BitShares Forum
Main => General Discussion => Topic started by: bytemaster on January 27, 2015, 09:40:31 pm
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We are going to allow gateways to set a market fee just like they do today on their internal exchange. This fee will have a rate between 0.000% and 10.000% of every trade. This will help us get gateways to issue IOUs on our chain because they could keep the SAME business model they have today.
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Nice this will make it a much easier sell +5%
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Good change. +5%
Which gateway will issue the first IOU?
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Nice change.
BTW, where do the fees go? Burned or going to reserve fund?
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Good change. +5%
Which gateway will issue the first IOU?
Beat me too it.. this was my question! +5%
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Nice change.
BTW, where do the fees go? Burned or going to reserve fund?
No they go to the UIA issuer, i.e. the exchange/gateway. This incentivizes them to want to allow their deposits to be traded on the blockchain.
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We are going to allow gateways to set a market fee just like they do today on their internal exchange. This fee will have a rate between 0.000% and 10.000% of every trade. This will help us get gateways to issue IOUs on our chain because they could keep the SAME business model they have today.
+5%
Just to clarify, UIA issuer only collects the percentage fee of the UIA, not of the other trading pair in BitAsset/UIA markets, correct?
And does that mean there could be two different percentage fees in a UIA-A/UIA-B market?
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Is there documentation that explains the range of features involved with these features?
I get that an exchange can use a UIA in BTS's DEX, but what is the mechanism that they tie that UIA to something of value? Are there transactions where I can create an Asset and have it pegged to BTS.
The part that is not clear to me is where is the collateral stored? How do we know that the UIA can be redeemed? Is there a quality in-depth example including the RPC calls that would walk through this process? Can Bytemaster make such a document for his blog? (Maybe it has been written?)
You will get adoption be either cold-contacting exchanges or by writing something quality that explains a typical usecase of how an exchange would create these assets. This serves as documentation which will help people implement things, but it can also be written in such a way to be spread on Social Media. I believe Bitshares.tv may have covered this but thats not my preferred media for technical things. There is no doubt there are others like me. (ie future potential partners of Bitshares)
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I get that an exchange can use a UIA in BTS's DEX, but what is the mechanism that they tie that UIA to something of value?
The value of UIAs is based on trust in the issuer. UIA holders are exposed to counterparty risk with respect to the issuer who is backing their value.
The part that is not clear to me is where is the collateral stored? How do we know that the UIA can be redeemed?
The collateral/reserve in the case of the UIA is stored off of the BitShares blockchain. If this is a UIA that is an IOU for some cryptocurrency, then the reserve will likely be stored in that cryptocurrencies' native blockchain (likely controlled through keys held by the UIA issuer). If the UIA is an IOU for fiat, then the reserve will likely be fiat held in their traditional bank accounts. Note that they do not have to have full 100% reserve backing their IOUs but customers should demand that they do (also it should at least be more transparent to check on the blockchains in the case of cryptocurrency IOUs). The UIA may also have no real reserves and just be a promise to pay back the UIA holders in the future with something of value. Again, you are trusting the UIA issuer who is backing the value of the UIA and there is no guarantee that you can redeem the full value promised. You just have to trust that they actually will pay it back to maintain their reputation and continue their business model (and also their jurisdiction will likely consider it a security and therefore they will have a legal obligation to make their customer's whole if possible).
The UIAs are interesting because we want gateways to use them as a way of getting fiat into and out of the BitShares system. The companies we would typically be targeting to act as gateways are exchanges that have already enabled bank transfers of fiat into and out of their existing system. These exchanges are used to making their money through percentage fees on each trade, so their revenue scales with the volume of trading of their assets. We are asking them to not focus on the exchange features (order books, matching bids and asks) and instead only focus on the fiat gateway portion. Some exchanges may not be comfortable with such a huge change in their business model. This new feature now allows these exchanges to use their same business model to make money except BitShares does all their order book work for them and also stores the cryptocurrency assets so that liability isn't on the exchange anymore.
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We are going to allow gateways to set a market fee just like they do today on their internal exchange. This fee will have a rate between 0.000% and 10.000% of every trade. This will help us get gateways to issue IOUs on our chain because they could keep the SAME business model they have today.
+5%
Is there documentation that explains the range of features involved with these features?
I get that an exchange can use a UIA in BTS's DEX, but what is the mechanism that they tie that UIA to something of value? Are there transactions where I can create an Asset and have it pegged to BTS.
The part that is not clear to me is where is the collateral stored? How do we know that the UIA can be redeemed? Is there a quality in-depth example including the RPC calls that would walk through this process? Can Bytemaster make such a document for his blog? (Maybe it has been written?)
