BitShares Forum
Main => General Discussion => Topic started by: bitcrab on May 01, 2016, 03:05:12 am
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China community has some discussion on the parameter of bitCNY. most of the community member agree that some modification of the bitCNY parameters can make this smartcoin work better, I had issued a poll https://bitsharestalk.org/index.php/topic,22335.0.html (https://bitsharestalk.org/index.php/topic,22335.0.html) to get opinions on such a change:
"force_settlement_offset_percent": from 0 to 1% //to encourage the shorters
"maximum_force_settlement_volume": from 2% to 0.5% //as this parameter is per hour, not per day, so 2% is still too high, 0.5% is more reasonable
up to now the number of supporters:objectors is 8:1
I propose such a change based on my observation on the behavior of bitCNY and TCNY, obviously bitCNY is more acceptable than TCNY, however one interesting the 1% settlement offset actually encourage users to short TCNY, now I have about 50k TCNY in my hand without any debt - because there are some other users to short and made me have no chance to short.
for one smartcoin it is necessary to encourage the shorters to provide more supply, and it seems always not easy for a privatized smartcoin to get enough trust like public smartcoin, previously I created TCNY because the parameters of bitCNY is not satisfying enough, but now I changed my mind - to do some change to bitCNY is a better way - to make one public smartcoin the best one will benefit the whole economy.
plan to discuss this topic in committee.
any thoughts?
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Would the change require a hard fork?
Would you recommend the change to any other smartcoin?
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Would the change require a hard fork?
Would you recommend the change to any other smartcoin?
no, just need to create a proposal and get it approved by committee.
at least I recommend the change also apply to bitUSD, for others I am not sure.
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Why do you want to screw current holders of bitCNY/bitUSD/whatever like this? Because you're in a short position and suffer from the latest BTS collapse?
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Why do you want to screw current holders of bitCNY/bitUSD/whatever like this? Because you're in a short position and suffer from the latest BTS collapse?
With those changes you don't really screw them because they can still sell at any price .. All that the proposed change does is ask for a 1% fee on settlements with a restriction of 0.5% of supply to be settled every maintenance interval.
And even this can be fixed by setting a proposal expiration that is .. say 30 days .. then people that don't want to pay the 1% and wanted to settle, can still settle.
I like the idea and started discussion about this a couple of times already. If the CNY-interested crowd of BTS shareholders are fine, we should derive an action plan and try to bring this to the committee!
Make sure to have an expiration of at least 30 days (that's what I see as a fair notice)
//edit: the poll you linked has been filled by only 10 people. so this probably needs some more discussions before it can be executed! I would even say, you should write a BSIP for that change for documentation reasons and to inform shareholders properly
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I support this change. I think it's long overdue for both bitCNY and bitUSD. Might even do this across the board for all smartcoins.
If max_force_settlement_volume is truly on an hourly basis, this change should be done without question.
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Why do you want to screw current holders of bitCNY/bitUSD/whatever like this? Because you're in a short position and suffer from the latest BTS collapse?
With those changes you don't really screw them because they can still sell at any price .. All that the proposed change does is ask for a 1% fee on settlements with a restriction of 0.5% of supply to be settled every maintenance interval.
And even this can be fixed by setting a proposal expiration that is .. say 30 days .. then people that don't want to pay the 1% and wanted to settle, can still settle.
You cannot make sure that every holder of bitassets will notice.
The settlement function is the "guarantee" that holders can exchange their bitassets for the equivalent worth of BTS. Bitasset holders have bought under the assumption that this guarantee will hold. Now you want to reduce that guarantee from "equivalent worth" to "99% of its value", which will automatically devalue the affected bitassets and effectively rob bitasset owners of 1% of their holdings.
IMO we're going to lose all credibility if we start changing the rules in mid-game.
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Changing the rules seems like a bad idea. Ever since the beginning, it's been said that there is a price floor for bitAssets that a user/merchant can count on.
Having said that, I think there is insufficient proof of demand - a poll of 12 results hardly counts as a empiric proof that there is really demand. I'm also missing proper research, how would Bitshares benefit if it was implemented or how is Bitshares suffering at the moment when that change is not implemented right now? A economic change like this needs proper due dilligence.
