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Messages - armin

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1
General Discussion / Re: New mechanism to handle bad debt (black swan)
« on: October 17, 2018, 05:33:50 pm »
Actually, thinking about it more, this solution will cause a number of major problems:

1. As the price moves down sharply, there will be more and more "stuck" orders on the order book (accumulation)
2. The next time a bull market is in swing, the stuck orders will prevent the price from going to new highs

This solution is actually "shorting a bull market", meaning it creates a debt in a bear market (accumulated orders) that needs to be repaid when a bull market is in swing.

Thoughts?

2
General Discussion / Re: New mechanism to handle bad debt (black swan)
« on: October 17, 2018, 05:30:09 pm »
Wait this doesn't make sense. If a debt position is < 100% CR, lets say 80% CR, then this new account will take the 80% CR BTS and buy the bitasset and burn it? But the problem is that an extra 20% of the bitassets was issued by the blockchain. Effectively, the blockchain is "printing bitassets" out of thin air?

No, the new account will try to buy the 100% debt for the available 80% CR. This is probably to far away from the market price, so the order will stay on the book. As soon as the price recovers, the order will be filled and the full debt will be repaid.

(In reality, with MSSR > 0, the account will try to buy 100% debt for 110% CR. For large positions this will result in the same premium that we have had with the old margin call rule, at least temporarily until the feed price adjusts.)

The problem here is that the price is not guaranteed to recover. With BSIP18 at least the bitasset is "guaranteed" to be de-pegged. And it doesn't seem like you can de-peg a small percentage of the outlying bitasset...

3
General Discussion / Re: New mechanism to handle bad debt (black swan)
« on: October 17, 2018, 04:33:34 pm »
Wait this doesn't make sense. If a debt position is < 100% CR, lets say 80% CR, then this new account will take the 80% CR BTS and buy the bitasset and burn it? But the problem is that an extra 20% of the bitassets was issued by the blockchain. Effectively, the blockchain is "printing bitassets" out of thin air?


4
General Discussion / Re: Announcement on BSIP42 relevant actions
« on: October 17, 2018, 04:22:59 pm »
No matter if bitUSD holders convert their bitUSD to BTS via margin calls or via forced settlements, the BTS are (forced) paid by debt positions with least collateral ratio, aka by bitUSD borrowers/creators, so what's the difference? IMHO there is no difference.

bitasset value = max(market price, settlement price)
If you take out settlement, this means bitasset value = market price.
The former formula gives a relative minimum price to the feed, but the latter formula looks exactly like UIAs.

So effectively, taking out settlement will make bitassets the same as UIAs in terms of value.

Thoughts?

Essentially you're saying that if you sell some amount of PMA and nobody will buy, its trading price will be pushed lower than its value.

Actually, you ignored how MPA supply is created and who are on the market. Not like UIAs, PMAs are created with debt positions, this means you won't have unlimited amount to sell. In addition, debt positions are always on the market, with BSIP42 or a dynamic MCR-based mechanism, if you place an order to sell some PMA below its value, there will be margin calls appear to fill your order, thus the trading price would be guaranteed. Force-settlements aren't in this process at all.

True, good point! Actually maybe I need to adjust the formula a little bit. Basically what you're saying is that the supply of bitassets is self-regulating with BSIP42 so that it maintains the peg. This means the supply will increase/decrease to fit a tight peg. Change in supply will lead to some change in market price. Interesting

EDIT: OOH that makes sense, so in an empty market there is almost always some form of BTS sell pressure, therefore it will only be "half empty"

5
actually BSIP42 is already active on bitUSD, otherwise bitUSD would have a big premium as before.

BSIP42 is irrelevant to MCR adjusting, the new MCR-based solution should have its own BSIP.

yes we need metrics to evaluate the feed price, as a base I think we need a chart that involve feed price from all witnesses, median price, latest price and some other reference price, seems someone began working on this?

Who's working on it?

6
General Discussion / Re: Announcement on BSIP42 relevant actions
« on: October 16, 2018, 10:26:54 pm »
No matter if bitUSD holders convert their bitUSD to BTS via margin calls or via forced settlements, the BTS are (forced) paid by debt positions with least collateral ratio, aka by bitUSD borrowers/creators, so what's the difference? IMHO there is no difference.

bitasset value = max(market price, settlement price)
If you take out settlement, this means bitasset value = market price.
The former formula gives a relative minimum price to the feed, but the latter formula looks exactly like UIAs.

