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Main => General Discussion => Topic started by: JonnyB on January 27, 2016, 08:21:51 pm

Title: Radical ideas for liquidity
Post by: JonnyB on January 27, 2016, 08:21:51 pm
The dex is not a decentralized exchange without a functioning smartcoin. Trading UIAs is nice but can be done faster and cheaper on poloniex.
We are 4 months in to bts 2.0 and none of the smartcoins are liquid. Something big needs to change.
People keep saying we just need a bridge to smartcoins but nobody will provide that bridge without liquidity
Here are some radical ideas of how to increase liquidity.

- The committee or a worker proposal should use reserve pool funds to create smartcoins and sell them in to the market at feed price plus 10%
- Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time.
- Get all gateways to offer the same btcUIA instead of each having their own separate ones. Could be a multisig wallet controlled by committee.
- Get the reserve pool to pay for a bitcoin-BitBTC bridge with guaranteed 2-way liquidity
- Limit trading pairs in the GUI to just USD vs XXX
- Buy an existing exchange like poloniex and migrate its backend over to bitshares.
- Pay some altcoins that are struggling but have big communities to migrate their coins over to bitshares through proof of burn.

Loads of people are going to moan about these ideas but we need to prove a smartcoin works.
The trading volume of USD:BTC over the last 24hrs is actually zero as it is on most days.
Title: Re: Radical ideas for liquidity
Post by: kenCode on January 27, 2016, 08:28:32 pm
"Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time."
Definitely NOT. We don't use Dollars over here in Europe and neither does China.
 
The POS systems need AT LEAST those top 3 as liquid choices:
https://www.youtube.com/watch?v=GMECm8bqKaE&index=5&list=PLjbx3qSmDe7RYkRMIEuFyYyG7_vvKgou0
 
The free market UIA's will also become liquid as demand increases.
Just because it's slow to grow doesn't mean it's broke.
Title: Re: Radical ideas for liquidity
Post by: Shentist on January 27, 2016, 08:34:01 pm
its nice to see someone is thinking outside the box!

i will anyone tell, just move some assets from other exchanges into bitshares, we have now multiple ways to do it.

i think "maker" will help here, because at the moment everyone is complaining, but no one is responsible for liquidity.

which exchanges would you buy? i think we are not so rich :D

and just to hijack your thread

i proposed a new trading type here: https://bitsharestalk.org/index.php/topic,21110.15.html

i think we should also increase what we can offer.
Title: Re: Radical ideas for liquidity
Post by: JonnyB on January 27, 2016, 08:42:20 pm
"Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time."
Definitely NOT. We don't use Dollars over here in Europe and neither does China.
 
The POS systems need AT LEAST those top 3 as liquid choices:
https://www.youtube.com/watch?v=GMECm8bqKaE&index=5&list=PLjbx3qSmDe7RYkRMIEuFyYyG7_vvKgou0
 
The free market UIA's will also become liquid as demand increases.
Just because it's slow to grow doesn't mean it's broke.

I live in Europe too. I don't think smartcoins are broke I just think we need to walk before we can run.
The biggest bitcoin exchange Bitstamp is based in europe, it trades in dollars not euros.
Title: Re: Radical ideas for liquidity
Post by: Akado on January 27, 2016, 09:47:56 pm
- The committee or a worker proposal should use reserve pool funds to create smartcoins and sell them in to the market at feed price plus 10%

Like I've stated a couple of times, I thought when the committee proposal was approved this was to be done immediately, however we've seen nothing so far, apparently a few bugs/exploits were discovered and the committee is focusing on them atm, postponing this. It should have been done already if the proposal was approved though. There were a few topics about that at the time with plenty of discussion and imo that should have been discussed at that time by the committee before they approved it... Meaning we have to wait till they fix whatever needs to be fixed first.

I also agree on exchanges having all the same asset instead of multiple different ones, but I guess it's up to them and their business model. Everyone's free to do whatever they want but I think atm what you suggested really is the solution. We have to start somewhere, it's much better having a solid market than having dozens of iliquid markets, it just doesn't make sense atm, we're too small for that, there's no competition for that yet. First we need to make BitShares "usable", only then should other businesses think about that, because without BitShares working first, their assets will still be useless with no liquidity.

As for focusing solely on USD... I'm divided there. I really think that it isn't a problem for EUR. Gateways just need to convert it. [member=30868]kenCode[/member] instead of your customers seeing 5 dollars, you make the conversion and they see 4.80 euros, it's just a matter of adding/subtracting the different that there is between EUR and USD I think. Users see EUR but really they're using USD, just like an inflated IOU. Unless EUR/USD suffers a huge change and the ratio drastically changes I don't see a problem with that. Just make it appear in EUR and 20 or 15% cheaper or whatever's the difference between USD and EUR.
Now the part I was divided is because I also think we need CNY. We need the support of the chinese community back. We can't dismiss them.

Other solution I think is simply having normal markets like all exchanges. Instead of having every single asset traded against BTS, why not just do it against BTC like people are used to? And main markets also traded against USD/CNY.

DASH/BTC
DOGE/BTC
LTC/BTC
BTS/BTC
METAFEES/BTC
OPENPOS/BTC
USD/BTC
USD/BTS
CNY/BTC
CNY/BTS

that's it. also having those assets be the same. Meaning the same btc used by openledger and other exchanges, same usd too, etc. This way instead of having 20 or 30 useless pairs we have 10 that are a little more solid and what people are used to. It also doesn't give a good image for the outside when people see a bunch of markets, all with no volume, it seems like a mess. This could help reduce that.
Title: Re: Radical ideas for liquidity
Post by: Shentist on January 27, 2016, 10:01:11 pm
i understand why you guys want 1 coin to rule them all, but in reality every exchange will use their own coins, because they need to have
control what they are promising their customers. we as metaexchange can not take responsible of an openledger coin and if something happens to them or us,
everyone on the bitshares exchange will be hurt. so i think it is really a problem, but in the longrun bitshares get more from more unic partners.

we are trying to give our pairs some liquidity an providing at the moment support for this pairs:

https://bitshares.org/wallet/#/market/METAEX.BTC_BTS
https://bitshares.org/wallet/#/market/METAEX.BTC_BTC
https://bitshares.org/wallet/#/market/METAEX.BTC_OPENMUSE

so the idea is the same, most of the traders are used to look into BTC value, so we are trying to make METAEX.BTC pairs as liquid as possible. bitBTC is to illiquid to get this done - at least at the moment.
Title: Re: Radical ideas for liquidity
Post by: JonnyB on January 27, 2016, 10:05:15 pm
Maybe the committee could create and offer the main gateways a straight swap for their existing IOUBTCs to BitBTC.


Title: Re: Radical ideas for liquidity
Post by: abit on January 27, 2016, 10:34:01 pm
Maybe the committee could create and offer the main gateways a straight swap for their existing IOUBTCs to BitBTC.
Jonny, why don't you join the committee? Then you can do what you want.
Title: Re: Radical ideas for liquidity
Post by: BunkerChainLabs-DataSecurityNode on January 28, 2016, 01:58:34 am
The trading volume of USD:BTC over the last 24hrs is actually zero as it is on most days.

I like some of the ideas you suggested.. however this market you mentions has been made this way because the premium from what I understand is in the neighbourhood of 40% from market rate. Someone claimed to have done that to lock up the market so that they could profit from it.

Free market sure.. but when traders take advantage of the illquid markets and push the premiums far beyond any reasonable amount, they are effectively killing it. They poison the supply and thus destroy the demand.

I'm not a trader... but I have heard it time and again from people that the market pegs are so far off that they simply do not want to use smartcoins because it will cost too much.

People WANT to... but when they get into the market and see premiums that reach 10% plus.. it no longer makes sense to use them for their purpose, which is to be a stable reserve. Not at that premium. Utility is destroyed.

If you want to see more liquidity.. keep the premium within 3%. Sure you are not going to see massive gains on a few trade.. but smaller ones on a whole lot more.

All the other solutions where the system is introducing more money is effectively going to just give the same players who have set the premium too high to buy up any cheaper amounts and keep setting them higher isn't it? Then we are back to where people simply will not pay the premium and the market remains illiquid aren't we? Or is there something I am missing... again I am not a trader.

I think traders have to decide by their trades if they want to support the markets or not by the premiums they are setting. Otherwise we can see the result.  Again though.. this is what it seems from someone who isn't a trader.. if I a missing something let me know.

Aside from this.. the current markets as released in 2.0 I don't believe were meant to operate this way. Bond markets were suppose to be part of the equation for the launch of 2.0. Since we don't have that though we need to look at other options. I think some of the recent ideas are pretty decent..

N - same problem only bigger, but we are about to do a run anyways and we will see what happens - The committee or a worker proposal should use reserve pool funds to create smartcoins and sell them in to the market at feed price plus 10%
N - systemically impossible - Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time.
N - free market for gateways.. do we hire goons to enforce? :) - Get all gateways to offer the same btcUIA instead of each having their own separate ones. Could be a multisig wallet controlled by committee.
Y - I already have started working on this - Get the reserve pool to pay for a bitcoin-BitBTC bridge with guaranteed 2-way liquidity
Y - An easy enhancement - Limit trading pairs in the GUI to just USD vs XXX
Y - Acquisition is one way to get customers, but a deal like that can take a long time, and the cost of conversion tremendous - Buy an existing exchange like poloniex and migrate its backend over to bitshares.
N - Invites are ok though.. paying alts would produce diminished returns and do nothing for the target markets - Pay some altcoins that are struggling but have big communities to migrate their coins over to bitshares through proof of burn.

Akado concurred with the whole limited markets in GUI idea too. I don't think they need to be 100% limited, but they can be made more prominent... like on ohh.. say.. THEDEX! :)
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on January 28, 2016, 02:45:45 am
[member=37127]JonnyBitcoin[/member]

You and I have a different definition of radical.... those ideas seem rather tame to me.   :P

I have been cooking this idea in my brain that is as radical as radical gets. I think it would work without much blowback....

A. Bitshares needs to autonomously print BTS specifically to fund this feature
B. Bitshares shorts every SmartCoin, and puts them up for sale 10% over the price feed (the percentage and collateral amount can be set by the committee)
C. The amount of liquidity provided by this feature is set bet the committee (for example... $25,000 per SmartCoin 10% above the peg)
D. If/when the liquidity pool for any certain SmartCoin is running low, Bitshares autonomously prints more BTS so that the amount of liquidity set by the committee is maintained.
E. Instant liquidity is observed across all SmartCoin markets
F. Unintended benefit: Bitshares' position on Coinmarketcap is bolstered, so as to make sure we stay in the spotlight for at least another year or so. I think the coming year (or two) is very important for the future success of cryptocurrencies... we do not want to fall behind and out of the spotlight.

But... but... Coinhoarder....
A. Dilution will lower the value of BTS - The dilution for this feature would not lower the value of the BTS token, as it does not effect the demand. The supply on "paper" increases, but that supply never makes its way into the market. So, no downward pressure is ever applied onto the market from the BTS printed.
B. Smartcoins will no longer work on free market dynamics - This is why I suggest a wide (but snug) 10% peg. A 10% peg leaves a lot of wiggle room for profiteers or market makers to come along and naturally tighten the peg more so. The amount can be adjusted as needed, so it can start at a 5% peg until liquidity/adoption reaches a certain point, then it can be relaxed to 6%, then 7%, etc... as the market matures the percentage can increase and the "training wheels" taken off.
C. This seems very risky - Not if it is fully planned, peer reviewed, and everything is done autonomously by the blockchain.
D. What if the funds get margin called - Considering we are shorting with printed BTS, we can short with a very high percentage of collateral. Thus, it is unlikely a margin call ever occurs. If one does occur after setting an astronomical amount of collateral, then the BTS value is in the gutter of the gutter already, and Bitshares is already in dire straights (or likely dead.)
Title: Re: Radical ideas for liquidity
Post by: fav on January 28, 2016, 06:10:00 am
The dex is not a decentralized exchange without a functioning smartcoin. Trading UIAs is nice but can be done faster and cheaper on poloniex.
We are 4 months in to bts 2.0 and none of the smartcoins are liquid. Something big needs to change.
People keep saying we just need a bridge to smartcoins but nobody will provide that bridge without liquidity
Here are some radical ideas of how to increase liquidity.

- The committee or a worker proposal should use reserve pool funds to create smartcoins and sell them in to the market at feed price plus 10%
- Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time.
- Get all gateways to offer the same btcUIA instead of each having their own separate ones. Could be a multisig wallet controlled by committee.
- Get the reserve pool to pay for a bitcoin-BitBTC bridge with guaranteed 2-way liquidity
- Limit trading pairs in the GUI to just USD vs XXX
- Buy an existing exchange like poloniex and migrate its backend over to bitshares.
- Pay some altcoins that are struggling but have big communities to migrate their coins over to bitshares through proof of burn.

Loads of people are going to moan about these ideas but we need to prove a smartcoin works.
The trading volume of USD:BTC over the last 24hrs is actually zero as it is on most days.

I tend to agree with you. focus should be on one bitasset. we can't expect to get all of them running. if you mean with abandon a black swan shutdown of the other smartcoins - that's really radical :D but something has to change...
Title: Re: Radical ideas for liquidity
Post by: Akado on January 28, 2016, 10:20:38 am
[member=37127]JonnyBitcoin[/member]
A. Dilution will lower the value of BTS - The dilution for this feature would not lower the value of the BTS token, as it does not effect the demand. The supply on "paper" increases, but that supply never makes its way into the market. So, no downward pressure is ever applied onto the market from the BTS printed.

It doesn't need to. What matters is people's perception of what's happening. The simple idea of diluting will put many people off because they will immediately associate it with the merger and consequent price drop.

You could dilute, if people aren't aware of it your plan could work.
On the other hand even if you don't dilute, if people somehow think you're doing it, it will be a "merger" all over again.

People's perception matters a lot imo.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on January 28, 2016, 03:43:24 pm
[member=37127]JonnyBitcoin[/member]
A. Dilution will lower the value of BTS - The dilution for this feature would not lower the value of the BTS token, as it does not effect the demand. The supply on "paper" increases, but that supply never makes its way into the market. So, no downward pressure is ever applied onto the market from the BTS printed.

It doesn't need to. What matters is people's perception of what's happening. The simple idea of diluting will put many people off because they will immediately associate it with the merger and consequent price drop.

You could dilute, if people aren't aware of it your plan could work.
On the other hand even if you don't dilute, if people somehow think you're doing it, it will be a "merger" all over again.

People's perception matters a lot imo.

I honestly didn't expect you knuckleheads to take my solution seriously. This community is such a joke. You guys argue about trivial things as if they will have some great effect, and ignore the real solutions to problems. My solution solves the problem at hand... better than any other solution that anyone has brought up. You guys will end up wasting more money diluting (real, negative dilution... not the kind I've proposed here) shareholders to put band aids on the problem without ever fixing it. More band aids will be needed to replace the band aids that were ineffective, and so on and so forth.