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You can see it thos way: The peg is not effected directly and you can still settle at parity but need to pay a 1% fee for your settlement ..
Merchants wont care much about it because most of them dont want to settle into BTS.
I agree that a poll doesnt give the idea any credibility. Thats why a proposal should have a 30 day expiration so that shareholders can vote out approving committee members if they dont agree.
In the end the idea is to reduce the premium of bitassets about EVERYONE is complaining. This will probably IMPROVE the peg long term and thus also the liquidity at narrower spreads, but that is of course just my prediction
@mindphlux: there is no research because we have never tried. But as you can clearly see, a settlement price if 100% results in a premium.
Also, as you can see from the history, there havent been so many settlements from bitassets.
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You can see it thos way: The peg is not effected directly and you can still settle at parity but need to pay a 1% fee for your settlement ..
No, you can't see it this way. Fees are an entirely different thing in BitShares. Relative fees for forced settlement don't exist. So whatever you call it, you're changing the rules in mid-game.
But as you can clearly see, a settlement price if 100% results in a premium.
...and of course the idea that one is the result of the other is pure speculation, too.
How about getting more data before suggesting changes. AFAIK some attempts have been made with bitassets with different parameters (TCNY/TUSD?). Do these perform better? If so, in which way are they "better" and why?
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You cannot make sure that every holder of bitassets will notice.
The settlement function is the "guarantee" that holders can exchange their bitassets for the equivalent worth of BTS. Bitasset holders have bought under the assumption that this guarantee will hold. Now you want to reduce that guarantee from "equivalent worth" to "99% of its value", which will automatically devalue the affected bitassets and effectively rob bitasset owners of 1% of their holdings.
IMO we're going to lose all credibility if we start changing the rules in mid-game.
in 0 offset setting, the holder is ok but the shorter is always hurt. why should the holder have power to force the shorter to sell BTS to him without any compensation? the 0 offset setting discourage shorting, means it discourage bitasset supply.
this is not changing rules in mid-game, the design of BTS2.0 set the committee mechanism for parameter change, now and then there are necessity to review some parameters and make necessary change, a reasonable change with good notice work will benefit the whole economy.
in China community - the main area that use bitCNY - bitCNY is accepted well, but always the supply is not enough, considering there will be more assets be traded in DEX, the supply of bitCNY is far from enough, this change mainly intent to encourage shorting.
I'll check and draft a BSIP.
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in 0 offset setting, the holder is ok but the shorter is always hurt. why should the holder have power to force the shorter to sell BTS to him without any compensation? the 0 offset setting discourage shorting, means it discourage bitasset supply.
We've had that discussion before. Settlement doesn't hurt anybody because it happens at face value. Compensation is not necessary.
Changing the rules in the proposed way *does* hurt holders, by devaluating their holdings by 1% in favour of shorters.
You haven't answered my question about your motivation for this proposal.
this is not changing rules in mid-game, the design of BTS2.0 set the committee mechanism for parameter change, now and then there are necessity to review some parameters and make necessary change, a reasonable change with good notice work will benefit the whole economy.
This change is not "necessary". If you think it is, prove it. All I've seen here are assumptions and wild speculations.
You haven't answered my question about TCNY/TUSD either, despite the fact that you're the issuer and should know the answer.
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Vaild points @pc ..
I personally still not only see a correlaction but causality between settlement offset being 0% and a premium on bitassets. That has also been discussed in the whitepaper (which was written by me though)
Anyway I am happy we have this discussion again.
In the meantime, why not even discuss a variable settlement offset? (Btw, i still see it as a percentage fee asked for by the network for providing the service of settlements)
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You cannot make sure that every holder of bitassets will notice.
The settlement function is the "guarantee" that holders can exchange their bitassets for the equivalent worth of BTS. Bitasset holders have bought under the assumption that this guarantee will hold. Now you want to reduce that guarantee from "equivalent worth" to "99% of its value", which will automatically devalue the affected bitassets and effectively rob bitasset owners of 1% of their holdings.
