BitShares Forum
Main => General Discussion => Topic started by: btswildpig on April 14, 2015, 07:47:41 am
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As long as there is yield on BitAssets , a big whale can :
Short to himself with tens of millions of BTS , generate huge amount of BitAssets , hold for 1 month , and cover the short order himself while getting yield (interest ) .
As long as he can cover before margin call price or expire day , it'll be a risk free operation for him , and he has no reason not to do that .
So huge amount of BitAssets was created , but that's not reflecting the actual demand for BitAssets in the real world . Ok , that's not a big deal either .
But with that kind of huge short order , outside speculators who want to buy more BTS , they don't have to buy it at normal price . They can just wait until someone make
the above move , then force the price down in order to margin call the order to pick up the bodies . So as long as some whale is opening new short orders to himself just for collecting the interest(yield) , it not only create false demand for BitAssets , but also increasing the chance of someone trying to push the price down .
If the big whale can watch the price 24/7 and can cover at anytime , he'll be good . But he can't , and the attacker will be betting on that .
Also the big whale maybe too ignorant to realize the attacker can in fact margin call him while he is sleeping , so he'll still dare to do the above operation just for collecting yield and assumes zero risk .
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I wonder if this situation arises because the market is still fairly immature. At the moment on bitUSD, with no shorts at the price feed, it appears the rational thing for all existing shorts to do is to roll at 0% interest, extending their shorts another 30 days interest free. But that would cut the bitUSD yield to zero, and take away the profitability for such a whale.