What does this negative interest mean? Where it is going to be applied.

Quote from: jakub on December 07, 2015, 11:38:17 pm

Quote from: Helikopterben on December 07, 2015, 09:42:07 pm

You are not borrowing bts from the system.  You are borrowing bts from yourself because you are the owner of that bts being used as collateral.  The system itself does not own any bts.

It's bitUSD (not BTS) that's being borrowed.

The system does not own bitUSD.  I cannot borrow an asset that no one or no thing owns.

Yes, you can. System creates bitUSD for you from the air on your demand and it becomes your liability, aka debt. All banks do this.

I don't think the short seller is a lender/borrower.

The current BitAssets are bit like a contract for difference so it's just a market that matches buyers and sellers.

It is a contract for difference, but you still need to borrow bitAsset to create it into existence. It becomes your liability, aka debt.

If the shorts were extremely bullish they'd be wiling to pay a premium to longs to take the other side of the contract and vice versa.

I don't know though.

This is true. Saying that shorts should not pay premium, I was not correct. They may agree to pay under certain conditions.

Edit:  If I buy a house and go to the bank for a loan, I am not required to put a 200% down payment toward the loan as the borrower.  Same logic applies.

You continue messing things up. Banks either charge interest for loans or require collateral or do both. Usually, higher collateral you deposit, less interest they charge you. You don't have to pay interest for borrowing bitAssets, because you need to deposit very high collateral.

Opinions and facts must be tested.  How are the alternatives being tested?

I tend to agree with proposal to test bitAssets which pay premium or interest to holders. Setting positive interest would motivate holders and demotivate borrowers, increasing demand and reducing supply which would push the price up. Setting negative interest would reduce  demand and increase supply which would push the price down.  This could give an efficient way to keep the asset close to peg.

Quote from: yvv on December 07, 2015, 04:41:07 pm

Quote from: Helikopterben on December 07, 2015, 04:12:51 pm

Quote from: yvv on December 07, 2015, 01:55:01 pm

Quote from: Helikopterben on December 07, 2015, 02:53:14 am

First, we need to understand the roll of the short seller.  The short seller is a lender that provides a service to the network by lending bts to borrowers in the form of smartcoins.  Lenders do not lend money for free so they will either charge interest or charge a premium.  Otherwise, the risk/reward doesn't work.  For example, if I lend 1 usd into existence at a rate of 300 bts/usd with 2x collateral of 600bts, then my risk of loss is 100% of outlay (with a 50% drop in price) while my potential gains are only 50% of outlay.  It just does not make sense to enter this agreement unless I charge a fee to compensate for the added risk.

The short seller is a borrower, not a lender. You borrow bitUSD to provide them to the market. Those who buy these bitUSD are the lenders.

If that is correct, then why do short sellers not PAY premium to smartcoin buyers?  Borrowers almost always pay either premium or interest to lenders.  By your logic, the short seller should pay premium to the buyer.

Short sellers should not pay any premiums, they are already fucked up enough for borrowing bitAssets. Why do you want them to be fucked up even more?

I see alot of disagreements here.  Why not test your opinions in the market by having a smartcoin competition that awards something like a month's worth of worker proposal wages after x months to the smartcoin that best maintains the peg?

Seems to me the best way to go about this while being productive...

These are not opinions. This is how shorting currently works. Short seller is a borrower, not a lender. He borrows money to have a leverage. He pays for loan by exposing himself to a risk. Paying interest or premium would demotivate from borrowing bitAsset and reduce the supply. I agree, however, that this would be an interesting experiment.

First, we need to understand the roll of the short seller.  The short seller is a lender that provides a service to the network by lending bts to borrowers in the form of smartcoins.  Lenders do not lend money for free so they will either charge interest or charge a premium.  Otherwise, the risk/reward doesn't work.  For example, if I lend 1 usd into existence at a rate of 300 bts/usd with 2x collateral of 600bts, then my risk of loss is 100% of outlay (with a 50% drop in price) while my potential gains are only 50% of outlay.  It just does not make sense to enter this agreement unless I charge a fee to compensate for the added risk.

The short seller is a borrower, not a lender. You borrow bitUSD to provide them to the market. Those who buy these bitUSD are the lenders.

Basket would propably have to have precious metals, index funds, bonds and maybe some currencies. I'd really like to see opinions on this from people who have actually researched the subject.

Just select one of these indexes and peg MPA to it:

http://etfdb.com/compare/volume

All of these indexes are composed by skilled economists to be attractive investment instruments for different types of investors. Their volume show their attractiveness to customers. It is unlikely that you can come up with a new index which will beat these top 100.

Also very important question: do you think there is enough demand for this MPA? Would people be willing to short and trade it so that it's worth creating?

Creating a motivation for issuing MPA on bitshares is a difficult task. Asset creator has to take a risk to invest into spinning up the market. But, the ability to invest into index following funds can be sold as a unique feature of bitshares, since afaik none of other cripto exchanges have such an option.