IMO we're going to lose all credibility if we start changing the rules in mid-game.
in 0 offset setting, the holder is ok but the shorter is always hurt. why should the holder have power to force the shorter to sell BTS to him without any compensation? the 0 offset setting discourage shorting, means it discourage bitasset supply.
this is not changing rules in mid-game, the design of BTS2.0 set the committee mechanism for parameter change, now and then there are necessity to review some parameters and make necessary change, a reasonable change with good notice work will benefit the whole economy.
in China community - the main area that use bitCNY - bitCNY is accepted well, but always the supply is not enough, considering there will be more assets be traded in DEX, the supply of bitCNY is far from enough, this change mainly intent to encourage shorting.
I'll check and draft a BSIP.
+5%
Sent from my Nexus 6 using Tapatalk
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in 0 offset setting, the holder is ok but the shorter is always hurt. why should the holder have power to force the shorter to sell BTS to him without any compensation? the 0 offset setting discourage shorting, means it discourage bitasset supply.
We've had that discussion before. Settlement doesn't hurt anybody because it happens at face value. Compensation is not necessary.
Changing the rules in the proposed way *does* hurt holders, by devaluating their holdings by 1% in favour of shorters.
You haven't answered my question about your motivation for this proposal.
I have told the motivation clearly - to encourage more bitasset supply to fulfill trade demands.
I haven't saw your discussion, but the 0 offset setting really hurt the shorter, maybe only a robber will think he definitely have the power to force a shorter to sell the collateral just at the settlement price.
this is not changing rules in mid-game, the design of BTS2.0 set the committee mechanism for parameter change, now and then there are necessity to review some parameters and make necessary change, a reasonable change with good notice work will benefit the whole economy.
This change is not "necessary". If you think it is, prove it. All I've seen here are assumptions and wild speculations.
You haven't answered my question about TCNY/TUSD either, despite the fact that you're the issuer and should know the answer.
the 0 offset hurt the shorters and discourage the bitassets supply - that is why it need to be changed, I cannot convince you if you do not want to understand.
TUSD is just defined but not actually put into use, so now let me compare the behavior of bitCNY and TCNY.
in China now transwiser is the only gateway that handle the deposit/withdraw of bitCNY and TCNY. btareserve is the main userid of transwiser, you can check the current data of bitCNY and TCNY at http://cryptofresh.com/a/CNY (http://cryptofresh.com/a/CNY) and http://cryptofresh.com/a/TCNY (http://cryptofresh.com/a/TCNY) , one obvious fact is that for bitCNY, transwiser always need to short to supply bitCNY to users and now has a big debt, because users always prefer to buy bitCNY from transwiser than short by himself, as they are afraid to be force settled. for TCNY, transwiser now have net balance without any debt, as users would like to short by themselves.
sometimes as gateway, transwiser has to issue force settlement of TCNY with paying 1% offset for liquidity, anyway this is better than the status that transwiser always has to short. if bitCNY be set 1% offset, I believe shorters will provide more bitCNY however holders do not always need to issue force settlement, as bitCNY is more wildly used and can be used in several trade pairs.
the voice from the main market area should be a main reference on whether and how to modify a smartcoin's parameters, now in China community most of the members support this change.
@xeroc afaik, MAKER use variable settlement offset in the design, the higher the collateral ratio, the higher the settlement offset, this is reasonable, and this means it is not fee charged by network, but a compensation from settler to shorter. surely BTS can also consider similar variable settlement offset, but I still strongly propose to do a simple parameter change first for bitCNY, as to implement a variable settlement offset may cost much long time.
