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Main => General Discussion => Topic started by: sudo on July 31, 2015, 10:50:09 am

Title: why bitUSD Yield still so high?
Post by: sudo on July 31, 2015, 10:50:09 am
new short orders most 0 interest

http://bitsharesblocks.com/asset/orderbook?asset=USD
Title: Re: why bitUSD Yield still so high?
Post by: sudo on August 01, 2015, 06:00:36 am
Yield  5.22%
Title: Re: why bitUSD Yield still so high?
Post by: bytemaster on August 01, 2015, 06:04:58 am
Because fees / yield are paid out over 1 year, but only if you hold the BitUSD for 1 year do you get 100% of the yield.   Everyone who bails early leaves more yield on the table for those who are holding on.

The end result is that we have a yield pool based on old income when the BitUSD supply was over 600K and interest was being paid.   The supply shrank to 150K but the "collected fees" didn't shrink so "collected fees" is now a larger percentage of supply than it was in the past.
Title: Re: why bitUSD Yield still so high?
Post by: sudo on August 01, 2015, 03:08:16 pm
they can easily  short  at 0 interest&buy bitUSD at the same time  to get bitUSD to cover  high interest short orders
but they didn't
Title: Re: why bitUSD Yield still so high?
Post by: toast on August 01, 2015, 11:54:32 pm
they can easily  short  at 0 interest&buy bitUSD at the same time  to get bitUSD to cover  high interest short orders
but they didn't

The high yield is coming from interest that was already paid - I'm sure most shorts have rolled over to low %s
Title: Re: why bitUSD Yield still so high?
Post by: regismol on August 02, 2015, 02:09:51 am
they can easily  short  at 0 interest&buy bitUSD at the same time  to get bitUSD to cover  high interest short orders
but they didn't

The high yield is coming from interest that was already paid - I'm sure most shorts have rolled over to low %s
Beat me to it....
BitUSD rolled over to low%'s in shorts, hence the higher yield from interest already paid. Toast explained this simply, summed up well.
Title: Re: why bitUSD Yield still so high?
Post by: cylonmaker2053 on August 02, 2015, 03:28:42 pm
Because fees / yield are paid out over 1 year, but only if you hold the BitUSD for 1 year do you get 100% of the yield.   Everyone who bails early leaves more yield on the table for those who are holding on.

The end result is that we have a yield pool based on old income when the BitUSD supply was over 600K and interest was being paid.   The supply shrank to 150K but the "collected fees" didn't shrink so "collected fees" is now a larger percentage of supply than it was in the past.

does the estimated yield adjust dynamically with market price for bitUSD? it doesn't seem like that yield number changes too dramatically, but we've seen big swings in BTS price of bitUSD.
Title: Re: why bitUSD Yield still so high?
Post by: toast on August 02, 2015, 05:58:02 pm
Because fees / yield are paid out over 1 year, but only if you hold the BitUSD for 1 year do you get 100% of the yield.   Everyone who bails early leaves more yield on the table for those who are holding on.

The end result is that we have a yield pool based on old income when the BitUSD supply was over 600K and interest was being paid.   The supply shrank to 150K but the "collected fees" didn't shrink so "collected fees" is now a larger percentage of supply than it was in the past.

does the estimated yield adjust dynamically with market price for bitUSD? it doesn't seem like that yield number changes too dramatically, but we've seen big swings in BTS price of bitUSD.

Yield is paid into the pool by shorts paying whatever they choose. Yield is paid out of the pool at a fixed %/block. Shorts were willing to pay a ton at first, and then over time the amount shorts wanted to pay went down and so did bitUSD supply, which kept the yield pretty steady.
Title: Re: why bitUSD Yield still so high?
Post by: cylonmaker2053 on August 02, 2015, 06:54:23 pm
Because fees / yield are paid out over 1 year, but only if you hold the BitUSD for 1 year do you get 100% of the yield.   Everyone who bails early leaves more yield on the table for those who are holding on.

The end result is that we have a yield pool based on old income when the BitUSD supply was over 600K and interest was being paid.   The supply shrank to 150K but the "collected fees" didn't shrink so "collected fees" is now a larger percentage of supply than it was in the past.

does the estimated yield adjust dynamically with market price for bitUSD? it doesn't seem like that yield number changes too dramatically, but we've seen big swings in BTS price of bitUSD.

Yield is paid into the pool by shorts paying whatever they choose. Yield is paid out of the pool at a fixed %/block. Shorts were willing to pay a ton at first, and then over time the amount shorts wanted to pay went down and so did bitUSD supply, which kept the yield pretty steady.

interesting, i guess i was looking at it wrong since it's yield on bitUSD paid in bitUSD, so it's independent of the BTS price of bitUSD. this has been a very interesting experiment, kind of sad to see it change with 2.0, but hopeful that the bond market offers even more opportunity.