You will get adoption be either cold-contacting exchanges or by writing something quality that explains a typical usecase of how an exchange would create these assets. This serves as documentation which will help people implement things, but it can also be written in such a way to be spread on Social Media. I believe Bitshares.tv may have covered this but thats not my preferred media for technical things. There is no doubt there are others like me. (ie future potential partners of Bitshares)
+5%
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I get that an exchange can use a UIA in BTS's DEX, but what is the mechanism that they tie that UIA to something of value?
The value of UIAs is based on trust in the issuer. UIA holders are exposed to counterparty risk with respect to the issuer who is backing their value.
The part that is not clear to me is where is the collateral stored? How do we know that the UIA can be redeemed?
The collateral/reserve in the case of the UIA is stored off of the BitShares blockchain. If this is a UIA that is an IOU for some cryptocurrency, then the reserve will likely be stored in that cryptocurrencies' native blockchain (likely controlled through keys held by the UIA issuer). If the UIA is an IOU for fiat, then the reserve will likely be fiat held in their traditional bank accounts. Note that they do not have to have full 100% reserve backing their IOUs but customers should demand that they do (also it should at least be more transparent to check on the blockchains in the case of cryptocurrency IOUs). The UIA may also have no real reserves and just be a promise to pay back the UIA holders in the future with something of value. Again, you are trusting the UIA issuer who is backing the value of the UIA and there is no guarantee that you can redeem the full value promised. You just have to trust that they actually will pay it back to maintain their reputation and continue their business model (and also their jurisdiction will likely consider it a security and therefore they will have a legal obligation to make their customer's whole if possible).
The UIAs are interesting because we want gateways to use them as a way of getting fiat into and out of the BitShares system. The companies we would typically be targeting to act as gateways are exchanges that have already enabled bank transfers of fiat into and out of their existing system. These exchanges are used to making their money through percentage fees on each trade, so their revenue scales with the volume of trading of their assets. We are asking them to not focus on the exchange features (order books, matching bids and asks) and instead only focus on the fiat gateway portion. Some exchanges may not be comfortable with such a huge change in their business model. This new feature now allows these exchanges to use their same business model to make money except BitShares does all their order book work for them and also stores the cryptocurrency assets so that liability isn't on the exchange anymore.
Ok, so there is nothing here I am missing. My thought was would it somehow might be possible to issue UIA's on RPM's blockchain which then go to the gateway and thus not force people to risk their deposit. Without other transactions that don't exist this would do nothing more than add an extra gateway. So these gateway programs will always have a certain level of centralized risk, there is no way to avoid it ?
My question boils down to "Can a gateway be made that never exposes a person to risk ?". It seems any cross chain transaction utilizing a off chain gateway will force the gateway runner to hold the balances of both sides.
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Good! We need to incentivize the heck out of this. We should be at least as profitable for them as anything else available.
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Has this change has been bought about to allow exchanges to provide a withdraw option for their fiat currencies which doesn't require involving the banking system?
edit: Hmmm, but how does work come claim time? I withdraw my bitstamp USD IOUS, trade them with someone - how do they claim their actual fiat?
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Has this change has been bought about to allow exchanges to provide a withdraw option for their fiat currencies which doesn't require involving the banking system?
edit: Hmmm, but how does work come claim time? I withdraw my bitstamp USD IOUS, trade them with someone - how do they claim their actual fiat?
In your case bitstamp would ask you to deposit X bitstampIOUs into on of their addresses and credit them to you in their database ..
or alternatively .. you authenticate your balance_id against them (signature) and they withdraw them from your account (super-admin rights over the IOUs)
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Thank you bytemaster. This was one of the most requested features by most exchanges.
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We are going to allow gateways to set a market fee just like they do today on their internal exchange. This fee will have a rate between 0.000% and 10.000% of every trade. This will help us get gateways to issue IOUs on our chain because they could keep the SAME business model they have today.
Just to confirm for europeans, that's between 0% and 10%, not 0 and 10000%?
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This is another feature that will hurt our market cap.
First of all there is no chance of getting an already established exchange to become a fiat gateway within the next 6 months. That would only happen if bitshares were to explode in value and gain attention from everyone, in that case they'll do it with or without these kind of fees. Also since this means that stability is further delayed it serves to reduce the chance of bitshares exploding in value and thus actually reduces the expected amount of fiat gateways.
Secondly it doesn't make sense economically in the long term. Gateways add value by being on and off ramps, the trading and order matching is done by bitshares. They can and will eventually equilibrate at increasing on and off ramp fees to make up for their lost trading fees, but of course gateways will never be able to be as profitable as bitcoin exchanges because we've eaten a part of their market, and there's no way we can change that reality.
This is a neat feature but it should not have high priority.
It should under no circumstances delay 1.0 and should not be introduced as a hard fork during what is supposed to be a stable period.