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in China now transwiser is the only gateway that handle the deposit/withdraw of bitCNY and TCNY. btareserve is the main userid of transwiser, you can check the current data of bitCNY and TCNY at http://cryptofresh.com/a/CNY (http://cryptofresh.com/a/CNY) and http://cryptofresh.com/a/TCNY (http://cryptofresh.com/a/TCNY) , one obvious fact is that for bitCNY, transwiser always need to short to supply bitCNY to users and now has a big debt, because users always prefer to buy bitCNY from transwiser than short by himself, as they are afraid to be force settled. for TCNY, transwiser now have net balance without any debt, as users would like to short by themselves.
sometimes as gateway, transwiser has to issue force settlement of TCNY with paying 1% offset for liquidity, anyway this is better than the status that transwiser always has to short. if bitCNY be set 1% offset, I believe shorters will provide more bitCNY however holders do not always need to issue force settlement, as bitCNY is more wildly used and can be used in several trade pairs.
the voice from the main market area should be a main reference on whether and how to modify a smartcoin's parameters, now in China community most of the members support this change.
Well, I interpret that as the voice of transwiser who is taking the risk
of shorting bitcny into existence. But it has been your decision to do
so and should be part of your risk considerations.
Having said that, I still see merits in "asking for a 1% fee" (i.e.
settlement offset of 1%) or even a variable percentage in order to get
the non-settlement trades closer to the peg and reduce the premium.
However, I recognize the issues @pc is having with "changing the rules
mid-game" but the rules will only change if the shareholders agree (i.e.
do not disagree) and thus such proposal should have a long expiration.
30 days may even be to short.
I don't think we should rush this topic but instead prepare properly. I
would like to see some statistics about the actual premium for bitassets
(against settlement price) over time. Maybe @abit can help with this
using he new plugin.
@xeroc afaik, MAKER use variable settlement offset in the design, the higher the collateral ratio, the higher the settlement offset, this is reasonable, and this means it is not fee charged by network, but a compensation from settler to shorter. surely BTS can also consider similar variable settlement offset, but I still strongly propose to do a simple parameter change first for bitCNY, as to implement a variable settlement offset may cost much long time.
I don't have a direct contact to chinese investors/CNY holders, but we
might want to use bitCNY to test a settlement offset before even
considering other smartcoins. That way, a change only affects CNY
holders and not USD, GOLD holders but I don't know how to best approach
this :(
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We've had that discussion before. Settlement doesn't hurt anybody because it happens at face value. Compensation is not necessary.
I haven't saw your discussion, but the 0 offset setting really hurt the shorter, maybe only a robber will think he definitely have the power to force a shorter to sell the collateral just at the settlement price.
Please explain how the shorter is hurt when 1 CNY is exchanged for the equivalent worth of BTS.
Also, if bitassets are currently trading at a premium then shorters have an opportunity to sell above the settlement price, in which case they actually make money from forced settlement.
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in China now transwiser is the only gateway that handle the deposit/withdraw of bitCNY and TCNY. btareserve is the main userid of transwiser, you can check the current data of bitCNY and TCNY at http://cryptofresh.com/a/CNY (http://cryptofresh.com/a/CNY) and http://cryptofresh.com/a/TCNY (http://cryptofresh.com/a/TCNY) , one obvious fact is that for bitCNY, transwiser always need to short to supply bitCNY to users and now has a big debt, because users always prefer to buy bitCNY from transwiser than short by himself, as they are afraid to be force settled. for TCNY, transwiser now have net balance without any debt, as users would like to short by themselves.
sometimes as gateway, transwiser has to issue force settlement of TCNY with paying 1% offset for liquidity, anyway this is better than the status that transwiser always has to short. if bitCNY be set 1% offset, I believe shorters will provide more bitCNY however holders do not always need to issue force settlement, as bitCNY is more wildly used and can be used in several trade pairs.
the voice from the main market area should be a main reference on whether and how to modify a smartcoin's parameters, now in China community most of the members support this change.
Well, I interpret that as the voice of transwiser who is taking the risk
of shorting bitcny into existence. But it has been your decision to do
so and should be part of your risk considerations.
Having said that, I still see merits in "asking for a 1% fee" (i.e.
settlement offset of 1%) or even a variable percentage in order to get
the non-settlement trades closer to the peg and reduce the premium.
However, I recognize the issues @pc is having with "changing the rules
mid-game" but the rules will only change if the shareholders agree (i.e.
do not disagree) and thus such proposal should have a long expiration.