I don't have time right now to explain fully, but most of Jonny's solutions are unacceptable because they either limit the functionality of Smartcoins/Bitshares, require unreasonable cooperation in between 3rd parties, are unreasonable due to legalities/logistics, or put a band aid on the issue without solving it.
Title: Re: Radical ideas for liquidity
Post by: Akado on January 28, 2016, 03:49:54 pm
[member=37127]JonnyBitcoin[/member]
A. Dilution will lower the value of BTS - The dilution for this feature would not lower the value of the BTS token, as it does not effect the demand. The supply on "paper" increases, but that supply never makes its way into the market. So, no downward pressure is ever applied onto the market from the BTS printed.

It doesn't need to. What matters is people's perception of what's happening. The simple idea of diluting will put many people off because they will immediately associate it with the merger and consequent price drop.

You could dilute, if people aren't aware of it your plan could work.
On the other hand even if you don't dilute, if people somehow think you're doing it, it will be a "merger" all over again.

People's perception matters a lot imo.

I honestly didn't expect you knuckleheads to take my solution seriously. This community is such a joke. You guys argue about trivial things as if they will have some great effect, and ignore the real solutions to problems. My solution solves the problem at hand... better than any other solution that anyone has brought up. You guys will end up wasting more money diluting (real, negative dilution... not the kind I've proposed here) shareholders to put band aids on the problem without ever fixing it. More band aids will be needed to replace the band aids that were ineffective, and so on and so forth.

I don't have time right now to explain fully, but most of Jonny's solutions are unacceptable because they either limit the functionality of Smartcoins/Bitshares, require unreasonable cooperation in between 3rd parties, are unreasonable due to legalities/logistics, or put a band aid on the issue without solving it.

Well, you suggested, we discussed it. What's the problem with that?

What you have to consider is not just how to solve one problem, but if the solution to that problem creates other new problems.

It's not that I don't like your idea, I've thought about that too. It sounds good. Thing is I'm divided because I know how most people react to "dilution". If it had no repercussions I would agree with it at 100% but for now I'm divided. I have also thought about using dilution to create assets and bring liquidity in, it makes sense, but I just don't know if it's worth the trouble, because, it's not up to you or me to decide. Most people hate the concept of dilution and even if this would bring in liquidity which I think it has good chances to, it could have other consequences. That's what we need to consider.
Title: Re: Radical ideas for liquidity
Post by: wallace on January 28, 2016, 04:03:00 pm
The dex is not a decentralized exchange without a functioning smartcoin. Trading UIAs is nice but can be done faster and cheaper on poloniex.
We are 4 months in to bts 2.0 and none of the smartcoins are liquid. Something big needs to change.
People keep saying we just need a bridge to smartcoins but nobody will provide that bridge without liquidity
Here are some radical ideas of how to increase liquidity.

- The committee or a worker proposal should use reserve pool funds to create smartcoins and sell them in to the market at feed price plus 10%
- Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time.
- Get all gateways to offer the same btcUIA instead of each having their own separate ones. Could be a multisig wallet controlled by committee.
- Get the reserve pool to pay for a bitcoin-BitBTC bridge with guaranteed 2-way liquidity
- Limit trading pairs in the GUI to just USD vs XXX
- Buy an existing exchange like poloniex and migrate its backend over to bitshares.
- Pay some altcoins that are struggling but have big communities to migrate their coins over to bitshares through proof of burn.

Loads of people are going to moan about these ideas but we need to prove a smartcoin works.
The trading volume of USD:BTC over the last 24hrs is actually zero as it is on most days.

 +5% +5%

after too many changes, have forgotten our original core product.
Title: Re: Radical ideas for liquidity
Post by: Empirical1.2 on January 28, 2016, 04:44:06 pm
I agree with applying an easy to implement radical solution to get a single BitAsset tightly pegged and cost effective to enter/exit.

I think there are varying ideas on how best to achieve it but I believe we should be trying the most simple to implement + cost effective measure that is likely to work on a single BitAsset & then gauge the results.

It shouldn't take to long to gauge it's efficacy and try something else if it's not.

We should also work on a more long term sustainable solution to the problem.





Title: Re: Radical ideas for liquidity
Post by: Akado on January 28, 2016, 06:02:58 pm
Committee should start by using the fees from the pool they collected. That would be a start. With these pumps and our volume reaching $50k that could help us go even higher. It's a chance we might not get!

But atm everyone will be busy discussing fees and once again, ignoring this.

Committee, could you please discuss how to use the fee pool? With this amount of volume this is a good chance!
Title: Re: Radical ideas for liquidity
Post by: Bhuz on January 28, 2016, 10:28:30 pm
Please read, vote and speak your mind

https://bitsharestalk.org/index.php/topic,21218.0.html

https://bitsharestalk.org/index.php/topic,21219.msg274553.html#new
Title: Re: Radical ideas for liquidity
Post by: puppies on January 28, 2016, 10:52:51 pm
A worker proposal funding committee-trade, which then sets a sell wall and a buy wall held by a bot would be perfect.  We don't need to worry about our bot making money.  It would be a service provided by the blockchain, and the only dilution would be funds that the account lost due to taking bad trades.

I would like to see sell walls at 2% above feed, and buywalls at 99% of feed.  If we could guarantee the ability to purchase USD, CNY, and BTC at 2% above feed then our gateways could use real bitassets rather than UIA's.  They would just need to charge a 2% transfer fee.  The closer we can get to the peg, the lower they could get their fees. 

I think BTC or USD would be the best market to start with.

Best of all this requires no real development.  I could write the bot myself, and would do so free of charge.  We could solve our problems ourselves without having to wait for the devs.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on January 29, 2016, 06:42:24 am
snip

Your posts confuse me. I am never certain if you are being sincere or sarcastic. Were you in favor of my proposal or not... I am confused.

I say we kick Nubits/Nushares in the teeth. If we implement a proposal similar to what I have proposed, then we will have a superior product in multiple ways. As it currently stands I cannot say that. They have done a much better job at liquidity which is pretty much the only thing people seem to care about (judging by Nubit/Tether/etc volume). I at first dismissed Nushares/Nubits, but have come to respect their implementation. Say what you will about it, but it works and it works well. I am now an investor in B&C and Nushares, simply because Bitshares has blown its lead, Nubits is highly liquid and popular (a lot more so than bitUSD), and I wanted to hedge my bet. I could see either implementation winning out, but I would prefer Bitshares win the war since it was my first love (as far as DEXs go).  8)

My proposal would give us a leg up on them because the liquidity would be provided autonomously... their liquidity system is very convoluted and requires the cooperation of a lot of people. We also have more than just a few FIAT derivatives, and can function as a well diversified exchange with GOLD, NASDAQ, etc... I personally want to use our exchange for many different assets but am not willing to pay the huge premium for things like gold, silver, etc.. I really want to purchase other commodities such as oil, stocks, and stock indexes but I can't.

As I mentioned in the first post.. it can be a temporary solution to liquidity and we can take the training wheels off if the exchange gains natural liquidity. It is a means to an end. It is intended to jump start activity on the exchange.
Title: Re: Radical ideas for liquidity
Post by: xeroc on January 29, 2016, 07:48:15 am
I agree with applying an easy to implement radical solution to get a single BitAsset tightly pegged and cost effective to enter/exit.

I think there are varying ideas on how best to achieve it but I believe we should be trying the most simple to implement + cost effective measure that is likely to work on a single BitAsset & then gauge the results.

It shouldn't take to long to gauge it's efficacy and try something else if it's not.

We should also work on a more long term sustainable solution to the problem.
How about we run a contest similar to the one on the testnet payed by a worker proposal. Something along the lines:

- 2 weeks preparations time
- fund your account with your own money
- trade for 4 weeks
- everyone can proof your profits on the chain
- the winner gets $1k paid by either the committee or a worker proposal
Title: Re: Radical ideas for liquidity
Post by: karnal on January 29, 2016, 11:15:03 am
The dex is not a decentralized exchange without a functioning smartcoin. Trading UIAs is nice but can be done faster and cheaper on poloniex.
We are 4 months in to bts 2.0 and none of the smartcoins are liquid. Something big needs to change.

Before even reading the rest of the thread... this x 1 million.
Title: Re: Radical ideas for liquidity
Post by: karnal on January 29, 2016, 11:16:26 am
- Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time.

Spoke too soon  :o
Title: Re: Radical ideas for liquidity
Post by: tbone on January 29, 2016, 05:41:59 pm
I've been saying from the start that we have too many versions of BTC, which is killing liquidity and adding to another problem i.e. a dizzying array of trading pairs.  So unifying the BTC tokens will solve more than one problem.  More on that below.

Regarding BitAssets, I don't think we need to abandon any, but perhaps the only BitAssets that should trade against BTS, at least for now, are BTC, CNY and USD.  Further, aside from unifying the BTC tokens, we should focus on supporting the creation of (and providing liquidity for) only one BItAsset, USD.  In addition to that, all other BitAssets aside from CNY (e.g. BitEUR, BitGold, BitSilver, BitOIL, etc.) should trade against USD only.  I'm 99% sure [member=5]bytemaster[/member] made a suggestion similar to this during a mumble session, so maybe he can talk about what it would take to make this happen. 

Back to unifying BTC.  This is critical.  But our hands have been tied because gateways all want their own tokens so they can capture the trading fees.  On one hand, I can't really blame them.   On the other hand, it defeats one of the purposes of the DEX -- pooled liquidity.  And since we desperately need liquidity, we MUST unify the BTC tokens into one main BTC asset that everything else trades against (aside from the BitAssets that trade only against BitUSD, as mentioned above). 

So how can we satisfy these seemingly conflicting interests?  I have an idea.  What if the fees generated by trades against the unified BTC asset were split among the gateways based on the % of BTC each is responsible for getting onto the DEX?   So let's say 10% of the BTC is on the DEX due to gateway services provided by metaexchange, 10% due to blocktrades, 20% due to OL, and the remaining 60% was purchased directly on the DEX.  So any trade against BTC would then be split based on those percentages.  I'm not sure how this would be implemented, but I'm sure it's possible and we need to do something!

By the way, keep in mind that the measures I'm proposing above must be done in conjunction with some of the other liquidity-building measures, as proposed by [member=37127]JonnyBitcoin[/member] and others.  Thoughts?
Title: Re: Radical ideas for liquidity
Post by: karnal on January 29, 2016, 06:15:49 pm
Regarding BitAssets, I don't think we need to abandon any, but perhaps the only BitAssets that should trade against BTS, at least for now, are BTC, CNY and USD

BTC is highly volatile.
CNY is not exactly stable right now.
USD is backed by a government ~$20 trillion in debt and a Federal Reserve not shy to keep on printing.

SGD, CHF, GOLD and SILVER maybe? I don't think we should do away with EUR/USD/BTC/CNY, to clarify. These (EUR/etc) are good for other things.. guess I'm looking at this more like a saver.

Totally with you on the unifying the BTC tokens though. And I see the same thing coming with OPEN.EUR etc. Soon enough there'll be dozens of markets for the same thing, all of them centralized solutions.. precisely the problem smartcoins proposed to solve.


edit: to clarify, I think serving as a stable store of value is one of the things missing from the crypto-space right now - and as you can likely tell from the text above, I don't think EUR/USD/CNY is the currency to do so.

There's hundreds of options already for speculating, but little to none to act as (stable/predictable) stores of value in the cryptospace (with one or two exceptions, but by and large the market is up for grabs). I think this might be an interesting market to capture.. all other crypto-traders coming in and out of the BTS ecosystem to store their profits while waiting for the right move to get back in the game, that kind of thing.
Title: Re: Radical ideas for liquidity
Post by: yvv on January 29, 2016, 06:45:09 pm
Quote
- Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time.

This is already being done by bitcash.
Title: Re: Radical ideas for liquidity
Post by: yvv on January 29, 2016, 06:50:36 pm
"Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time."
Definitely NOT. We don't use Dollars over here in Europe and neither does China.
 
The POS systems need AT LEAST those top 3 as liquid choices:
https://www.youtube.com/watch?v=GMECm8bqKaE&index=5&list=PLjbx3qSmDe7RYkRMIEuFyYyG7_vvKgou0
 
The free market UIA's will also become liquid as demand increases.
Just because it's slow to grow doesn't mean it's broke.

Focusing on bitUSD makes sense for establishing robust on/off ramps. This is the major obstacle for using bitshares now. Of course we will eventually need markets between major fiat currencies.
Title: Re: Radical ideas for liquidity
Post by: speedy on January 29, 2016, 11:23:40 pm
Best way to add liquidity: Autobridging

For example at the moment OpenBTC:USD has 0 orders. However OpenBTC can be traded for BTS via OpenBTC:BTS, which can be traded for USD at BTS:USD.

Therefore autobriding could combine those 2 operations into one atomic operation, and the GUI could automatically fill in the OpenBTC:USD market with the offers that can be filled by those atomisized operations.

The result is that all those separate UIA tokens on Openledger automatically become integrated. Of course the spread would be higher, but it would at least kickstart the OpenBTC:USD etc markets.

I asked BM a while back about whether Autobriding could appear in BitShares, and there were technical details to do with how order matching is done. Perhaps these are no longer the case in 2.0?

The concept comes from Ripple: https://wiki.ripple.com/Autobridging
Title: Re: Radical ideas for liquidity
Post by: yvv on January 29, 2016, 11:38:14 pm
The concept comes from Ripple: https://wiki.ripple.com/Autobridging

This is one of two best thing which ripple has. The other one is path finding, which means that you can have whatever asset in your wallet, and you can send payments in any other asset to receivers wallet, and the system finds the best exchange path for you.
Title: Re: Radical ideas for liquidity
Post by: Xeldal on January 29, 2016, 11:46:49 pm
Best way to add liquidity: Autobridging
...
The concept comes from Ripple: https://wiki.ripple.com/Autobridging

yup.  Here's an old thread.  never went anywhere.
https://bitsharestalk.org/index.php/topic,15118.msg195232.html#msg195232
Title: Re: Radical ideas for liquidity
Post by: Akado on January 29, 2016, 11:57:02 pm
I only gave it a quick read, but from what I understood, auto bridging could help solve the "issue" of having multiple types of BTC? Multiple markets get synthesized into the same order book? I think I would support a worker proposal for that unless it has any downside? But since Ripple is using it, it seems a proven model.

I really like this because it solves the problem I mentioned a few times of having multiple iliquid markets representing the same assets

thanks [member=448]Xeldal[/member] for bringing that up!
Title: Re: Radical ideas for liquidity
Post by: speedy on January 30, 2016, 12:25:22 am
yup.  Here's an old thread.  never went anywhere.