So effectively, taking out settlement will make bitassets the same as UIAs in terms of value.

Thoughts?

7
General Discussion / Re: Announcement on BSIP42 relevant actions
« on: October 09, 2018, 11:20:23 am »

* MSSR: at 100% if premium >=0%, else (100-premium*penalty)% if premium <0 (feedback) - this way, we cause margin calls to raise the price in case there is a discount - "penalty" would cause the margin call to pay a premium

(100-premium*penalty)% means < 100% MSSR if premium < 0? How's that possible

8
General Discussion / Re: Announcement on BSIP42 relevant actions
« on: October 06, 2018, 08:03:04 pm »

For instance, according to Peter Conrad, the current situation may well
be achieved by using the actualy/fair price feed and a short squeeze
protection ratio of 0%. That would lead to margin calls to execute at
the price feed instead of additional penalty of additional 10%. The only
drawback (that might not be one) is that the short protection ratio
cannot be negative. That means that in case there is a margin call
pending in the books, people that want bitUSD will provide a "premium"
to the market to snatch bitUSD from the margin calls.
If this becomes a problem, the price feed could still be "modified", but
at all other times, the price feed would reflect the fair price.

From what I understand, the MSSR being >0 actually serves the purpose of offsetting the risk of holding smartcoins from going into global settlement mode. In global settlement mode, the smartcoin won't be properly pegged anymore.

The current MSSR seems to be a balancing act to make global settlement mode much less likely, as the margins calls get back to the designated MCR quickly. If the MSSR = 0, global settlement mode becomes more likely and holding smartcoins becomes much less attractive actually (which is the opposite of what bitcrab is aiming for, that is if the holders of the smartcoin realize this)

Thoughts? Maybe I'm wrong to understand that it makes global settlement more likely.

Anyhow, MSSR=0 seems like a decent experiment

9
General Discussion / Re: Announcement on BSIP42 relevant actions
« on: October 03, 2018, 06:06:18 am »

BitShares has been around and around trying to come up with a SmartCoin algorithm that strikes that balance but I fear due to differences in economic principles there will always be a strong tension by one camp or another to change the rules to their advantage. Remember, before the promise of redeem-ability through forced settlement people were creating sock puppet accounts and draining the reserve pool. That problem is no more.


Interesting, I wasn't here back then. Why did people have to make sock accounts to get their collateral back? Were SmartCoins backed by the reserve pool?

10
General Discussion / Re: Announcement on BSIP42 relevant actions
« on: October 02, 2018, 01:06:21 pm »
Your logic is sound except for one point:
That said, if we want a fixed exchange rate, we need to "break" the promises somehow, or to limit capital movement somehow. This sounds unacceptable for some people, but unfortunately it's the fact.

You don't need to break promises. You don't need to continue making the same promises while you're actively breaking them.

The original design of our SmartCoins favours free capital movement and independent policy over fixed exchange rate.

You prefer fixed exchange rate over independent policy. Fine. You can have that without breaking any promises: create a new type of SmartCoins.


The problem with creating a new SmartCoin is the adoption part, network effects are really hard to bootstrap at first. I think that's why theres been this push for changing the existing SmartCoins. Also there's the problem of naming. It's hard to name the new assets without confusing users

11
There seems to be a lot of disagreement because there is no clarity or measure on "how good" or successful the BSIP algorithm is. I have an idea. Why not simulate these BSIPS on the testnet with fake market bots? The results can be sped up by simply making the bots' decision making times faster. Then we have empirical evidence of what the actual effect of the BSIP is, before it actually happens on the mainnet.

12
General Discussion / Re: Announcement on BSIP42 relevant actions
« on: October 02, 2018, 01:59:48 am »
Some thoughts:

The premium seems to be "the cost of securing collateral and preventing black swans"

Premium is not good for shorters, but good for the blockchain.

Shorters may seem disadvantaged, and actually it is true. But they are also disadvantaged in traditional markets, ie you need to pay interest on margin loans

13
@bitcrab why not lower MCR to lower than 1.75 for bitCNY? Then you can leverage more and lessen the shortage

14
General Discussion / Re: Somebody might enlighten me why BSIP42 on BitUSD ?
« on: September 29, 2018, 10:50:15 pm »
The problem is many of the parameters are not "locked in" by the code, they can be changed any time

15
General Discussion / Re: Somebody might enlighten me why BSIP42 on BitUSD ?
« on: September 29, 2018, 03:42:10 am »
why r u exiting @zhangweis

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