30 days may even be to short.
I don't think we should rush this topic but instead prepare properly. I
would like to see some statistics about the actual premium for bitassets
(against settlement price) over time. Maybe @abit can help with this
using he new plugin.
@xeroc afaik, MAKER use variable settlement offset in the design, the higher the collateral ratio, the higher the settlement offset, this is reasonable, and this means it is not fee charged by network, but a compensation from settler to shorter. surely BTS can also consider similar variable settlement offset, but I still strongly propose to do a simple parameter change first for bitCNY, as to implement a variable settlement offset may cost much long time.
I don't have a direct contact to chinese investors/CNY holders, but we
might want to use bitCNY to test a settlement offset before even
considering other smartcoins. That way, a change only affects CNY
holders and not USD, GOLD holders but I don't know how to best approach
this :(
this topic is not only relevant to transwiser, it is relevant to the whole ecosystem, I take transwiser and bitCNY/TCNY as example to show that 0 offset really discourage shorters, if shorters are always discouraged, with low supply level smatcoin cannot play the role of a senseful trading medium.
yes, we should first apply the change to bitCNY and observe what's the different behavior between bitCNY and other smartcoins, especially bitUSD, this can also help us to understand "what will 1% offset bring" more deeply.
however, I think 30 days expiration is long enough, we need to balance stability and efficiency.
@pc
suppose Alice buy some BTS at 0.04CNY and short them to get 1000 bitCNY to buy some assets, the margin call price of the debt position is 0.02CNY, if the BTS price fall to 0.03CNY and Alice's debt position is force settled, is she hurt?
the normal business logic is: she borrow 1000 bitCNY with enough collateral, then the collateral should not be force settled except that the collateral price fall below the margin call price.
you may say that she can buy BTS at 0.03CNY and hedge this risk, but she need to pay time and effort to follow what happen, and even when she try to do this, she may not able to find the chance to buy BTS at 0.03CNY as the price always change quickly, anyway she need to pay more cost of time/effort/chance to avoid loss. this is why she is hurt.
holder has the choice of whether to issue force settlement, but shorter has no option to refuse being force settled.
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@pc
suppose Alice buy some BTS at 0.04CNY and short them to get 1000 bitCNY to buy some assets, the margin call price of the debt position is 0.02CNY, if the BTS price fall to 0.03CNY and Alice's debt position is force settled, is she hurt?
Well, that's HER, who took the risk and she should know about that risk
prior to borrowing anything from the network. Being "hurt" doesn't
really fit here, she gambled, and lost at her very own fault.
holder has the choice of whether to issue force settlement, but shorter has no option to refuse being force settled.
Setting a 1% offset won't change anything here. Shorters always have
just two options:
* adjust collateral
* get margin called
What changes is the premium (maybe) and the liquidity (also maybe).
But I am willing to support such an experiment in bitCNY unless someone
can come up with a solid argumentation to NOT try it. For me, a
settlement offset is still just a percentage fee that is taken by the
network (and thus profits all shareholders at the cost of long-positions
that can get out before this gets implemented on chain) and might bring
in some liquidity.
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@pc
suppose Alice buy some BTS at 0.04CNY and short them to get 1000 bitCNY to buy some assets, the margin call price of the debt position is 0.02CNY, if the BTS price fall to 0.03CNY and Alice's debt position is force settled, is she hurt?
She is hurt by the price fall, obviously.
She isn't hurt by the settlement - after the settlement her position has the same overall value as before the settlement.
But I am willing to support such an experiment in bitCNY unless someone
can come up with a solid argumentation to NOT try it.
The solid argument is that modifying the settlement guarantee is hurting bitCNY holders by effectively robbing them of 1% of their assets.
Committee members voting for such a proposal may even be legally liable for the resulting financial damage.
Robbing holders of bitAssets will destroy all credibility of bitAssets, nobody's going to touch them again with a long pole. Committee members voting for such a proposal will be responsible for this, too.
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Guys, soon we'll have a new smart coin ARS, why not test the new parameter with it first? Nobody would get hurt with a new asset.