It didnt go anywhere because of technical reasons in the old 1.0 code IIRC.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on January 30, 2016, 01:49:33 am
I only gave it a quick read, but from what I understood, auto bridging could help solve the "issue" of having multiple types of BTC? Multiple markets get synthesized into the same order book? I think I would support a worker proposal for that unless it has any downside? But since Ripple is using it, it seems a proven model.

I really like this because it solves the problem I mentioned a few times of having multiple iliquid markets representing the same assets

thanks [member=448]Xeldal[/member] for bringing that up!

Without reading the proposal (and I'm admittedly not fully certain how Ripple works)... doesn't it cause an issue that bitBTC has different risks/value than openBTC has different risks/value than metaBTC ?? What happens to the other xBTC markets when OpenLedger/MetaExchange is defunct and the Bitcoins go missing?

Also, no one has provided an explanation as to why my proposal is so horrible, yet everyone is ignoring it as such. Please provide reasons so I can at least attempt to refute them (or admit to myself that it is flawed and I'm an idiot.)
Title: Re: Radical ideas for liquidity
Post by: BunkerChainLabs-DataSecurityNode on January 30, 2016, 02:23:27 am
I only gave it a quick read, but from what I understood, auto bridging could help solve the "issue" of having multiple types of BTC? Multiple markets get synthesized into the same order book? I think I would support a worker proposal for that unless it has any downside? But since Ripple is using it, it seems a proven model.

I really like this because it solves the problem I mentioned a few times of having multiple iliquid markets representing the same assets

thanks [member=448]Xeldal[/member] for bringing that up!

It doesn't solve the liquidity problem. It does eliminate the liquidity problem causing the premium to go out of wack. We still would need more people trading and liquidity to have a real market.

What this would mean is.. there would be no reason for other xBTC tokens other than if they want to operate their own markets for whatever reason.

The benefit to this sidechain arrangement would be our DEX for trading. It would be secure and decentralized as opposed to centralized trade markets. It could also potentially mean using bitshare for bitcoin transfers. Though that could be complicated.

It also makes bitshares a great place to store bitcoin in a decentralized way.
Title: Re: Radical ideas for liquidity
Post by: puppies on January 30, 2016, 02:32:34 am
I only gave it a quick read, but from what I understood, auto bridging could help solve the "issue" of having multiple types of BTC? Multiple markets get synthesized into the same order book? I think I would support a worker proposal for that unless it has any downside? But since Ripple is using it, it seems a proven model.

I really like this because it solves the problem I mentioned a few times of having multiple iliquid markets representing the same assets

thanks [member=448]Xeldal[/member] for bringing that up!

Without reading the proposal (and I'm admittedly not fully certain how Ripple works)... doesn't it cause an issue that bitBTC has different risks/value than openBTC has different risks/value than metaBTC ?? What happens to the other xBTC markets when OpenLedger/MetaExchange is defunct and the Bitcoins go missing?

Also, no one has provided an explanation as to why my proposal is so horrible, yet everyone is ignoring it as such. Please provide reasons so I can at least attempt to refute them (or admit to myself that it is flawed and I'm an idiot.)

We could do the exact same thing as your proposal right now, with a worker proposal to fund trading done by the committee-trade account.  Specifically while your proposal would be more seamless, it does require dev work, which would delay it.

I think the idea should be discussed.  Depending upon how tight you want to hold the peg, and how much collateral you use for the bitassets there could be unintended consequences.  It is risky, but it could really pay off, and could be exactly what we need to move us to the next level.  There has been a lot of discussion of it already in one form or another.  There are many people who have rejected it out of hand, but I don't think they have come up with any earth shattering reasons why.  Its mainly that they don't like the idea, or think its too risky.  afair
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on January 30, 2016, 02:44:29 am
[member=37127]JonnyBitcoin[/member]

I finally have some time to go over your ideas. In my opinion, some of them are good, some of them are not.

- The committee or a worker proposal should use reserve pool funds to create smartcoins and sell them in to the market at feed price plus 10%

I agree. This should have happened yesterday. Fortunately, I think everyone is at least close to the same page on this. However, I posit that the reserve pool liquidity will be bought up faster than it will be generated. So, I consider this to be putting a "band aid" on the problem and not a fix.

- Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time.

I disagree. Unfortunately, we will never be able to compete with Nubits/Tether as far as liquidity (as Bitshares currently exists.) Also, one of Bitshares' features over other solutions (Nubits/Tether) is that we can more easily issue other types of SmartCoins (many FIAT, commodity, stock, indexes, etc.) By doing this we are giving up one of our best features versus other competing implementations.

- Get all gateways to offer the same btcUIA instead of each having their own separate ones. Could be a multisig wallet controlled by committee.

This has a similar issue as the last proposal:
Without reading the proposal (and I'm admittedly not fully certain how Ripple works)... doesn't it cause an issue that bitBTC has different risks/value than openBTC has different risks/value than metaBTC ?? What happens to the other xBTC markets when OpenLedger/MetaExchange is defunct and the Bitcoins go missing?

To elaborate, there are more dynamics as well... what if I trust Ronnie but not Shentist? Now, all BTC markets lose my volume instead of just metaBTC or openBTC.

- Get the reserve pool to pay for a bitcoin-BitBTC bridge with guaranteed 2-way liquidity
The reserve pool is not a huge amount of money. If we are already tightening the peg on SmartCoins, I don't think we can afford to tighten the peg on other markets. As stated above... I posit that the reserve pool liquidity will be bought up faster than it will be generated. So, I consider this places a "band aid" on the problem and doesn't solve the issue.

- Limit trading pairs in the GUI to just USD vs XXX
Again, this limits Bitshares functionality and eliminates our competitive advantage as far as features vs competitors features.

- Buy an existing exchange like poloniex and migrate its backend over to bitshares.
This seems unreasonable considering legal, regulatory, and logistics. Not to mention the money it would cost to buy an exchange with a decent amount volume.

- Pay some altcoins that are struggling but have big communities to migrate their coins over to bitshares through proof of burn.

I think this is a good idea. This is similar to my idea here: https://bitsharestalk.org/index.php/topic,21124.0.html

Except, that your idea provides for more users/transaction fees/a bigger community/etc... and mine provides for a way of directly paying for developers without certain downward pressure on the value. Really, I think we could use it for both. This could be a wide-reaching feature... proof of burn and proof of funding. We could monitor other blockchains by allowing network node (or witnesses/committee/users/gateways) to monitor other blockchains' APIs. Both block explorer and exchange APIs, and make the price feed script easy to switch API data sources (so risks are mitigated by the median being used.) If the active nodes can all agree a transaction occurred, the blockchain can autonomously print them their fair share of BTS. There are more secure implementations available.. that would be a quick "down and dirty" implementation.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on January 30, 2016, 02:49:37 am
I only gave it a quick read, but from what I understood, auto bridging could help solve the "issue" of having multiple types of BTC? Multiple markets get synthesized into the same order book? I think I would support a worker proposal for that unless it has any downside? But since Ripple is using it, it seems a proven model.

I really like this because it solves the problem I mentioned a few times of having multiple iliquid markets representing the same assets

thanks [member=448]Xeldal[/member] for bringing that up!

It doesn't solve the liquidity problem. It does eliminate the liquidity problem causing the premium to go out of wack. We still would need more people trading and liquidity to have a real market.

What this would mean is.. there would be no reason for other xBTC tokens other than if they want to operate their own markets for whatever reason.

The benefit to this sidechain arrangement would be our DEX for trading. It would be secure and decentralized as opposed to centralized trade markets. It could also potentially mean using bitshare for bitcoin transfers. Though that could be complicated.

It also makes bitshares a great place to store bitcoin in a decentralized way.

Ah... I remember the term (what I was trying to describe above).... there is no fungibility. 1 metaBTC != 1 openBTC != 1 tradeBTC. When openBTC goes defunct, how does that work? I didn't know I was purchasing openBTC, nor metaBTC, nor tradeBTC. All BTC assets are tainted...? Should we just accept that? Those unlucky ones with openBTC are out of luck and the lucky ones with metaBTC/tradeBTC are golden? I didn't know which kind of BTC I was buying, so how is this fair?

As described above, there are other set backs. If I don't trust Shentist then all xBTC markets lose my volume and transfer fees, leading to lower volume across all markets as a whole instead of one market individually.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on January 30, 2016, 03:02:42 am
I only gave it a quick read, but from what I understood, auto bridging could help solve the "issue" of having multiple types of BTC? Multiple markets get synthesized into the same order book? I think I would support a worker proposal for that unless it has any downside? But since Ripple is using it, it seems a proven model.

I really like this because it solves the problem I mentioned a few times of having multiple iliquid markets representing the same assets

thanks [member=448]Xeldal[/member] for bringing that up!

Without reading the proposal (and I'm admittedly not fully certain how Ripple works)... doesn't it cause an issue that bitBTC has different risks/value than openBTC has different risks/value than metaBTC ?? What happens to the other xBTC markets when OpenLedger/MetaExchange is defunct and the Bitcoins go missing?

Also, no one has provided an explanation as to why my proposal is so horrible, yet everyone is ignoring it as such. Please provide reasons so I can at least attempt to refute them (or admit to myself that it is flawed and I'm an idiot.)

We could do the exact same thing as your proposal right now, with a worker proposal to fund trading done by the committee-trade account.  Specifically while your proposal would be more seamless, it does require dev work, which would delay it.

I think the idea should be discussed.  Depending upon how tight you want to hold the peg, and how much collateral you use for the bitassets there could be unintended consequences.  It is risky, but it could really pay off, and could be exactly what we need to move us to the next level.  There has been a lot of discussion of it already in one form or another.  There are many people who have rejected it out of hand, but I don't think they have come up with any earth shattering reasons why.  Its mainly that they don't like the idea, or think its too risky.  afair

I don't see it as risky considering we are printing BTS, and we can put as much collateral down as we like. Hell, we could do 100x collateral. The price would have to fall to 1% of what it is now for a margin call. At that time the market cap would be approximately $90,391.89, or with 1000x collateral the price would have to be 0.1% of what it is now for a margin call. At that time the market cap would be approximately $9039.19 ... Wouldn't you consider Bitshares to already be in dire straights and on its death bed by that point? If it is in the latter position, then I think it is quite likely that the SmartCoins are no longer backed by a sufficient amount of BTS, and Bitshares could get into this position without ever passing this proposal. This is an inherent risk with SmartCoins (with or without my proposal.)

Re: Dilution is bad

I understand the word dilution has a very negative connotation, however I think that this kind of dilution is not bad. It never makes its way into the market. It is always autonomously shorted in SmartCoins purely for the use of providing liquidity. There is never any downward pressure on the market. In supply and demand, supply only affects demand if it makes its way to the BTS/"off ramp" markets (BTS/BTC, BTS/USD, etc.. any asset that isn't a smart contract on Bitshares). This BTS never makes its way there because it is autonomously shorted purely for liquidity. People hear the word dilution and automatically think "that's bad", but I don't think that is always necessarily the case. All dilution is not created equally.

Dilution for developer pay can and will exert negative value force on the BTS off ramps. I agree this kind of dilution is bad. However, I am not so sure the kind of dilution I am proposing is bad... or at least no one has convinced me yet.
Title: Re: Radical ideas for liquidity
Post by: BunkerChainLabs-DataSecurityNode on January 30, 2016, 03:21:14 am
I only gave it a quick read, but from what I understood, auto bridging could help solve the "issue" of having multiple types of BTC? Multiple markets get synthesized into the same order book? I think I would support a worker proposal for that unless it has any downside? But since Ripple is using it, it seems a proven model.

I really like this because it solves the problem I mentioned a few times of having multiple iliquid markets representing the same assets

thanks [member=448]Xeldal[/member] for bringing that up!

It doesn't solve the liquidity problem. It does eliminate the liquidity problem causing the premium to go out of wack. We still would need more people trading and liquidity to have a real market.

What this would mean is.. there would be no reason for other xBTC tokens other than if they want to operate their own markets for whatever reason.

The benefit to this sidechain arrangement would be our DEX for trading. It would be secure and decentralized as opposed to centralized trade markets. It could also potentially mean using bitshare for bitcoin transfers. Though that could be complicated.

It also makes bitshares a great place to store bitcoin in a decentralized way.

Ah... I remember the term (what I was trying to describe above).... there is no fungibility. 1 metaBTC != 1 openBTC != 1 tradeBTC

When openBTC goes defunct, how does that work? I didn't know I was purchasing openBTC, nor metaBTC, nor tradeBTC.

All BTC assets are tainted...? Should we just accept that? Those unlucky ones with openBTC are out of luck and the lucky ones with metaBTC/tradeBTC are golden?

There is no reason why all of them cannot move to this one market.. or for any individual to decide they want their balance to be in bitBTC. As I said though, some may choose to maintain their own markets for various reasons. They continue as IOUs with counterparty risk. These would be zero counterparty risk trading against fully 100% collateralized BTC balances without any spreads/conversions on exit.

I think what it will do is make the other BTC IOU markets illiquid because all of the action would be in the bitBTC markets. Mainly because I think that is where everyone coming to the DEX to trade is going to want that only. Do you want a piece of paper saying you own 10oz of gold.. or do you want a stick of 10oz of gold in your hand? Of course you want the gold! :)

I keep saying bitBTC but I think it would need a new market.. otherwise there is going to be real confusion about what is a UIA, a Smartcoin, and a Sidechain Asset. So maybe call this scBTC.. or more descript.. realBTC. :)

This is all an experiment. 
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on January 30, 2016, 03:42:25 am
There is no reason why all of them cannot move to this one market.. or for any individual to decide they want their balance to be in bitBTC. As I said though, some may choose to maintain their own markets for various reasons. They continue as IOUs with counterparty risk. These would be zero counterparty risk trading against fully 100% collateralized BTC balances without any spreads/conversions on exit.

I think what it will do is make the other BTC IOU markets illiquid because all of the action would be in the bitBTC markets. Mainly because I think that is where everyone coming to the DEX to trade is going to want that only. Do you want a piece of paper saying you own 10oz of gold.. or do you want a stick of 10oz of gold in your hand? Of course you want the gold! :)

I keep saying bitBTC but I think it would need a new market.. otherwise there is going to be real confusion about what is a UIA, a Smartcoin, and a Sidechain Asset. So maybe call this scBTC.. or more descript.. realBTC. :)

This is all an experiment.

Yes, it would definitely need its own market. Otherwise, I can see the benefits if you are separating it from the SmartCoin bitBTC.

