria (tight pegging & liquidity
vs. backing and settlement) may not work out together, at least not in
the short term.
So I think we have some difference in defining smartcoin.
In my idea, smartcoin is one solution of the “stable coin” concept which are discussed a lot this year, it is designed as a token that has stable value and is easy to get and transfer when one need it, that’s why I emphasize pegging accuracy and liquidity.
It seems in your idea, smartcoin is more like something that can help people to store value, to hedge the risk in cryptocurrency market.
Let me tell 2 stories.
1.AEX and bigone has listed bitCNY and use bitCNY as the base currency in their exchange, but several months ago they removed bitCNY as base currency because “bitCNY is in serious shortage and very high premium, difficult to get, users are confused and very unsatisfactory”.
2.in August 1971, U.S. President Richard Nixon announced to remove the dollar peg to gold, which had been fixed at $35 an ounce. the Bretton Woods System collapsed.
I’d like to say, before we discussed BSIP42, bitCNY is at a similar dilemma as USD in 1971 - the supply of gold is limited, but the demand to USD increased rapidly, a big conflict comes and US cannot maintain the $35 an ounce gold price.
bitCNY(surely also bitUSD and bitEUR) is potential to get widely adopted, but before BSIP42 the supply of biCNY depend on the price of BTS, that’s why each time bear market comes, bitCNY was squeezed out quickly and lead to very serious shortage and very high premium, at the same time, continuous margin calling bring many users to nightmare.
Maybe in initial design smartcoin is more like just one asset to store value and hedge risk. But if we hope smart coin be widely used in many CEXs as base currency, and in international payments, we have to review and update the design to guarantee the pegging accuracy and liquidity, otherwise smart coins can only be used by a small community and have no chance to let the whole world share the great innovation of Bitshares community.
force settlement enable smart coin holders to forcibly buy BTS from debt position owners, so here price play a key role, now we set forcesettlement offset and quantity limit to protect debt position owners, now in almost all the cases, to directly buy from DEX is a better way for smartcoin holders to get BTS.
bitCNY has a 5% force settlement offset for long time and this does not impact the value of bitCNY, the value of smart coin do not rely that much on force settlement. if we can not guarantee tight peg+liquidity+fair price force settlement, I believe we should give up the last one.
We both agree on bitassets having a supply side problem and that
we should allow shorters to easier borrow bitassets. According to
my optimization criteria, I still believe we must not allow bitassets
to become undercollateralized (overall - we may find a way to allow
individual positions to go CR < 1)
I agree it's OK to not allow MCR<1 in the MCR based solution.
I agree that the overall collateral ratio need to be >1, the problem is, how to handle some single margin call orders with CR<1? I think it's bad to let these single orders trigger global settlement process. can we just leave these orders there and wait they be eaten or disappear?
After BSIP applied to bitUSD the premium fell drastically, we hope we can keep this trend continue until to a close to 0 premium.
Well, arguable, that is expected behavior because we are "forcing" the marketing
to trade according to parity, we do not provide incentive for the market to
move to parity on its own. This difference is what does sit well with the Western
community.
I believe there are incentive - actually the “negative feedback” make this logic appears:
if there are demands on smart coins (premium>0), there will be incentive to borrow smart coins and buy BTS, this is true incentive that we had ignored, it means if we can make more demands on smartcoins, we can help the BTS price to go up.
@Jerry, how about the both of us come to a compromise in that we allow the witnesses
to decide how to go forward and whether or not they want to run BSIP42 on bitUSD, or
not. I think, as a proxy, we shouldn't threaten them with the removal of our votes
just because they support(or not support) a BSIP that actually gives the freedom of
choice to them (the witnesses). With that said, I will retract my statement of removing
votes from BSIP2-bitUSD witnesses and would like to keep rational and
constructive discussion like this one going.
at this moment I'd like to stop "threatening" witnesses - frankly speaking I don't think this can be called "threaten", this is just to express opinion of a voter, it's always not easy to push such kind of update, so sometimes voting power is needed, I don't promise to give up the right of a proxy.