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Guys, soon we'll have a new smart coin ARS, why not test the new parameter with it first? Nobody would get hurt with a new asset.
Good idea ...
Paging @elmato
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I generally agree @bitcrab that a lower offset is good. I'll take it one step further and say forced settlement is unnecessary. We designed CASH.USD to do exactly this for the reason @bitcrab mentions. If the committee decides to lower the offset and disable forced settlement there would be no reason for CASH.USD and we would use bitUSD. If only the offset is changed and nothing is done with forced settlement then we'll probably still continue on with CASH.USD.
It would be great if we didn't have to run our own. Would the committee members consider the offset as bitcrab desires and also remove forced settlement? Read about CASH.USD here (https://bitsharestalk.org/index.php/topic,22192.msg289691.html#msg289691)
These are experiments and it may be fine for now to run in parallel, but it would be good to know where the community and committee stand on this.
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Well, that's HER, who took the risk and she should know about that risk
prior to borrowing anything from the network. Being "hurt" doesn't
really fit here, she gambled, and lost at her very own fault.
yes, everyone should understand and accept the rule before playing games, but this does not mean any rule is fair.
Setting a 1% offset won't change anything here. Shorters always have
just two options:
* adjust collateral
* get margin called
What changes is the premium (maybe) and the liquidity (also maybe).
But I am willing to support such an experiment in bitCNY unless someone
can come up with a solid argumentation to NOT try it. For me, a
settlement offset is still just a percentage fee that is taken by the
network (and thus profits all shareholders at the cost of long-positions
that can get out before this gets implemented on chain) and might bring
in some liquidity.
in my view, if we can say force settlement is a service, then the offset is the service fee paid from holder to shorter.
The solid argument is that modifying the settlement guarantee is hurting bitCNY holders by effectively robbing them of 1% of their assets.
Committee members voting for such a proposal may even be legally liable for the resulting financial damage.
Robbing holders of bitAssets will destroy all credibility of bitAssets, nobody's going to touch them again with a long pole. Committee members voting for such a proposal will be responsible for this, too.
modifying settlement offset is just to make the rule more fair, force settlement is the final way for holders to get liquidity, not the only way，not the routine way. and if the proposal is applied, holders has at least 30 days to execute force settlement with 0 offset to avoid the loss.
committee has pushed several big change, this is not the biggest one, and not the last one, one of committee's mission is to optimize the network parameters, of course the precondition is the change get enough support from shareholders.
this is not robbing holders, this is just ask holders to pay when they are served by shorters.
Guys, soon we'll have a new smart coin ARS, why not test the new parameter with it first? Nobody would get hurt with a new asset.
surely bitARS can set 1% offset, but I don't think China community need to wait to see bitARS's behavior before moving forward.
I generally agree @bitcrab that a lower offset is good. I'll take it one step further and say forced settlement is unnecessary. We designed CASH.USD to do exactly this for the reason @bitcrab mentions. If the committee decides to lower the offset and disable forced settlement there would be no reason for CASH.USD and we would use bitUSD. If only the offset is changed and nothing is done with forced settlement then we'll probably still continue on with CASH.USD.
It would be great if we didn't have to run our own. Would the committee members consider the offset as bitcrab desires and also remove forced settlement? Read about CASH.USD here (https://bitsharestalk.org/index.php/topic,22192.msg289691.html#msg289691)
These are experiments and it may be fine for now to run in parallel, but it would be good to know where the community and committee stand on this.
in my view, force settlement is a necessary and important feature, we can try to set better parameters to avoid negative effect to the economy, I don't think it's a good idea to remove it.
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Setting a 1% offset won't change anything here. Shorters always have
just two options:
* adjust collateral
* get margin called
What changes is the premium (maybe) and the liquidity (also maybe).
But I am willing to support such an experiment in bitCNY unless someone
can come up with a solid argumentation to NOT try it. For me, a
settlement offset is still just a percentage fee that is taken by the
network (and thus profits all shareholders at the cost of long-positions
that can get out before this gets implemented on chain) and might bring
in some liquidity.
in my view, if we can say force settlement is a service, then the offset is the service fee paid from holder to shorter.