However, I think you must admit it makes the whole realBTC market more risk prone. I am not sure if that is a good thing or a bad thing. I assumed it was bad in my posts above because the risks the UIA would be greater of the value no longer closely resemble the value of BTC at some point (eventually... an exchange will go defunct). Alternatively, you could look at the same time as a good thing because the risks of total value loss (the realBTC equaling 0) is lower since the risk is mitigated across exchanges. After more thought, this causes issues because those that don't act quickly could have their overpriced sell/buy orders filled. That would make for an unhappy community and PR event.

So, are the combined risks of exchange default across a UIA SmartCoin markets a good thing or a bad thing? I am sure I am not mentioning a complete list of pros and cons of both sides (I have mentioned at least one other up-thread)...
Title: Re: Radical ideas for liquidity
Post by: BunkerChainLabs-DataSecurityNode on January 30, 2016, 04:24:26 am
There is no reason why all of them cannot move to this one market.. or for any individual to decide they want their balance to be in bitBTC. As I said though, some may choose to maintain their own markets for various reasons. They continue as IOUs with counterparty risk. These would be zero counterparty risk trading against fully 100% collateralized BTC balances without any spreads/conversions on exit.

I think what it will do is make the other BTC IOU markets illiquid because all of the action would be in the bitBTC markets. Mainly because I think that is where everyone coming to the DEX to trade is going to want that only. Do you want a piece of paper saying you own 10oz of gold.. or do you want a stick of 10oz of gold in your hand? Of course you want the gold! :)

I keep saying bitBTC but I think it would need a new market.. otherwise there is going to be real confusion about what is a UIA, a Smartcoin, and a Sidechain Asset. So maybe call this scBTC.. or more descript.. realBTC. :)

This is all an experiment.

Yes, it would definitely need its own market. Otherwise, I can see the benefits if you are separating it from the SmartCoin bitBTC.

However, I think you must admit it makes the whole realBTC market more risk prone. I am not sure if that is a good thing or a bad thing. I assumed it was bad in my posts above because the risks the UIA would be greater of the value no longer closely resemble the value of BTC at some point (eventually... an exchange will go defunct). Alternatively, you could look at the same time as a good thing because the risks of total value loss (the realBTC equaling 0) is lower since the risk is mitigated across exchanges. After more thought, this causes issues because those that don't act quickly could have their overpriced sell/buy orders filled. That would make for an unhappy community and PR event.

So, are the combined risks of exchange default across a UIA SmartCoin markets a good thing or a bad thing? I am sure I am not mentioning a complete list of pros and cons of both sides (I have mentioned at least one other up-thread)...

I really didn't get the point you were trying to make here about realBTC being more risk prone. It's gold in hand instead of a paper promising gold.. how is that risk prone?

UIA markets can still exist.. at present there is a premium to use them. If you have realBTC that doesn't come with this premiums then demand is going to go there unless there is some other creative use for those UIA markets.

It's just another option.. how people/businesses choose to use it will be completely up to them. Though I already gave a really good reason for why people would prefer to have gold in hand instead of paper promising it.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on January 30, 2016, 04:37:51 am
It's gold in hand instead of a paper promising gold.. how is that risk prone?
It is not gold in hand. It is a derivative backed by different methods than SmartCoins. It is backed by wallets in control of the exchanges and is still subject to risks- just different risks than SmartCoins. I am not convinced yet that the pros outweigh the cons. I am not sure what would happen in all these scenarios...

What if one exchange gets hacked (if the BTC is stored in their own separate wallets)? Or, several of them are hacked and all funds are compromised (if the BTC stored is in a multi-signature address controlled by exchanges)? What if the exchanges don't agree on who/what/where/when about BTC deposits/withdrawals? I suppose everyone would monitor the BTC chain as well as a notary, and have a way to overrule a suddenly malicious (hacked) exchange? What if the two smaller exchanges blackmail the one large exchange and steal its funds?
Title: Re: Radical ideas for liquidity
Post by: BunkerChainLabs-DataSecurityNode on January 30, 2016, 05:19:07 am
It's gold in hand instead of a paper promising gold.. how is that risk prone?
It is not gold in hand. It is a derivative backed by different methods than SmartCoins. It is backed by wallets in control of the exchanges and is still subject to risks- just different risks than SmartCoins. I am not convinced yet that the pros outweigh the cons. I am not sure what would happen in all these scenarios...

What if one exchange gets hacked (if the BTC is stored in their own separate wallets)? Or, several of them are hacked and all funds are compromised (if the BTC stored is in a multi-signature address controlled by exchanges)? What if the exchanges don't agree on who/what/where/when about BTC deposits/withdrawals? I suppose everyone would monitor the BTC chain as well as a notary, and have a way to overrule a suddenly malicious (hacked) exchange? What if the two smaller exchanges blackmail the one large exchange and steal its funds?

My bad.. I learned today that sidechaining BTC is possible and this  is what I was actually referring to.. autobridging as ripple does it is cute compared to what I am actually talking about.

We are just talking about two different things here.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on January 30, 2016, 06:44:32 pm
It's gold in hand instead of a paper promising gold.. how is that risk prone?
It is not gold in hand. It is a derivative backed by different methods than SmartCoins. It is backed by wallets in control of the exchanges and is still subject to risks- just different risks than SmartCoins. I am not convinced yet that the pros outweigh the cons. I am not sure what would happen in all these scenarios...

What if one exchange gets hacked (if the BTC is stored in their own separate wallets)? Or, several of them are hacked and all funds are compromised (if the BTC stored is in a multi-signature address controlled by exchanges)? What if the exchanges don't agree on who/what/where/when about BTC deposits/withdrawals? I suppose everyone would monitor the BTC chain as well as a notary, and have a way to overrule a suddenly malicious (hacked) exchange? What if the two smaller exchanges blackmail the one large exchange and steal its funds?

My bad.. I learned today that sidechaining BTC is possible and this  is what I was actually referring to.. autobridging as ripple does it is cute compared to what I am actually talking about.

We are just talking about two different things here.

I am confused now haha. I am not even certain all my criticisms of that proposal are valid after giving it more though.. I made some assumptions as to how it would be setup/organized and if (or not) it would use multisignature addresses. I think it should be discussed more, and I think it is possibly a good solution if it can be made to work and doesn't cause any issues.

However, I still would not consider this as a "sure thing" as far as fixing our liquidity problems. To be honest, the only proposal I see as being a "sure thing" to fix liquidity is mine so far. I am of course biased, but no one has been able to explain why it would not work (other than make blanket statements such as "it is a horrible idea" etc... which is not helpful at all.)
Title: Re: Radical ideas for liquidity
Post by: prutser on January 31, 2016, 10:30:43 am
Here is maybe a idea for fixing liquidity problems:
 - make youtube movies about bitshares usecases
 - make understandable tutorials (not cli man mages :))

for some unknown reasons i like bitshares, but i have a damn hard time to understand what kind of things you can do with bitshare platform.

I really think that would help poeple adopting bitshares, there for more liquidity.
Title: Re: Radical ideas for liquidity
Post by: xeroc on January 31, 2016, 10:49:21 am
I agree. Thing is, BitShares *is* way more complex than many (if not all) other crypto projects.
Title: Re: Radical ideas for liquidity
Post by: bitacer on January 31, 2016, 01:04:25 pm

Here is maybe a idea for fixing liquidity problems:
 - make youtube movies about bitshares usecases
 - make understandable tutorials (not cli man mages :))

for some unknown reasons i like bitshares, but i have a damn hard time to understand what kind of things you can do with bitshare platform.

I really think that would help poeple adopting bitshares, there for more liquidity.
 

This is an excellent example of what potential users expect from the platform.  There will be tons of features available but  just like those informercials on tv , people first need to see what they are used for .
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on January 31, 2016, 07:03:59 pm
Here is my proposal fully explained. The PDF version is much easier to follow and read. It is available here: http://docdro.id/2OcoImM (http://docdro.id/2OcoImM)

Quote
Autonomous SmartCoin Liquidity Funded by Dilution

How It Works:
1.   Bitshares autonomously prints BTS specifically for the purpose of funding liquidity operations.
2.   Bitshares shorts every committee-issued SmartCoin, and puts them up for sale at an arbitrary percentage over the price feed.
3.   The percentage the SmartCoins are sold over the price feed, the amount of liquidity provided for each SmartCoin market and the amount of collateral should be determined by the committee (and thus can be adjusted whenever the community deems it is necessary.)
4.   Proceeds from the sales can be burned, or they can be used to resupply the liquidity pools for each SmartCoin… it does not matter.
5.   If the liquidity pool for any certain SmartCoin is running low, Bitshares can autonomously print more BTS and short the SmartCoin, so that the amount of liquidity provided (which is again set by the committee) is maintained.
        a.   Note: This step would only be necessary if the committee adds more SmartCoins (such as bitAPPLE, bitGOOGLE, etc.) to the DEX. (see How It Works #7)
6.   Instant liquidity is observed across all SmartCoin markets, effectively bootstrapping DEX liquidity and fixing one of Bitshares’ most glaring problems.
7.   Considering the autonomous liquidity is provided at an arbitrary amount above the peg, Bitshares will make a profit each time these liquidity operations are utilized. Thus, the amount of funds available for these liquidity operations will grow in time without the need for any dilution. This profit can be used to provide more liquidity, or it can be burned.
8.   As “natural liquidity” (liquidity provided by actual users) grows, the committee can lower the amount of liquidity provided autonomously. Effectively, this proposal works as training wheels on a bicycle. As soon as the DEX has sufficient “natural liquidity”, all autonomous liquidity operations can cease and the BTS/SmartCoins that were printed can be burned.
       a.   Autonomous liquidity operations can be ceased on a market-by-market basis, as inherently some markets will be dynamically more liquid than others.

Pros:

1.   Liquidity for SmartCoins traded on the DEX, which is arguably the biggest issue that Bitshares faces, would instantly be available as soon as this proposal is programed and implemented.
       a.   Liquidity is one of the things that Bitshares’ competitors (FIAT-pegged cryptocurrencies) do better. Nubits, Tether, etc. have a ludicrously larger amount of liquidity than our bitFIAT SmartCoins. This proposal levels the playing field in regards to liquidity.
i.   Furthermore, the autonomous liquidity operations as I propose them would work on all SmartCoin markets so we would have a competitive advantage of many different liquid assets (bitOIL, bitAPPLE, bitNASDAQ, etc.)
       b.   There are other projects that are (or have) implemented a decentralized exchange (B&C Exchange, Elephant, InstantDEX, Lykke, etc.) As evidenced by centralized exchanges’ volumes, users largely tend to trade on the exchanges that have the greatest volume and liquidity. This proposal would cement Bitshares’ stranglehold on the DEX market as users would flock to the DEX with the most liquidity.
       c.   Many Bitshares’ users would like to user other more obscure SmartCoins like bitOIL, bitNASDAQ, etc. However, the DEX having low liquidity makes these SmartCoins a non-starter.
              i.   I personally want to use our exchange for many different assets but am not willing to pay the huge premium for things like gold, silver, etc... I really want to purchase other commodities such as oil, stocks, and stock indexes but I can't. I know I am not alone because there have been many threads stating the same thing.
2.   Autonomous liquidity operations are a means to an end. As soon as enough “natural liquidity” is present on the DEX, autonomous liquidity operations can cease and the BTS/SmartCoins burned. This proposal is simply intended to jump start volume and liquidity on the DEX. Eventually, the DEX will be able to stand on its own two feet with “natural liquidity” and autonomous liquidity operations can cease.
       a.   See How It Works #8
3.   Bitshares' position as far as market capitalization web sites (like coinmarketcap.com) is bolstered, so as to make sure it stays in the spotlight for at least the immediate to near future.
4.   Nubits’ liquidity operations take a lot of cooperation in between a lot of different parties. It takes a small army of people to hold the Nubits market peg. Bitshares has a superior advantage in these regards considering the DEX is located on-chain. Thus, Bitshares’ liquidity operations can be made to be almost purely autonomous which will require a much smaller amount of “man power” when it comes to providing liquidity, monitoring liquidity, etc.

Cons:
1.   The community will need to be educated that all dilution is not created equally, and that dilution for autonomous liquidity operations is not equal to dilution to pay individuals for certain services (developing, advertising, etc.)
       a.   The former has no effect on the “effective supply” of BTS because it never makes its way to a sell order on the BTS off ramp markets (BTS/USD, BTS/BTC, Etc.) Thus, the former has no effect on the value of BTS.
       b.   The latter always (at least eventually) has negative effect on the value of BTS, because it always makes its way to a sell order on the BTS off ramps. Whether the individual needs to cover expenses, diversify their pay, or anything else… this kind of dilution can and will make its way to a sell order on the BTS off ramp markets.
       c.   See Myths #1

Myths:
1.   Dilution will lower the value of BTS.
       a.   I understand the word dilution has a very negative connotation. People hear the word dilution and automatically think "that's bad", but I don't think that is always necessarily the case. All dilution is not created equally. The dilution for this feature would not lower the value of the BTS token, as it does not affect the demand. The supply on "paper" increases, but that supply never makes its way into the market. So, no downward pressure is ever applied onto the market from the BTS printed.
                i.   Dilution for the purpose of autonomous liquidity operations will not affect Bitshares’ value, because it never makes its way into the “BTS off ramp markets” (BTS/BTC, BTS/USD, etc... any asset that isn't a smart contract on Bitshares). The dilution is always autonomously shorted to create SmartCoins purely for the use of providing liquidity. Thus, there is never any downward pressure on the market. In supply and demand, the supply only affects demand if it makes its way to the “BTS off ramp markets".
               ii.   Alternatively, Dilution for developer (or any other type of worker) pay can and will exert negative value force on the “BTS off ramp markets”. Developers need to pay expenses, diversify their holdings, and sell for many other reasons. They should be able to do this freely, because if they can’t then there is no reason for anyone to work for Bitshares’ (if there are extreme limitations attached.) I agree this kind of dilution can (and/or will) negatively affects Bitshares’ value since it almost certainly eventually enters “BTS off ramp markets”.
2.   Smartcoins will no longer work on free market dynamics.
       a.   A limit should be hardcoded into the Bitshares protocol as to how close to the peg the autonomous liquidity operations can sell at. As long as a sufficient percentage is hardcoded into the protocol, then it will leave enough room for shorts or market makers to come along and “naturally” tighten the peg more so.
       b.   This is why I suggest starting with a wide 5% to 10% peg. This leaves a lot of wiggle room for shorts and market makers to profit. The amount can be adjusted as needed. So, it can start at a 5% peg until the “natural liquidity” reaches a certain point, then it can be relaxed to 6%, then 7%, etc. As the market matures the percentage can increase and the "training wheels" taken off. Eventually, the autonomous liquidity operations will cease altogether once there is a sufficient amount of “natural liquidity”.
               i.   See How It Works #3 and #8 as to how the peg can be adjusted and the definition of “natural liquidity”.
3.   This seems very risky.
       a.   Everything is done autonomously on a publicly auditable blockchain, so all operations could be monitored by shareholders.
       b.   I don't see it as risky considering we are printing BTS, and we can put as much collateral down as we like. Hell, we could do 100x collateral. The price would have to fall to 1% of what it is now for a margin call. At that time the market cap would be approximately $90,391.89, or with 1000x collateral the price would have to be 0.1% of what it is now for a margin call. At that time the market cap would be approximately $9039.19 ... Wouldn't you consider Bitshares to already be in dire straits and on its death bed by that point? If it is in the latter position, then I think it is quite likely that the SmartCoins are no longer backed by a sufficient amount of BTS, and Bitshares could get into this position without ever passing this proposal. This is an inherent risk with SmartCoins (with or without my proposal.)
4.   What if the funds get margin called?
       a.   Considering we are shorting with printed BTS, we can short with a very high percentage of collateral. Thus, it is unlikely a margin call ever occurs. If one does occur after setting an astronomical amount of collateral, then the BTS value is in the “gutter of the gutter” already and Bitshares is already in dire straits (or likely dead.)