Focus on getting trading engine into the light client instead.
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We are going to allow gateways to set a market fee just like they do today on their internal exchange. This fee will have a rate between 0.000% and 10.000% of every trade. This will help us get gateways to issue IOUs on our chain because they could keep the SAME business model they have today.
Just to confirm for europeans, that's between 0% and 10%, not 0 and 10000%?
...lol I don't get it. Europeans actually do this?? "." is a decimal, "," is a thousand separator. Why in the Sam hell would you want to use "." as a thousand separator?? What if it was 10,000.5%, would you write 10.000.5%?? How confusing...
This is another feature that will hurt our market cap.
First of all there is no chance of getting an already established exchange to become a fiat gateway within the next 6 months. That would only happen if bitshares were to explode in value and gain attention from everyone, in that case they'll do it with or without these kind of fees. Also since this means that stability is further delayed it serves to reduce the chance of bitshares exploding in value and thus actually reduces the expected amount of fiat gateways.
Secondly it doesn't make sense economically in the long term. Gateways add value by being on and off ramps, the trading and order matching is done by bitshares. They can and will eventually equilibrate at increasing on and off ramp fees to make up for their lost trading fees, but of course gateways will never be able to be as profitable as bitcoin exchanges because we've eaten a part of their market, and there's no way we can change that reality.
This is a neat feature but it should not have high priority.
It should under no circumstances delay 1.0 and should not be introduced as a hard fork during what is supposed to be a stable period.
Focus on getting trading engine into the light client instead.
I agree with you wholeheartedly Rune. BTS absolutely needs stability, and 1.0/light wallets etc were needed yesterday. Seems a bit of a priority shuffle is definitely in order.
Right now is make-it-or-break-it time for BitShares, and time is absolutely of the essence. Break it now, and with the decreased dev funding resulting from the reduced market cap BTS could go into an all-out death spiral...
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Why in the Sam hell
I think that quote alone explains your confusion :)
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We are going to allow gateways to set a market fee just like they do today on their internal exchange. This fee will have a rate between 0.000% and 10.000% of every trade. This will help us get gateways to issue IOUs on our chain because they could keep the SAME business model they have today.
Just to confirm for europeans, that's between 0% and 10%, not 0 and 10000%?
...lol I don't get it. Europeans actually do this?? "." is a decimal, "," is a thousand separator. Why in the Sam hell would you want to use "." as a thousand separator?? What if it was 10,000.5%, would you write 10.000.5%?? How confusing...
This is another feature that will hurt our market cap.
First of all there is no chance of getting an already established exchange to become a fiat gateway within the next 6 months. That would only happen if bitshares were to explode in value and gain attention from everyone, in that case they'll do it with or without these kind of fees. Also since this means that stability is further delayed it serves to reduce the chance of bitshares exploding in value and thus actually reduces the expected amount of fiat gateways.
Secondly it doesn't make sense economically in the long term. Gateways add value by being on and off ramps, the trading and order matching is done by bitshares. They can and will eventually equilibrate at increasing on and off ramp fees to make up for their lost trading fees, but of course gateways will never be able to be as profitable as bitcoin exchanges because we've eaten a part of their market, and there's no way we can change that reality.
This is a neat feature but it should not have high priority.
It should under no circumstances delay 1.0 and should not be introduced as a hard fork during what is supposed to be a stable period.
Focus on getting trading engine into the light client instead.
I agree with you wholeheartedly Rune. BTS absolutely needs stability, and 1.0/light wallets etc were needed yesterday. Seems a bit of a priority shuffle is definitely in order.
Right now is make-it-or-break-it time for BitShares, and time is absolutely of the essence. Break it now, and with the decreased dev funding resulting from the reduced market cap BTS could go into an all-out death spiral...
Light wallet is basically working right now. Nathan is making good progress on it and the tasks that need to be done on it are not easily done in parallel.
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Focus on getting trading engine into the light client instead.
This is a sizeable project and not on any roadmap before 1.0.
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Focus on getting trading engine into the light client instead.
This is a sizeable project and not on any roadmap before 1.0.
I know, but that should be the next primary objective (after blockchain is feature complete in the medium) that all possible resources should be focused on. I assume it won't require a hard fork either so it's something that can only add value.
Glad to hear the light wallet is working! Hope we can test it soon! :D
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Can it be applied to existing (but non-initialized) UIAs?
Edit: for trading only or including transactions?
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Focus on getting trading engine into the light client instead.
This is a sizeable project and not on any roadmap before 1.0.
I know, but that should be the next primary objective (after blockchain is feature complete in the medium) that all possible resources should be focused on. I assume it won't require a hard fork either so it's something that can only add value.
Glad to hear the light wallet is working! Hope we can test it soon! :D
+5%