The offset is NOT paid to the shorter but to the issuer of the asset,
i.e. committee-account in case of bitCNY and thus is paid to all bitshares
shareholders!!
The solid argument is that modifying the settlement guarantee is hurting bitCNY holders by effectively robbing them of 1% of their assets.
Committee members voting for such a proposal may even be legally liable for the resulting financial damage.
Robbing holders of bitAssets will destroy all credibility of bitAssets, nobody's going to touch them again with a long pole. Committee members voting for such a proposal will be responsible for this, too.
modifying settlement offset is just to make the rule more fair, force settlement is the final way for holders to get liquidity, not the only way，not the routine way. and if the proposal is applied, holders has at least 30 days to execute force settlement with 0 offset to avoid the loss.
committee has pushed several big change, this is not the biggest one, and not the last one, one of committee's mission is to optimize the network parameters, of course the precondition is the change get enough support from shareholders.
this is not robbing holders, this is just ask holders to pay when they are served by shorters.
@pc, this is not really a "robbery" since they can still sell their long
position at market prices into the order book. They just can't settle it
without a 1% fee/loss.
But I do recognize the credibility issuer here. We advertised bitUSD to
be redeemable for 1$ woth of BTS but changing the rules will result in
them being "settled" at $0.99. Still, currently people won't settle
their longs because they could sell the bitUSD for more than $1 at the
market because of the premium. If we reduce the premium, then they can
probably (experiment here) sell their bitUSD for ~$1 at the market and
settle for slightly less (-1%).
It changes the game, but does IMHO not rob the longs of their bitUSD
value!
Not sure about legal liabilities as committee members merely act in
favor of the shareholders. Any shareholder can start a proposal to tweak
any parameter and committee-members are forced to at least decide
whether to support or not support any proposal brought forward. Also,
there was no contract signed by any party that guaranteed a settlement
price of 100% in a legal binding manner (credibility put aside).
Even banks are changing their deals from time to time and give you an
extraordinary option to quit a contract. Same thing here with a 30 day
notice.
At least we are having a solid discussion about this.
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Setting a 1% offset won't change anything here. Shorters always have
just two options:
* adjust collateral
* get margin called
What changes is the premium (maybe) and the liquidity (also maybe).
But I am willing to support such an experiment in bitCNY unless someone
can come up with a solid argumentation to NOT try it. For me, a
settlement offset is still just a percentage fee that is taken by the
network (and thus profits all shareholders at the cost of long-positions
that can get out before this gets implemented on chain) and might bring
in some liquidity.
in my view, if we can say force settlement is a service, then the offset is the service fee paid from holder to shorter.
The offset is NOT paid to the shorter but to the issuer of the asset,
i.e. committee-account in case of bitCNY and thus is paid to all bitshares
shareholders!!
Wow, this is big difference. Tested on testnet?
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The offset is NOT paid to the shorter but to the issuer of the asset,
i.e. committee-account in case of bitCNY and thus is paid to all bitshares
shareholders!!
Wow, this is big difference. Tested on testnet?
I have not .. but I pretty much had that IMPRESSION ..
Let me rephrase:
I THINK, that the offset is paid to the issuer and not the shorter.
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Well .. turns out I was wrong:
This is the percent to adjust the feed price in the short's favor in the event of a forced settlement.
https://github.com/cryptonomex/graphene/blob/006d54863312c7daf1ccb73d5940ec658c860efb/libraries/chain/include/graphene/chain/protocol/asset_ops.hpp#L97-L98
Need to think more about the consequences of this
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This is the percent to adjust the feed price in the short's favor in the event of a forced settlement.
This is what I've been saying all the time. You're stealing from the holders in favour of the shorters.
Bitcrab/Transwiser are shorters, so they clearly have their own interests at stake here, yet he claims to be acting in the best interest of the network. Just like last time we had a discussion (and rushed actionism) about forced settlement.
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This is the percent to adjust the feed price in the short's favor in the event of a forced settlement.