I also forgot to add a rather obvious pro to the "pros and cons"... demand for the BTS token would increase due to the added utility (more SmartCoins would be able to trade.. bitOIL, bitNASDAQ, etc.) and there would be much better liquidity on the DEX.
Title: Re: Radical ideas for liquidity
Post by: JonnyB on January 31, 2016, 07:44:41 pm
[member=16778]CoinHoarder[/member] i like this idea it think it makes a lot of sense.
I also think it would be very bullish for the bts price

When you say print bts, do you mean take from the reserve pool?
Have you though about what happens with force liquidations?

Title: Re: Radical ideas for liquidity
Post by: Shentist on January 31, 2016, 08:00:12 pm
[member=16778]CoinHoarder[/member]

interesting concept.

we should discuss it.

if you look from a different ankle this is so far from dilution we should rename it.

what we would doing is to give every user the possibility to go into a bitasset instantly without a counterparty, because bitshares is the counterparty. The blockchain would only "loose" if the price will fall much lower then now, at this point if everyone is settling the bitasset, the network will loose or would be diluting the share supply.

on point more. if the bitshares price is rising we would have the chance to decrease the bitshares supple, because if the network can buy his short position back, we would decrease the total supply.
Title: Re: Radical ideas for liquidity
Post by: puppies on January 31, 2016, 09:00:08 pm
Downsides relate to the amount of collateral.  If you go high collateral you risk pushing everyone else out of shorting due to the increased demand for settling.  If you go low collateral you risk dilution. 
Title: Re: Radical ideas for liquidity
Post by: abit on January 31, 2016, 10:52:14 pm
If the system dilutes unlimited BTS for market making, what will happen when a whale or a group of whales manipulates the price of BTS?
* buy the BTAs which are borrowed via dilution, dump BTS to external exchange, settle
* borrow BTA, and sell to the system, pump BTS on external exchanges, buy BTA back from system

Risks are too high IMO.

If price is decided by external exchanges, to be safe, fund for market making inside Dex have to be much less than volume/depth of external exchanges. However, if the fund are too few, it makes little sense, since no enough liquidity will be provided to the Dex..

So the Dex should find price by itself. For example run a LMSR bot with huge fund. But how to peg?

So a possible solution would be, do market making on external exchanges and Dex. When volumes on external exchanges are high, market making on the dex will be safe. If no depth on external exchanges, dex will die.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 01, 2016, 02:17:12 am
When you say print bts, do you mean take from the reserve pool?
No, I mean print BTS as in... out of thin air like Bitshares does for worker/delegate dilution.

Have you though about what happens with force liquidations?
See 3B and 4 under Myths
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 01, 2016, 02:28:48 am
[member=16778]CoinHoarder[/member]

interesting concept.

we should discuss it.

if you look from a different angle this is so far from dilution we should rename it.
I agree, dilution as I've been using it in regards to this proposal, is quite different from other dilution. Perhaps I have been wording it incorrectly in my previous posts, because you are the first to agree with me on this point (or at least voice their agreement.)

what we would doing is to give every user the possibility to go into a bitasset instantly without a counterparty, because bitshares is the counterparty.
This is a good way to describe it.

The blockchain would only "lose" if the price will fall much lower then now, at this point if everyone is settling the bitasset, the network will loose or would be diluting the share supply.
I agree the network would lose if the price falls and the SmartCoins become under collateralized. However, I disagree with the latter (bolded) part. These people paid, above the feed price, for the SmartCoin. Is it really dilution? In my opinion the risks of holding SmartCoins should be weighted more towards BTS shareholders than SmartCoin owners.

on point more. if the bitshares price is rising we would have the chance to decrease the bitshares supply, because if the network can buy his short position back, we would decrease the total supply.
Good point... I did not think about that.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 01, 2016, 02:45:37 am
Downsides relate to the amount of collateral.  If you go high collateral you risk pushing everyone else out of shorting due to the increased demand for settling.  If you go low collateral you risk dilution.

Good point, thank you! I am finally getting some valid criticisms (more than negative blanket statements.)

I will have to think about this one, because I didn't consider that creating more SmartCoins from printed BTS would increase the demand for settling. I think you are right, statistically, you have to assume that it will increase the demand for settling. Profits from liquidity operations and/or the fee pool could at least partially fund that increase, but there is a possibility of having a "run on the bank" ... if a lot of people force settled at the same time.

You are correct about going to low. Too little collateral is bad, as the likelihood of a margin call goes up, and in turn if that occurs then real (negative) dilution happens. That is why I suggested an "astronomically" large amount of collateral.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 01, 2016, 03:09:23 am
If the system dilutes unlimited BTS for market making, what will happen when a whale or a group of whales manipulates the price of BTS?
* buy the BTAs which are borrowed via dilution, dump BTS to external exchange, settle
* borrow BTA, and sell to the system, pump BTS on external exchanges, buy BTA back from system

The autonomous liquidity operations would not ever buy SmartCoins. It only shorts them, and then places them on the sell side of the market above the price feed. I don't understand what you mean by "sell to the system" since the "system" is never buying any coins.

If this works how I think it works, couldn't someone do this type of an exploit as Bitshares exists today?
Title: Re: Radical ideas for liquidity
Post by: chryspano on February 01, 2016, 03:36:39 am
No, I mean print BTS as in... out of thin air like Bitshares does for worker/delegate dilution.

I have a bad feeling about this...

https://www.youtube.com/watch?v=FQ5YU_spBw0&feature=youtu.be&t=2m28s
Title: Re: Radical ideas for liquidity
Post by: puppies on February 01, 2016, 04:20:20 am
Also coinhoarder your plan is not exactly a new idea.  Perhaps you are not getting as much response as you would like because it has been discussed before.  For example here https://bitsharestalk.org/index.php/topic,20939.0.html  although I am sure there are plenty more.

And yes your plan requires development work to get it to work.  I view that as a negative rather than a positive.
Title: Re: Radical ideas for liquidity
Post by: noisy on February 01, 2016, 01:31:17 pm
Maybe this idea is not radical, but it is another idea, which I think we should consider: https://bitsharestalk.org/index.php/topic,21265.0.html - Simple way to create a liquidity? Let's do it at once - Liquidity Event
Title: Re: Radical ideas for liquidity
Post by: xeroc on February 01, 2016, 01:49:18 pm
[member=16778]CoinHoarder[/member]: I like your idea. Your document is sound and IMHO we should do it. However, it involves quite some coding to have this an integrated automation and we may start trying to convince the committee to provide some liquidity in the short term. Not sure they are willing to do so.

As for the implementations, internally, those autonomous sell orders could be 'virtual' orders such that the DAC only borrows at the fixed ration IF there is a buyer for them ..
That way, we could have a ${MARKETCAP} sell order at the feed price in every single bitasset owned by the DAC/committee and the wall will be reduced in all markets simultaneously if a trade happens in any of them.
You should certainly write this together into a BSIP and have the devs thing about it ..
Title: Re: Radical ideas for liquidity
Post by: Zapply on February 01, 2016, 02:48:38 pm
[member=16778]CoinHoarder[/member] the way that you create the bitasset can be forced Settlement?
Title: Re: Radical ideas for liquidity
Post by: abit on February 01, 2016, 02:55:58 pm
If the system dilutes unlimited BTS for market making, what will happen when a whale or a group of whales manipulates the price of BTS?
* buy the BTAs which are borrowed via dilution, dump BTS to external exchange, settle
* borrow BTA, and sell to the system, pump BTS on external exchanges, buy BTA back from system

The autonomous liquidity operations would not ever buy SmartCoins. It only shorts them, and then places them on the sell side of the market above the price feed. I don't understand what you mean by "sell to the system" since the "system" is never buying any coins.

If this works how I think it works, couldn't someone do this type of an exploit as Bitshares exists today?
I wrote above post from a manipulator's perspective.
Since your "autonomous liquidity operations" (in my word: your bot) place orders into the market, I named it "the system", whatever price you place it, a manipulator can take advantage of your open orders. Once your smart coins are bought by the manipulator, you have open short positions, which can be settled by the manipulator. Your bot would passively accept all the commands sent by the manipulator, thus cause losses.

//Update
Quote
If this works how I think it works, couldn't someone do this type of an exploit as Bitshares exists today?
Since no one provides unlimited liquidity without moving the price. The manipulator has no opponent to worth exploiting.
Title: Re: Radical ideas for liquidity
Post by: abit on February 01, 2016, 03:04:19 pm
[member=16778]CoinHoarder[/member]: I like your idea. Your document is sound and IMHO we should do it. However, it involves quite some coding to have this an integrated automation and we may start trying to convince the committee to provide some liquidity in the short term. Not sure they are willing to do so.

As for the implementations, internally, those autonomous sell orders could be 'virtual' orders such that the DAC only borrows at the fixed ration IF there is a buyer for them ..
That way, we could have a ${MARKETCAP} sell order at the feed price in every single bitasset owned by the DAC/committee and the wall will be reduced in all markets simultaneously if a trade happens in any of them.
You should certainly write this together into a BSIP and have the devs thing about it ..
IMHO there are flaws. Market making is NOT a 100% safe business, it will definitely loss in a trend, so the system itself should never dilute to operate such service.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 01, 2016, 07:18:11 pm
IMHO there are flaws. Market making is NOT a 100% safe business, it will definitely loss in a trend, so the system itself should never dilute to operate such service.

Meh. You are arguing that once there is a sufficient amount of liquidity on the books, that there will be sufficient incentive for people to manipulate the market to their advantage. You are effectively saying that the DEX is broken, as once a sufficient to amount of liquidity exists that it will be manipulated and profited off of from bad actors. What your are saying is a possibility whether my proposal is enacted or not. It is possible as long as there is enough incentive on the orderbooks, which can occur naturally. How do you know this isn't already taking place as is?

I get what you are saying, but while bringing up a good reason the proposal should not be implemented, you are also stating the DEX is broken and unfixable. As soon as there is enough liquidity (incentive) then bad actors will manipulate the market for easy profits. This seems more like a flaw with Smart coins than with the proposal as it could easily happen without it.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 01, 2016, 07:32:49 pm
[member=16778]CoinHoarder[/member] the way that you create the bitasset can be forced Settlement?

Yes, other than the issue abit is bringing up, I think force settlement is the only other issue. The issue with that is the demand for forced settlement will increase, based on a statistical assumption. This will force other shorts, that will certainly have less collateral, to be force settled.

I have not come up with a solution to this, other than possibly not allowing Smartcoins to be force settled (which is another can of worms.) I was poking around last night and I noticed that committee-issued SmartCoins currently cannot be force settled. Is that truly the case, or is it a glitch in the GUI? Someone told me the other week that forced settlements were enabled...
Title: Re: Radical ideas for liquidity
Post by: puppies on February 01, 2016, 08:53:57 pm
[member=16778]CoinHoarder[/member] the way that you create the bitasset can be forced Settlement?

Yes, other than the issue abit is bringing up, I think force settlement is the only other issue. The issue with that is the demand for forced settlement will increase, based on a statistical assumption. This will force other shorts, that will certainly have less collateral, to be force settled.

I have not come up with a solution to this, other than possibly not allowing Smartcoins to be force settled (which is another can of worms.) I was poking around last night and I noticed that committee-issued SmartCoins currently cannot be force settled. Is that truly the case, or is it a glitch in the GUI? Someone told me the other week that forced settlements were enabled...
Settlement is turned on.  I don't have much USD. but it would allow me to settle it.
Title: Re: Radical ideas for liquidity
Post by: bytemaster on February 01, 2016, 09:32:56 pm
Here is my proposal fully explained. The PDF version is much easier to follow and read. It is available here: http://docdro.id/2OcoImM (http://docdro.id/2OcoImM)

This proposal has some really solid concepts and reflects some of the things I have been thinking about. The challenge is preventing the feed from being abused among a few other things.
Title: Re: Radical ideas for liquidity
Post by: abit on February 01, 2016, 10:16:33 pm
IMHO there are flaws. Market making is NOT a 100% safe business, it will definitely loss in a trend, so the system itself should never dilute to operate such service.

Meh. You are arguing that once there is a sufficient amount of liquidity on the books, that there will be sufficient incentive for people to manipulate the market to their advantage. You are effectively saying that the DEX is broken, as once a sufficient to amount of liquidity exists that it will be manipulated and profited off of from bad actors. What your are saying is a possibility whether my proposal is enacted or not. It is possible as long as there is enough incentive on the orderbooks, which can occur naturally. How do you know this isn't already taking place as is?

I get what you are saying, but while bringing up a good reason the proposal should not be implemented, you are also stating the DEX is broken and unfixable. As soon as there is enough liquidity (incentive) then bad actors will manipulate the market for easy profits. This seems more like a flaw with Smart coins than with the proposal as it could easily happen without it.
I've posted the reason above but you didn't quote it.

One of the challenges is: if we have huge liquidity, we shouldn't simply move the feed price when price on external exchange moves, especially when liquidity of external exchanges is less, otherwise it's a good target to manipulate/exploit. But, since the IOU USD backed by exchanges are real USD, on the opposite bitUSD is NOT fully backed especially when huge amount of them are created via dilution, the feed price should move/follow the price on external exchanges, otherwise bitUSD would be considered "not pegged well". Imo BitUSD can be considered as fully backed if there hasn't been unlimited BTS diluted to create them. I'm not saying that smart coins are already broken, but I suspect that it will break if doing this way.

Exactly this:
The challenge is preventing the feed from being abused among a few other things.
Title: Re: Radical ideas for liquidity
Post by: Zapply on February 02, 2016, 12:38:45 am
[member=16778]CoinHoarder[/member] to the core of your design your bitasset is backed the BTS blockchain you just play with number only blockchain give UIA better
Title: Re: Radical ideas for liquidity
Post by: kingscrown on February 02, 2016, 01:50:40 am
What about making liquidty pools just like NBT has?
Title: Re: Radical ideas for liquidity
Post by: Zapply on February 02, 2016, 03:42:06 am
What about making liquidty pools just like NBT has?
How you encourage people put BTS in the liquidty pools?
What is the rules?
Title: Re: Radical ideas for liquidity
Post by: Zapply on February 02, 2016, 03:47:25 am
[member=16778]CoinHoarder[/member] Example USD hyperinflation how your design going to work?
Title: Re: Radical ideas for liquidity
Post by: puppies on February 02, 2016, 03:51:02 am
I think the answer could be paying users to risk their own bts rather than risking the networks bts directly. 

Lets say a third party set up a program to promote liquidity.  You could register an account with them, and then your trades would be watched.  An algorithm would decide how much each of your trades/positions helped liquidity.  You would then get a monthly payout to the top n liquidity supporters paid for from a worker proposal.

The dilution is low and known.  The risk is held by the traders, and they are compensated for that through the worker proposal.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 02, 2016, 04:29:15 am
I am making the following edits to the proposal:
Cons:
2.   Forced settlements need to be disabled, and instead autonomous buy side support needs to be implemented. If this proposal is enacted, the demand for forced settlement will increase (based on a statistical assumption.) This will force other shorts, that will certainly have less collateral, to be force settled. To solve this, I suggest we disable forced settlements, and instead set a buy side peg to provide buy support on the markets. The buy side peg percentage and amount can be the same as the sell side for the sake of convenience, or it can be set separately for the sake of having more control over the liquidity operation.
3.   Market making operations cannot be guaranteed to be profitable. On the off chance that the market making operations are unprofitable, Bitshares has the potential to have endured actual “negative dilution.”

Along with miscellaneous edits having to do with those changes.
Title: Re: Radical ideas for liquidity
Post by: Zapply on February 02, 2016, 04:34:57 am
I think the answer could be paying users to risk their own bts rather than risking the networks bts directly. 

Lets say a third party set up a program to promote liquidity.  You could register an account with them, and then your trades would be watched.  An algorithm would decide how much each of your trades/positions helped liquidity.  You would then get a monthly payout to the top n liquidity supporters paid for from a worker proposal.

The dilution is low and known.  The risk is held by the traders, and they are compensated for that through the worker proposal.
https://bitsharestalk.org/index.php/topic,20368.0.html
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 02, 2016, 04:36:53 am
What about making liquidty pools just like NBT has?

I think the answer could be paying users to risk their own bts rather than risking the networks bts directly. 

Lets say a third party set up a program to promote liquidity.  You could register an account with them, and then your trades would be watched.  An algorithm would decide how much each of your trades/positions helped liquidity.  You would then get a monthly payout to the top n liquidity supporters paid for from a worker proposal.

The dilution is low and known.  The risk is held by the traders, and they are compensated for that through the worker proposal.
[member=41672]kingscrown[/member] [member=9301]puppies[/member]

This is how liquidity pools in Nubits works... users front their own funds for the operations. I think we should seriously consider this avenue as well. However, Nushares still dilutes their shareholders to provide sufficient incentive to liquidity pools. Bitshares would have to endure "real negative dilution" to make that work, but it still may be less risky for BTS shareholders to have users front the funds used in the liquidity operations. They will of course need something in return to front those funds and take that risk, thus "real negative dilution" would have to occur. I am also not sure exactly how many people would be willing to front funds for this. I suppose Nubits hasn't had any trouble with this (finding people willing to take the risks), so maybe it is not a big deal.

Another option is using the liquidity pool to fund my proposal rather than dilution. Over time, assuming the liquidity operations are profitable, the amount of liquidity it is able to provide will grow.

There are a few good ideas floating around regarding liquidity. I think most of the ideas are not true long term solutions, but I have read a handful of solid ideas that would actually have some sort of effect on long term liquidity operations. There are actually so many decent ideas that it is challenging to find which would work best. I am going to continue to improve on my idea in the meantime (because I am biased  :P). After I feel like I cannot improve on my idea any more, then I will proceed look at the other ideas and write a similar paper on each. I see liquidity as being Bitshares number one problem right now, so I will continue to work towards having a liquid DEX.
Title: Re: Radical ideas for liquidity
Post by: Empirical1.2 on February 02, 2016, 04:49:14 am
I am making the following edits to the proposal:
Cons:
2.   Forced settlements need to be disabled, and instead autonomous buy side support needs to be implemented. If this proposal is enacted, the demand for forced settlement will increase (based on a statistical assumption.) This will force other shorts, that will certainly have less collateral, to be force settled. To solve this, I suggest we disable forced settlements, and instead set a buy side peg to provide buy support on the markets. The buy side peg percentage and amount can be the same as the sell side for the sake of convenience, or it can be set separately for the sake of having more control over the liquidity operation.
3.   Market making operations cannot be guaranteed to be profitable. On the off chance that the market making operations are unprofitable, Bitshares has the potential to have endured actual “negative dilution.”

Along with miscellaneous edits having to do with those changes.

 +5% I've been advocating using BTS as a limited internal market maker for a while.

https://bitsharestalk.org/index.php/topic,14349.msg186859.html#msg186859

I believe the market maker would need limits to stop it losing a lot of money in heavily trending markets.
(Put a maximum it can sell/buy per day, or a maximum it can sell at a certain price in a day.)
 
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 02, 2016, 04:52:00 am
What about making liquidty pools just like NBT has?
How you encourage people put BTS in the liquidty pools?
What is the rules?

Nushares dilutes their shareholders to incentive people to risk their own money to provide liquidity. A majority of the risks of the liquidity operation fall upon the individual users, but the Nushares network has to dilute shareholders to pay for people to take those risks which provides their liquidity.

Oppositely, with my design, the Bitshares network takes the risks that liquidity providers do in Nubits/Nushares. However, Bitshares pays nothing for this liquidity (it uses "neutral dilution"), and only pays if the liquidity operations are unprofitable.

I am honestly not sure which design is best. In Nubits/Nushares you have high costs and have little risk, but in my solution you have high risk but no cost.
Title: Re: Radical ideas for liquidity
Post by: puppies on February 02, 2016, 04:58:09 am
[member=16778]CoinHoarder[/member] what do you see that your proposal can do that providing a worker proposal to the committee-account or committee-trade which allowed that account to short bitassets and sell at a certain rate above the peg?
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 02, 2016, 05:13:04 am
I've posted the reason above but you didn't quote it.
I am still confused as to exactly how the vulnerability you are claiming would work. Please elaborate or explain it differently. I have a strong suspicion that the kind of market manipulation you are mentioning can be done even if my proposal was never implemented.

on the opposite bitUSD is NOT fully backed, especially when huge amount of them are created via dilution

Imo BitUSD can be considered as fully backed if there hasn't been unlimited BTS diluted to create them.
I don't agree with these statements. Are diluted BTS tokens not fungible? Are they not able to be used in a way that any other BTS token could be? Developers seemingly have been selling, trading and transferring diluted BTS tokens with no issues. Why is an IPO-created BTS token any more valuable (or different) than a dilution-created BTS (especially a "neutral-dilution-created BTS token")? I posit that if the price is not directly affected by the dilution, then you can't claim that the SmartCoins' aren't fully backed. SmartCoins' inherently have the possibility of becoming "under collateralized" with or without my proposal. Either way, the price will need to drop substantially for that to happen. I don't see the difference as far as SmartCoin collateralized by "diluted BTS" or "natural BTS", but I think you may have a point about market manipulation and I am still thinking it over.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 02, 2016, 05:16:57 am
[member=16778]CoinHoarder[/member] what do you see that your proposal can do that providing a worker proposal to the committee-account or committee-trade which allowed that account to short bitassets and sell at a certain rate above the peg?

Nothing to be honest (other than automation and security of the funds used.) It may be much cheaper to simply do it that way.
Title: Re: Radical ideas for liquidity
Post by: puppies on February 02, 2016, 05:27:00 am
[member=16778]CoinHoarder[/member] what do you see that your proposal can do that providing a worker proposal to the committee-account or committee-trade which allowed that account to short bitassets and sell at a certain rate above the peg?

Nothing to be honest (other than automation and security of the funds used.) It may be much cheaper to simply do it that way.

My only point is that if there is consensus that this is what we should do, we can do it right now.  There is.no reason to wait six months or so for it to be developed.

On a side note have you thought about what would happen if rather than locking up 6x or whatever high amount you locked up a low amount say 2x.  That way any increase in settling would be taken up by the same assets created.  It would also act as an exit strategy for the network.  I haven't done nearly enough thinking about all the possible downsides.  Just thought I would bring it up.
Title: Re: Radical ideas for liquidity
Post by: abit on February 02, 2016, 07:35:30 am
I think the answer could be paying users to risk their own bts rather than risking the networks bts directly. 

Lets say a third party set up a program to promote liquidity.  You could register an account with them, and then your trades would be watched.  An algorithm would decide how much each of your trades/positions helped liquidity.  You would then get a monthly payout to the top n liquidity supporters paid for from a worker proposal.

The dilution is low and known.  The risk is held by the traders, and they are compensated for that through the worker proposal.
"compensate from worker proposal" should not cover all the losses and should not be high, otherwise the system may be seen as "printing unlimited money" and let someone game the system.

IMO the answer is MAKER, maybe.
Title: Re: Radical ideas for liquidity
Post by: xeroc on February 02, 2016, 07:39:31 am
Two points Id like to note.

- Settlement can be discouraged by asking for a percentage fee (1-2%) (this will move the peg AROUND parity. Flat fee for settlement can also be increase which has some negative effects on pred. markets

- the volume of the dex can certainly be addes as source for the price feed. Its about time now
Title: Re: Radical ideas for liquidity
Post by: puppies on February 02, 2016, 08:10:37 am
I think the answer could be paying users to risk their own bts rather than risking the networks bts directly. 

Lets say a third party set up a program to promote liquidity.  You could register an account with them, and then your trades would be watched.  An algorithm would decide how much each of your trades/positions helped liquidity.  You would then get a monthly payout to the top n liquidity supporters paid for from a worker proposal.

The dilution is low and known.  The risk is held by the traders, and they are compensated for that through the worker proposal.
"compensate from worker proposal" should not cover all the losses and should not be high, otherwise the system may be seen as "printing unlimited money" and let someone game the system.

IMO the answer is MAKER, maybe.

I agree.  We should not subsidize the losses of bad traders.  The idea is to get more people trading closer to the peg.  A bad trader will lose more than they get from this system and give up. 
Title: Re: Radical ideas for liquidity
Post by: Empirical1.2 on February 02, 2016, 01:55:55 pm
- Settlement can be discouraged by asking for a percentage fee (1-2%) (this will move the peg AROUND parity. Flat fee for settlement can also be increase which has some negative effects on pred. markets

 +5%

-The idea that BitUSD was always worth a dollar was good but in practice I think the market would prefer BitAssets to trade around the peg rather than above the peg.

- I think forced settlement at 100% even with the delay can perhaps be manipulated by altering BTS price on external markets.

JohnnyBitcoin previously exploited transwiser via forced settlement & perhaps still has a forced settlement edge given how keen he is on maximising  forced settlement, max daily settlement & was also keen to buy $10k BitUSD recently just above feed? https://bitsharestalk.org/index.php/topic,21096.msg273365.html#msg273365

- I think an actual 1-2% fee could be good as it could then be used to incentivize shorts/other who are the ones that seem the most reluctant to come close to the peg atm.






Title: Re: Radical ideas for liquidity
Post by: JonnyB on February 02, 2016, 02:23:42 pm
- Settlement can be discouraged by asking for a percentage fee (1-2%) (this will move the peg AROUND parity. Flat fee for settlement can also be increase which has some negative effects on pred. markets

 +5%

-The idea that BitUSD was always worth a dollar was good but in practice I think the market would prefer BitAssets to trade around the peg rather than above the peg.

- I think forced settlement at 100% even with the delay can perhaps be manipulated by altering BTS price on external markets.

JohnnyBitcoin previously exploited transwiser via forced settlement & perhaps still has a forced settlement edge given how keen he is on maximising  forced settlement, max daily settlement & was also keen to buy $10k BitUSD recently just above feed? https://bitsharestalk.org/index.php/topic,21096.msg273365.html#msg273365

- I think an actual 1-2% fee could be good as it could then be used to incentivize shorts/other who are the ones that seem the most reluctant to come close to the peg atm.

I think you and a few others have a real misunderstanding of force settlement. Force settling is just a guarantee of liquidity at peg. If people are stupid enough to sell smartcoins for less than what they can be settled for then of course I will buy them and settle at profit. Watch my video at thedex.org for a more detailed explanation.
Title: Re: Radical ideas for liquidity
Post by: Empirical1.2 on February 02, 2016, 02:25:57 pm
- Settlement can be discouraged by asking for a percentage fee (1-2%) (this will move the peg AROUND parity. Flat fee for settlement can also be increase which has some negative effects on pred. markets

 +5%

-The idea that BitUSD was always worth a dollar was good but in practice I think the market would prefer BitAssets to trade around the peg rather than above the peg.

- I think forced settlement at 100% even with the delay can perhaps be manipulated by altering BTS price on external markets.

JohnnyBitcoin previously exploited transwiser via forced settlement & perhaps still has a forced settlement edge given how keen he is on maximising  forced settlement, max daily settlement & was also keen to buy $10k BitUSD recently just above feed? https://bitsharestalk.org/index.php/topic,21096.msg273365.html#msg273365

- I think an actual 1-2% fee could be good as it could then be used to incentivize shorts/other who are the ones that seem the most reluctant to come close to the peg atm.

I think you and a few others have a real misunderstanding of force settlement. Force settling is just a guarantee of liquidity at peg. If people are stupid enough to sell smartcoins for less than what they can be settled for then of course I will buy them and settle at profit. Watch my video at thedex.org for a more detailed explanation.

Weren't you offering to buy the $10k BitUSD in my example for more that it could be force settled at the time?
Title: Re: Radical ideas for liquidity
Post by: chryspano on February 02, 2016, 03:14:54 pm
I posted this in another thread but I will post here too, why not use some of the worker funds to pay "interest" to people that would pool their funds(bts and bitUSD) to a bot/pool(whatever) to maintain the peg?

Total witness and worker budget seems to be 130M bts per year (6,5% inflation at 2B cap bts) with 10M of those funds we can pay an anual interest rate of 2% to a Pool value of 500.000.000 bts. I don't know if this rate is too much or too low but we need to take in to account that it is more probable to have looses than profits from the trading bot if we aim for a tight peg.
Quote
(http://i.imgur.com/zYa14dp.jpg)

https://discuss.nubits.com/t/discussion-liquidity-operations-a-paradigm-shift/3379

Before you scream about inflation, keep in mind that right now we have 12,5% inflation from the merger alone plus a max posible of 6,5% from workers and witness budget, trying to save 0,5%(or whatever) would not be wise imo IF those funds could help maintain the peg.