This is what I've been saying all the time. You're stealing from the holders in favour of the shorters.
Bitcrab/Transwiser are shorters, so they clearly have their own interests at stake here, yet he claims to be acting in the best interest of the network. Just like last time we had a discussion (and rushed actionism) about forced settlement.
You need to ask yourself, do we want people to provide BitAsset liquidity or not? Also, why should holders be able to force shorters to buy from them? Why shouldn't holders have to sell on the open market like anyone else? And if shorters should be forced to buy from them, then why shouldn't shorters be paid a fee for that?
The committee was tasked with the responsibility of improving network parameters, right? So we should have absolutely no problem doing so, if that's what shareholders decide upon. Of course, current holders may have bought with the knowledge that they would be able to settle without a fee. Because of that, it would be great if we could change the offset such that current holders would not be subject to it, only those buying BitAssets going forward. But I'm sure that's impossible without some development work. So if a proposal is put forth to change the offset and it's passed by shareholders, then we will have imposed a new fee. Big deal. It happens everywhere. And if it helps encourage people to short BitAssets (why wouldn't it?), then good.
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This is the percent to adjust the feed price in the short's favor in the event of a forced settlement.
This is what I've been saying all the time. You're stealing from the holders in favour of the shorters.
Bitcrab/Transwiser are shorters, so they clearly have their own interests at stake here, yet he claims to be acting in the best interest of the network. Just like last time we had a discussion (and rushed actionism) about forced settlement.
transwiser is a gateway, it is not always a shorter or holder, depend on the supply/demand of a smartcoin, actually in current moment transwiser is a shorter of bitCNY and holder of TCNY(with 1% offset), you can check the transaction records of btareserve, this account requested settlement of about 100k TCNY in the last 2 weeks, if bitCNY is applied 1% offset, it's very possbile that more users would like to short bitCNY and transwiser will be a holder of bitCNY.
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You need to ask yourself, do we want people to provide BitAsset liquidity or not? Also, why should holders be able to force shorters to buy from them? Why shouldn't holders have to sell on the open market like anyone else? And if shorters should be forced to buy from them, then why shouldn't shorters be paid a fee for that?
That's not how settlement works. The long doesn't force the short to buy
at the market. Instead, all that happens is that whoever settles a long
position buys a portion of the collateral of the short at a FAIR PRICE
(i.e. price feed) - and reduce the shorters debt. That means that the
shorter can re-enter his short position easily buy borrowing again from
the network and selling them again in the market. If you are lucky and
there is a stupid settlement (i.e. highest bids are above feed), then
the shorter can even make a profit out of being settled and
re-borrowing/shorting.
The committee was tasked with the responsibility of improving network parameters, right?
Depends on how you define "improving".
So we should have absolutely no problem doing so, if that's what shareholders decide upon.
I don't think it is so obvious what to do in this case.
Of course, current holders may have bought with the knowledge that they would be able to settle without a fee. Because of that, it would be great if we could change the offset such that current holders would not be subject to it, only those buying BitAssets going forward.
That's not possible without a hard forking change of the code.
But I'm sure that's impossible without some development work. So if a proposal is put forth to change the offset and it's passed by shareholders, then we will have imposed a new fee. Big deal. It happens everywhere. And if it helps encourage people to short BitAssets (why wouldn't it?), then good.
@bitcrab, what's the progress on your BSIP?
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is preparing, will be published soon. @xeroc
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submitted issue for BSIP: https://github.com/bitshares/bsips/issues/13
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Interesting discussion. I can definitely understand the arguments on both sides. I think I would support a change to a 1% offset to the forced settlement price. However, I think the difference should go to the shorter, not the asset creator.
I don't agree with removing forced settlement entirely, as @merivercap proposes.
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Or what about a compromise: 0.5% offset? This would be an interesting thing to vote on.
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Interesting discussion. I can definitely understand the arguments on both sides. I think I would support a change to a 1% offset to the forced settlement price. However, I think the difference should go to the shorter, not the asset creator.
offset goes to the SHORTER .. I was mistaken with my statements above!