I don't know if this could work at all, or if its too hard to be implemented, just my thoughts.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 02, 2016, 03:44:36 pm
I posted this in another thread but I will post here too, why not use some of the worker funds to pay "interest" to people that would pool their funds(bts and bitUSD) to a bot/pool(whatever) to maintain the peg?

Total witness and worker budget seems to be 130M bts per year (6,5% inflation at 2B cap bts) with 10M of those funds we can pay an anual interest rate of 2% to a Pool value of 500.000.000 bts. I don't know if this rate is too much or too low but we need to take in to account that it is more probable to have looses than profits from the trading bot if we aim for a tight peg.
Quote
(http://i.imgur.com/zYa14dp.jpg)

https://discuss.nubits.com/t/discussion-liquidity-operations-a-paradigm-shift/3379

Before you scream about inflation, keep in mind that right now we have 12,5% inflation from the merger alone plus a max posible of 6,5% from workers and witness budget, trying to save 0,5%(or whatever) would not be wise imo IF those funds could help maintain the peg.

I don't know if this could work at all, or if its too hard to be implemented, just my thoughts.

FYI- The last time I looked the current going rate liquidity providers get for providing liquidity for Nubits is 8%

Liquidity as Nubuts does it is very complicated and takes many people to enforce the peg. If we were to go this route, then I would suggest making everything happen autonomously. Go over to their forums to the liquidity subforum to find out how big of a clusterfuck liquidity for Nubuts is. We have an advantage here in that we have a DEX on our chain and thus can automate the liquidity operations. People would just need to lock up funds they want to use for liquidity operations, then the committee set the margin (or how tight the peg is).
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 02, 2016, 03:52:05 pm
Also, as stated up thread the difference in between my model and the Nubits model...

The Nubits model results in a certain fixed amount of negative dilution paid directly to liquidity providers, but the risk of liquidity operations are put on the users providing the funds for the liquidity operations. Dilution is a certainty to provide liquidity operations.

My model could possibly have smaller (or no) dilution depending on how successful the market making operations are. The funds are provided autonomously by the Bitshares chain, so all shareholders share the risks of market making equally. Only if the operations are unsussesful will Bitshares suffers real dilution.
Title: Re: Radical ideas for liquidity
Post by: Empirical1.2 on February 02, 2016, 04:15:13 pm
keep in mind that right now we have 12,5% inflation from the merger alone plus a max posible of 6,5% from workers and witness budget, trying to save 0,5%(or whatever) would not be wise imo IF those funds could help maintain the peg.

 +5%

Imagine if some of the value the DAC is leaking on the merger was directed to subsidising BitAsset liquidity for 20 months instead

I think BTS would have a MUCH higher value today if we'd focused on BitAsset liquidity for the last year instead of the delegate system and nice to have, but not core Smartcoin related development.
Title: Re: Radical ideas for liquidity
Post by: xeroc on February 02, 2016, 04:16:16 pm
[member=16778]CoinHoarder[/member]
So you are proposing to have a deposit account that people can send their BTS to, that will be used to provide liquidity autonomously with a collateral ratio defined by the committee without even "diluting" shareholders more (except maybe to encourage to provide liquidity by a offering a 'yield') .. Is that about correct?
Title: Re: Radical ideas for liquidity
Post by: JonnyB on February 02, 2016, 04:18:23 pm
- Settlement can be discouraged by asking for a percentage fee (1-2%) (this will move the peg AROUND parity. Flat fee for settlement can also be increase which has some negative effects on pred. markets

 +5%

-The idea that BitUSD was always worth a dollar was good but in practice I think the market would prefer BitAssets to trade around the peg rather than above the peg.

- I think forced settlement at 100% even with the delay can perhaps be manipulated by altering BTS price on external markets.

JohnnyBitcoin previously exploited transwiser via forced settlement & perhaps still has a forced settlement edge given how keen he is on maximising  forced settlement, max daily settlement & was also keen to buy $10k BitUSD recently just above feed? https://bitsharestalk.org/index.php/topic,21096.msg273365.html#msg273365

- I think an actual 1-2% fee could be good as it could then be used to incentivize shorts/other who are the ones that seem the most reluctant to come close to the peg atm.

I think you and a few others have a real misunderstanding of force settlement. Force settling is just a guarantee of liquidity at peg. If people are stupid enough to sell smartcoins for less than what they can be settled for then of course I will buy them and settle at profit. Watch my video at thedex.org for a more detailed explanation.

Weren't you offering to buy the $10k BitUSD in my example for more that it could be force settled at the time?

yes. i wanted to buy some cheap.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 02, 2016, 04:27:30 pm
[member=16778]CoinHoarder[/member]
So you are proposing to have a deposit account that people can send their BTS to, that will be used to provide liquidity autonomously with a collateral ratio defined by the committee without even "diluting" shareholders more (except maybe to encourage to provide liquidity by a offering a 'yield') .. Is that about correct?

That is certainly one way to go about it. However, dilution is certain and necessary, because you have to incentivize people to take the risks of market making. The yield or incentive percentage can be set by the comittee, so it could be lowered as the exchange gains more "natural liquidity".

I would consider that the "Nubits version" of my proposal, and is not how I originally described it. Both solutions have different pros/cons. I would support either versions of the proposal because I think liquidity is a big issue.

I guess I don't have an opinion either way, but if more people would be able to get behind the Nubits version of the proposal, then I would be all for it.
Title: Re: Radical ideas for liquidity
Post by: gamey on February 02, 2016, 04:53:32 pm

Curiously can anyone give references to these sort of things working in the past?  I understand BitShares is a new product in many many ways so it is hard to find an example that fits very well, but I would think there should be something out there.

I wonder if the better solution could be more within education. I don't think education is a great idea, but I question whether paying liquidity providers will be enough to jumpstart the system ... and if it isn't (which seems likely) you have now spent your war chest.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 02, 2016, 05:00:36 pm
It has worked for Nubits for over a year.. and they have had much more volume than Bitshares' DEX has had.
Title: Re: Radical ideas for liquidity
Post by: chryspano on February 02, 2016, 05:14:34 pm

Curiously can anyone give references to these sort of things working in the past?  I understand BitShares is a new product in many many ways so it is hard to find an example that fits very well, but I would think there should be something out there.

I wonder if the better solution could be more within education. I don't think education is a great idea, but I question whether paying liquidity providers will be enough to jumpstart the system ... and if it isn't (which seems likely) you have now spent your war chest.

I only know about Nubits and they "print" more nubits out of thin air(this is very bad imo) in order to pay the liquidity providers with the 8% Coihoarder mentioned above, it seems to work until now but there is another problem with them, every time new suckers buy nubits, a large percentage of the suckers money are considered "Profits" and are used to pump their nushares  ponzishares. IF there is going to be a huge supply of nubits that threatens the peg, then and only then they will inflate their ponzishares supply (because every week they use lots of the sucker's BTC's as "profits"), despite all that it seems that they have a very good peg so far. If it works with them why not for us? 

Worst case scenario we will have to abord if we see that it does't  work, I think we will loose more time and energy than bts 

Disclaimer
I'm completly biased against nubits.
Title: Re: Radical ideas for liquidity
Post by: Empirical1.2 on February 02, 2016, 05:30:53 pm

Curiously can anyone give references to these sort of things working in the past?  I understand BitShares is a new product in many many ways so it is hard to find an example that fits very well, but I would think there should be something out there.

I wonder if the better solution could be more within education. I don't think education is a great idea, but I question whether paying liquidity providers will be enough to jumpstart the system ... and if it isn't (which seems likely) you have now spent your war chest.

Nubits despite being far more risky than BitUSD, and will probably fail, is much more popular through the use of liquidity providers.
They probably average >$1 million a month in volume and have much bigger market share.

https://uphold.com/ Uphold started after BTSX and offer centralized BitAssets which are much less appealing to Bitcoin users, however they offer a tight peg by being the liquidity providers themselves. As a result they are "supposedly" the fastest growing money platform in the world.

Part of the problem is that in these market conditions & with the added burden of forced settlement, shorts don't want to come close to the peg resulting in a very high premium, so long term this has to be addressed too, possibly by incentivizing shorts in BTS neutral/bear markets imo.
Title: Re: Radical ideas for liquidity
Post by: Shentist on February 02, 2016, 05:37:53 pm

Curiously can anyone give references to these sort of things working in the past?  I understand BitShares is a new product in many many ways so it is hard to find an example that fits very well, but I would think there should be something out there.

I wonder if the better solution could be more within education. I don't think education is a great idea, but I question whether paying liquidity providers will be enough to jumpstart the system ... and if it isn't (which seems likely) you have now spent your war chest.

Nubits despite being far more risky than BitUSD, and will probably fail, is much more popular through the use of liquidity providers.
They probably average >$1 million a month in volume and have much bigger market share.

https://uphold.com/ Uphold started after BTSX and offer centralized BitAssets which are much less appealing to Bitcoin users, however they offer a tight peg by being the liquidity providers themselves. As a result they are "supposedly" the fastest growing money platform in the world.

Part of the problem is that in these market conditions & with the added burden of forced settlement, shorts don't want to come close to the peg resulting in a very high premium, so long term this has to be addressed too, possibly by incentivizing shorts in BTS neutral/bear markets imo.

you are saying "Nubits have a much bigger market share" on which data is this assumtion based? To me it looks, the tradevolume is only the market maker who recieved a lot of funds in the beginning for free. thats all i see.
Title: Re: Radical ideas for liquidity
Post by: Empirical1.2 on February 02, 2016, 05:40:02 pm

Curiously can anyone give references to these sort of things working in the past?  I understand BitShares is a new product in many many ways so it is hard to find an example that fits very well, but I would think there should be something out there.

I wonder if the better solution could be more within education. I don't think education is a great idea, but I question whether paying liquidity providers will be enough to jumpstart the system ... and if it isn't (which seems likely) you have now spent your war chest.

Nubits despite being far more risky than BitUSD, and will probably fail, is much more popular through the use of liquidity providers.
They probably average >$1 million a month in volume and have much bigger market share.

https://uphold.com/ Uphold started after BTSX and offer centralized BitAssets which are much less appealing to Bitcoin users, however they offer a tight peg by being the liquidity providers themselves. As a result they are "supposedly" the fastest growing money platform in the world.

Part of the problem is that in these market conditions & with the added burden of forced settlement, shorts don't want to come close to the peg resulting in a very high premium, so long term this has to be addressed too, possibly by incentivizing shorts in BTS neutral/bear markets imo.

you are saying "Nubits have a much bigger market share" on which data is this assumtion based? To me it looks, the tradevolume is only the market maker who recieved a lot of funds in the beginning for free. thats all i see.

Last time I checked the amount of Nubits in circulation is much higher than BitUSD...

Uphold: $2.06 Million
Tether: $1.45 Million
Nubits: $0.76 Million
BituSD: $0.1  Million

So going by that I would say we only have 2.5% market share.  Their volume is also much, much higher than BitUSD.

Also even though they're created out of thin air, they're not given for free, otherwise they wouldn't have been able to distribute $400 000 in dividends in 2015 from the proceeds and fund the exchange they are currently building.

Quote
$409,811 have been distributed as dividends2 over the last year, most of which was as BlockShares. Given the current NuShare market cap of $1,628,335, that is a stunning 25.17% dividend yield.

https://discuss.nubits.com/t/how-many-dividend-distributions-has-nushares-had-will-there-be-any-more/2739/3
Title: Re: Radical ideas for liquidity
Post by: abit on February 02, 2016, 05:46:45 pm

Curiously can anyone give references to these sort of things working in the past?  I understand BitShares is a new product in many many ways so it is hard to find an example that fits very well, but I would think there should be something out there.

I wonder if the better solution could be more within education. I don't think education is a great idea, but I question whether paying liquidity providers will be enough to jumpstart the system ... and if it isn't (which seems likely) you have now spent your war chest.

I only know about Nubits and they "print" more nubits out of thin air(this is very bad imo) in order to pay the liquidity providers with the 8% Coihoarder mentioned above, it seems to work until now but there is another problem with them, every time new suckers buy nubits, a large percentage of the suckers money are considered "Profits" and are used to pump their nushares  ponzishares. IF there is going to be a huge supply of nubits that threatens the peg, then and only then they will inflate their ponzishares supply (because every week they use lots of the sucker's BTC's as "profits"), despite all that it seems that they have a very good peg so far. If it works with them why not for us? 
Imo those "Profits" should be "Revenues". What will happen if those bought nubits be sold back?
Quote

Worst case scenario we will have to abord if we see that it does't  work, I think we will loose more time and energy than bts 

Disclaimer
I'm completly biased against nubits.
Title: Re: Radical ideas for liquidity
Post by: Shentist on February 02, 2016, 05:47:26 pm
[member=32211]Empirical1.2[/member]

thats true, but as i stated, are you aware that most of this nubits are from the marketmaker and not from demand, so i think it is difficult to look into the trading volumen (because the market maker are exchanges and shuffling the nubits for free). i think a much better way would be to know how the nubits are allocated. On the nuexplorer you can find the 100 richest addresses https://blockexplorer.nu/topNBTaddresses/1

and i am confused, their should be 6-7 million Nubits bur coinmarketcap states 700.000 so why is the difference so huge?
Title: Re: Radical ideas for liquidity
Post by: Empirical1.2 on February 02, 2016, 05:52:01 pm
[member=32211]Empirical1.2[/member]

thats true, but as i stated, are you aware that most of this nubits are from the marketmaker and not from demand, so i think it is difficult to look into the trading volumen (because the market maker are exchanges and shuffling the nubits for free). i think a much better way would be to know how the nubits are allocated. On the nuexplorer you can find the 100 richest addresses https://blockexplorer.nu/topNBTaddresses/1

and i am confused, their should be 6-7 million Nubits bur coinmarketcap states 700.000 so why is the difference so huge?

Initially they had some crazy volume on bter but I don't think they are shuffling the Nubits for free anymore unless they have a deal with the exchanges to not pay the trading fee. Also demand for Nubits explodes when BTC is falling, which is expected so I don't think their volume is fake.

I think they sell Nubits to market makers when there is increased market demand possibly at a discount depending on how they subsidize them but I don't know & I also don't know why there is such a huge discrepancy.


Curiously can anyone give references to these sort of things working in the past?  I understand BitShares is a new product in many many ways so it is hard to find an example that fits very well, but I would think there should be something out there.

I wonder if the better solution could be more within education. I don't think education is a great idea, but I question whether paying liquidity providers will be enough to jumpstart the system ... and if it isn't (which seems likely) you have now spent your war chest.

I only know about Nubits and they "print" more nubits out of thin air(this is very bad imo) in order to pay the liquidity providers with the 8% Coihoarder mentioned above, it seems to work until now but there is another problem with them, every time new suckers buy nubits, a large percentage of the suckers money are considered "Profits" and are used to pump their nushares  ponzishares. IF there is going to be a huge supply of nubits that threatens the peg, then and only then they will inflate their ponzishares supply (because every week they use lots of the sucker's BTC's as "profits"), despite all that it seems that they have a very good peg so far. If it works with them why not for us? 
Imo those "Profits" should be "Revenues". What will happen if those bought nubits be sold back?

What's interesting is that they have a parking rate system that is supposed to pay people to park their Nubits in situations where lots of people want to sell Nubits but despite their super fractional reserve I don't think they've really had to use it yet. So it makes you think they could carry on with this system for quite a while..
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 02, 2016, 06:58:07 pm
To me it looks, the tradevolume is only the market maker who recieved a lot of funds in the beginning for free. thats all i see.

Most of that was burned and does not exist anymore. The info regarding that is on Nubits' forums.
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 02, 2016, 07:05:00 pm
I only know about Nubits and they "print" more nubits out of thin air(this is very bad imo) in order to pay the liquidity providers with the 8% Coihoarder mentioned above, it seems to work until now but there is another problem with them, every time new suckers buy nubits, a large percentage of the suckers money are considered "Profits" and are used to pump their nushares  ponzishares. IF there is going to be a huge supply of nubits that threatens the peg, then and only then they will inflate their ponzishares supply (because every week they use lots of the sucker's BTC's as "profits"), despite all that it seems that they have a very good peg so far. If it works with them why not for us? 

Worst case scenario we will have to abord if we see that it does't  work, I think we will loose more time and energy than bts 

Disclaimer
I'm completly biased against nubits.

You are being hypocritical. Bitshares also prints BTS out of thin air for worker proposals and delegate dilution...

I also do not agree that Nubits is operating on a fractional reserve. Nubits are backed by the value of Nushares, as that is what is diluted to pay for liquidity and a tight peg. The Nushares market capitalization is above 2.6 million and the Nubits market capitalization is approx 750k. As long as Nushares has sufficient value to provide incentive to liquidity providers, and there is reason to believe there will be demand for Nubits at some point in the future, then I think it is unlikely it will ever collapse.
Title: Re: Radical ideas for liquidity
Post by: Empirical1.2 on February 02, 2016, 08:04:52 pm
I only know about Nubits and they "print" more nubits out of thin air(this is very bad imo) in order to pay the liquidity providers with the 8% Coihoarder mentioned above, it seems to work until now but there is another problem with them, every time new suckers buy nubits, a large percentage of the suckers money are considered "Profits" and are used to pump their nushares  ponzishares. IF there is going to be a huge supply of nubits that threatens the peg, then and only then they will inflate their ponzishares supply (because every week they use lots of the sucker's BTC's as "profits"), despite all that it seems that they have a very good peg so far. If it works with them why not for us? 

Worst case scenario we will have to abord if we see that it does't  work, I think we will loose more time and energy than bts 

Disclaimer
I'm completly biased against nubits.

You are being hypocritical. Bitshares also prints BTS out of thin air for worker proposals and delegate dilution...

I also do not agree that Nubits is operating on a fractional reserve. Nubits are backed by the value of Nushares, as that is what is diluted to pay for liquidity and a tight peg. The Nushares market capitalization is above 2.6 million and the Nubits market capitalization is approx 750k. As long as Nushares has sufficient value to provide incentive to liquidity providers, and there is reason to believe there will be demand for Nubits at some point in the future, then I think it is unlikely it will ever collapse.


Quote
Nubits are backed by the value of Nushares,

Yes they say... https://docs.nubits.com/history/


Quote
If the NuShare market cap is 8 million NBT and there are 1 million NBT in circulation, the asset to liability ratio is 8, not counting any reserves that exist. This is a highly solvent state that doesn’t resemble anything like fractional reserve.

Unfortunately for them there's a grand total of 15 BTC of buy support for NuShares across all exchanges? Yay, $750 000 of Nubits are backed by $6000 of NuShares buy support.

https://poloniex.com/exchange#btc_nsr
https://bter.com/trade/nsr_btc

Which is literally nothing and that tiny buy support would evaporate if NuShares was having to dump to support NuBits.

I think they have a few levels of reserves and I think they can still offer interest on parked Nubits before they get to that stage.

Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 02, 2016, 08:26:00 pm
Unfortunately for them there's a grand total of 15 BTC of buy support for NuShares across all exchanges? Yay, $750 000 of Nubits are backed by $6000 of NuShares buy support.

https://poloniex.com/exchange#btc_nsr
https://bter.com/trade/nsr_btc

Which is literally nothing and that tiny buy support would evaporate if NuShares was having to dump to support NuBits.

I think they have a few levels of reserves and I think they can still offer interest on parked Nubits before they get to that stage.

I don't think market capitalization or value should be determined primarily by the amount of buy orders, but more as to the current price. There has been $6500 in volume on the NSR markets today, and there are a lot of holders in the NSR community. I am biased though.. I have been investing in NSR.

The post up-thread explaining all of the competitors to bitUSD, including their market capitalization and volume, sum up my thoughts on the matter perfectly. Bitshares should be neck and neck with its competitors considering it was the first to market. Bitshares was my original pick to be the market leader, but the lack of success has lead me to having to diversify my holdings for this crypto market (stable asset and DEX). It is time to take the bull by the horns and swallow our pride, as to the hatred for Nubits and their solution, and get this problem solved.

People around here seem to hate Nubits because they print money, and then look the other way when it comes to BTS printing money (dilution).
Title: Re: Radical ideas for liquidity
Post by: gamey on February 02, 2016, 11:27:23 pm
People around here seem to hate Nubits because they print money, and then look the other way when it comes to BTS printing money (dilution).

Yes, but I'd guess 99%+ of all coins dilute in the same manner BitShares does.  BitShares does not dilute however to maintain their peg. There really is a large distinction although it may be meaningless to many users.
Title: Re: Radical ideas for liquidity
Post by: abit on February 03, 2016, 12:54:35 am
Also demand for Nubits explodes when BTC is falling, which is expected so I don't think their volume is fake.
In this way they'll likely loss money..
When BTC is falling, people want to sell BTC for NB, so Nu's bots will have to buy (BTC) high.
When BTC is raising, people want to sell NB for BTC, so Nu's bots will have to sell (BTC) low.
I guess there is something missing?
Title: Re: Radical ideas for liquidity
Post by: Empirical1.2 on February 03, 2016, 01:15:00 am
Also demand for Nubits explodes when BTC is falling, which is expected so I don't think their volume is fake.
In this way they'll likely loss money..
When BTC is falling, people want to sell BTC for NB, so Nu's bots will have to buy (BTC) high.
When BTC is raising, people want to sell NB for BTC, so Nu's bots will have to sell (BTC) low.
I guess there is something missing?

Yes. It's possible they raise the premium at these times but I think they still lose money during these extremes.
I think they subsidize the liquidity providers.

I think it works because they are constantly selling NBT and receiving BTC but not all the NBT they sell are coming back.
People might lose/forget or keep their NBT for a long time.

I think they are operating on a extreme fractional reserve and if a lot of people all wanted to sell their NBT at the same time they would have a problem because they've used the proceeds of previous sales to pay dividends, fund development, marketing and pay liquidity providers. (Their argument is that they have some liquidity tiers, they can use parking and finally dilute NuShares holders if necessary but NuShares is so illiquid, I don't think this is realistic.)

However they've survived so far without even needing to use parking rates I think, so maybe they can keep it going for quite a while.
Title: Re: Radical ideas for liquidity
Post by: chryspano on February 03, 2016, 04:25:00 am
You are being hypocritical. Bitshares also prints BTS out of thin air for worker proposals and delegate dilution...

You are comparing aplles to oranges. Nubits have no max cap in their printing presses and they also make the claim that their "token" will not devalue.

I also do not agree that Nubits is operating on a fractional reserve. Nubits are backed by the value of Nushares, as that is what is diluted to pay for liquidity and a tight peg. The Nushares market capitalization is above 2.6 million and the Nubits market capitalization is approx 750k. As long as Nushares has sufficient value to provide incentive to liquidity providers, and there is reason to believe there will be demand for Nubits at some point in the future, then I think it is unlikely it will ever collapse.

What is really the "value" of something that has only 15 btc 8,65 btc 9,39 btc buy support and half of its trading volume are pumping money from their ponzi "revenue" scheme?
 
The last 3 months they had a total volume of 540 btc in BTER and 378 btc in Poloniex for a total of 918 btc, but 458 btc of that volume is their ponzi "revenue" money used to pump the prize https://discuss.nubits.com/t/nsr-buyback-19-week-of-february-1-2016/3462

Add to the picture the huge spread and the fact that only 0.25% of the nushares are in the exchanges for sale and you get the whole picture.

There is no demand for NuShares, there is only demand for a peged crypto, good luck to you if you try to defend the peg by giving away.... Nushares
Title: Re: Radical ideas for liquidity
Post by: CoinHoarder on February 03, 2016, 05:13:11 am
You are being hypocritical. Bitshares also prints BTS out of thin air for worker proposals and delegate dilution...

You are comparing aplles to oranges. Nubits have no max cap in their printing presses and they also make the claim that their "token" will not devalue.
Hard forks happen all the time around here. You are kidding yourself if you think Bitshares has a hard cap on its printing press. The rules in Bitshares are final until they are changed. Bitshares... its marketing, and its users, claim SmartCoins are safe investments without hardly mentioning the risks involved. "Safer" than Nubits while sweeping the vulnerabilities and flaws under the rug left and right. Smartcoins are "backed" by a cryptocurrency that was printed out of thin air.... HELLO... A cryptocurrency that has lost value for almost 2 years straight with no signs of giving up. There is no way SmartCoins will ever become valueless, right?

You guys will keep diluting for useless features, because there are a bunch of idiots in control, and refuse to dilute for the things that are actually important. Important things like.... gasp.... liquidity on a cryptocurrency exchange. You guys wouldn't dilute for privacy, yet you are about to dilute to change flat fees to percentage based fees. As if that is going to be Bitshares' savior from this two year downtrend. No, it is the referral systems fault... we obviously need to tweak it. All of you "solutions" involving liquidity that don't involve dilution will not work, yet you guys are too thick to realize it. At the end of the day I  have little at stake here and have little to zero faith in the people that seem to be in control around here. So, I will peacefully bow out of here, sell my stake, and move on to another project. I suggest you guys get off this sinking ship while you still can. Sayonara
Title: Re: Radical ideas for liquidity
Post by: tonyk on February 03, 2016, 05:48:36 am
You are being hypocritical. Bitshares also prints BTS out of thin air for worker proposals and delegate dilution...

You are comparing aplles to oranges. Nubits have no max cap in their printing presses and they also make the claim that their "token" will not devalue.
Hard forks happen all the time around here. You are kidding yourself if you think Bitshares has a hard cap on its printing press. The rules in Bitshares are final until they are changed. Bitshares... its marketing, and its users, claim SmartCoins are safe investments without hardly mentioning the risks involved. "Safer" than Nubits while sweeping the vulnerabilities and flaws under the rug left and right. Smartcoins are "backed" by a cryptocurrency that was printed out of thin air.... HELLO... A cryptocurrency that has lost value for almost 2 years straight with no signs of giving up. There is no way SmartCoins will ever become valueless, right?

You guys will keep diluting for useless features, because there are a bunch of idiots in control, and refuse to dilute for the things that are actually important. Important things like.... gasp.... liquidity on a cryptocurrency exchange. You guys wouldn't dilute for privacy, yet you are about to dilute to change flat fees to percentage based fees. As if that is going to be Bitshares' savior from this two year downtrend. No, it is the referral systems fault... we obviously need to tweak it. All of you "solutions" involving liquidity that don't involve dilution will not work, yet you guys are too thick to realize it. At the end of the day I  have little at stake here and have little to zero faith in the people that seem to be in control around here. So, I will peacefully bow out of here, sell my stake, and move on to another project. I suggest you guys get off this sinking ship while you still can. Sayonara

 +5%
....yes per signature and
 per this in particular "All of you "solutions" involving liquidity that don't involve dilution will not work"
Title: Re: Radical ideas for liquidity
Post by: gamey on February 03, 2016, 06:23:04 am
You are being hypocritical. Bitshares also prints BTS out of thin air for worker proposals and delegate dilution...

You are comparing aplles to oranges. Nubits have no max cap in their printing presses and they also make the claim that their "token" will not devalue.
Hard forks happen all the time around here. You are kidding yourself if you think Bitshares has a hard cap on its printing press. The rules in Bitshares are final until they are changed. Bitshares... its marketing, and its users, claim SmartCoins are safe investments without hardly mentioning the risks involved. "Safer" than Nubits while sweeping the vulnerabilities and flaws under the rug left and right. Smartcoins are "backed" by a cryptocurrency that was printed out of thin air.... HELLO... A cryptocurrency that has lost value for almost 2 years straight with no signs of giving up. There is no way SmartCoins will ever become valueless, right?

You guys will keep diluting for useless features, because there are a bunch of idiots in control, and refuse to dilute for the things that are actually important. Important things like.... gasp.... liquidity on a cryptocurrency exchange. You guys wouldn't dilute for privacy, yet you are about to dilute to change flat fees to percentage based fees. As if that is going to be Bitshares' savior from this two year downtrend. No, it is the referral systems fault... we obviously need to tweak it. All of you "solutions" involving liquidity that don't involve dilution will not work, yet you guys are too thick to realize it. At the end of the day I  have little at stake here and have little to zero faith in the people that seem to be in control around here. So, I will peacefully bow out of here, sell my stake, and move on to another project. I suggest you guys get off this sinking ship while you still can. Sayonara

It is a bit absurd you are so hurt because a couple of guys disagree with you that dilution and the backing of smart assets have tiers in what is preferred.  BitShares has a hugely preferable method to what NuBits/NuShares is ... if only they can get liquidity. Which is the point of this thread.

edit - Thinking about this a bit further, there is a difference between diluting directly for the market's needs and diluting to pay other parties some sort of bonus system to incentivize them to be market makers. I always thought NuBits/Nushares had the first, but I suppose the 2nd is acceptable to me personally.

 Nubits/Nushares always seemed a bit odd to me .. They get away from transparency but use crypto as a ledger. I have used Nubits before, but I never kept my USD in there long. Mainly just trying to avoid big BTC drops. It worked well and was available on the exchanges. Last time I checked to get out of BTC, it had a 10%ish spread when BTC was swinging down. I passed...