Show Posts

This section allows you to view all posts made by this member. Note that you can only see posts made in areas you currently have access to.

Messages - Gleepower

Pages: [1] 2
General Discussion / Re: When to expect the bitUSD revival?
« on: December 08, 2018, 11:55:02 am »
Smartcoins are an inherently a risky asset since they are backed by cryptocurrencies which tend to be extremely volatile compared to the currency of the smartcoin. This is not like a bank which has assets which correlate much more strongly with its liabilities. As such, you should be aware that smartcoins are very risky derivatives, which you should use with caution. I'm sorry for your loss, since I think it is unlikely you will get your bitusd 1-1 with a dollar.

General Discussion / Re: BitCNY Force settlement offset still at 5%?
« on: January 21, 2018, 05:57:07 pm »
Yes, bitCNY has tended to trade below its feed price, which I think is because the of the fact that you only get 0.95 CNY worth of BTS for settling. Historical data on bitCNY market price versus bitCNY feed price would be interesting to back this up.

If you had asset which tracked the dollar had as its underlying a share in a bank, then a borrower of this asset would get dividends from (collateral - feed_price * debt) units of the share and the smartcoin owner would get feed_price * number_owned units of the share.

One problem if you wanted to have bank deposits which pay interest would be to when you make the payments since if you make the payments every year, then the price of the smartcoin will rise closer to the dividend date, and drop instantly after the dividend is paid, which defeats the point of the smartcoin tracking the dollar.

What is the definition of a default here? Legally, a default is when a firm cannot pay a due payment which it is legally obligated to pay. Tether LTD. has no obligation to redeem tethers, and owners of Tether have no claim on Tether Ltd as they say in their legal page:

"Purchase and Redemption of Tethers: The Site is an environment for the purchase and redemption of Tethers. Once you have Tethers, you can trade them, keep them, or use them to pay persons that will accept your Tethers. However, Tethers are not money and are not monetary instruments. They are also not stored value or currency.
There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money. We do not guarantee any right of redemption or exchange of Tethers by us for money. There is no guarantee against losses when you buy, trade, sell, or redeem Tethers."

So by the legal definition of default, it doesn't look like it's possible for a tether token to default, since it's not a claim on anything. Tethers are not I.O.Us.

General Discussion / Re: Options and Futures contracts
« on: January 02, 2018, 08:26:58 pm »
Damn that's pretty ingenious - it seems you're right in thinking you can implement them as an MPA. This is much better than my solution. As you say the main issues
for options are that they need a different collateral function one that's ideally related to the volatility of the price of the underlying against the collateral asset AND the current profit.

For a normal MPA, the collateral function is 
Code: [Select]
(collateral / debt * feed_price ).

The collateral function is a function of the feed_price and always needs to be above the MCR.

Off the top of my head, a collateral function of
Code: [Select]
(collateral / debt * feed_price + (0.2 * strikeprice))) would work
and solve your collateral of 0 when the feed price is 0 problem. For example, if the MCR is 1.2 - assume your call option is written and the bitcoin price is 15000 usd. Your
debt is 1 BTC. The feed price is 0. Therefore your collateral needs to be at least 1.2 * (15000*0.2 + 0) = 3600. If the price of bitcoin rose to
17000, then the feed price would be 2000 and you would have to put up at least 1.2 * (1500 + 2000) = 6000.

I think futures is much harder to do with the method however, if we made the feed price:

Code: [Select]
if today <= maturity then price_feed = bitcoin_price_in_usd - 15000)

we would need to do 4 different things:

1) have a different collateral function (as with options)
2) BOTH sides need to now put up collateral
3) we need to only allow settlement at maturity date
4) we need to have 'negative' settlement. For example, if I went long on a bitcoin future, and the price fell to 14500, and we reached
maturity date, then I would force settle for -500 bitusd.

This would be much more radical than an option, since buying a future would require putting up margin, whilst buying a bitusd or a btcoption (under our system)
can be a simple transfer.

I think a way of giving a custom collateral function to MPA would really make them more flexible to implement things like options (and potentially many other things).

General Discussion / Re: Options and Futures contracts
« on: January 01, 2018, 11:33:01 pm »
Futures I haven't thought about - but potentially might need some sort of clearing party, no idea how this would interact with smart contracts/blockchain.

General Discussion / Re: Options and Futures contracts
« on: January 01, 2018, 10:53:09 pm »
Yes you're definitely on to something there. Owners of MPA (Smartcoins right?) have the right but not the obligation to settle at the feed price. Problem is that MPA is more than an option since it's not just a right to buy, it's a right to get it without handing over anything (e.g. a bitusd gives you 1 dollar worth of BTS, it doesn't just give you right to buy 1 BTS at a dollar price). I can't see directly tho how you recreate a european option from an MPA.

I was thinking it over and there's many routes you can go over. I was thinking one is where options are fully collateralized - those who write a call option for asset A at price P in terms of asset B would have to put up asset A (and those who write a put option would put up asset B) as collateral for the duration of the contract. The owner of the option could at any time exchange asset B's for asset A's at price P from the issuer.

Under this system, the underlying could be any bitshares asset.

It's nice and simple with no counterparty risk. However, being able to write naked options would be nice as well. But I think that would be much more complex and would also run the risk of default. Also using a feed price to have cash(bts?)-settled options on non-bitshares assets would be a boon as well.

I also think it would be great publicity for bitshares having options, because there is no good crypto-exchange for options AND our options would be secured by smart contracts so there is less scam risk.

General Discussion / Options and Futures contracts
« on: December 26, 2017, 07:32:24 pm »
Would there ever be interest in getting options and futures smart contracts for bitshares? I think options especially would be a great boon for bitshares, since no one really offers options on bitcoin at the moment. Are there any barriers to getting these implemented? (expiry date, counterparty risk).

Hey guys,

the BTWTY Smartcoin based on the crypto etf currently (2017/12/24 17:00 GMT) has a settlement price of 446,681 BTS/BTWTY yet people are buying this at prices more than double this, at
1,094,101 BTS/BTWTY.

If you were allowed to short this market, you could sell the long position for more than the collateral you put in to short it, since the market price >= feedprice * 1.75. I don't understand why people are buying this smartcoin at such an incredible premium. Do the purchasers not understand that their effectively buying a callable loan for £5 for £12?

As an aside, why is no one allowed to short this? Doing so might allow its price to go to a reasonable level - giving us a nice diversified etf in crypto secured on the blockchain.

Technical Support / Re: Force settled bit CNY - haven't received any BTS
« on: December 20, 2017, 03:45:47 pm »
Obviously at the end of the day this is my fault (as you say I didn't read the smartcoin contract precisely), but luckily I only used a small amount to test (and I don't think I've lost money, just didn't make any). I just think this looks very unprofessional and obtuse to newcomers to the platform (such as myself). Also why can the terms of the smart contract be immediately changed without the parties consent? Are all assets in bitshares like this?

Technical Support / Re: Force settled bit CNY - haven't received any BTS
« on: December 20, 2017, 02:36:49 pm »
So the smartcoins are actually loans for 0.95% of their respective currencies/assets? This seems very bizarre. In any case, I think the website owners should update their descriptions, since it's most likely illegal to misinform investors like this. It really gives a bad impression (or at least it did to me) of what seems like a very promising project.

Technical Support / Re: Force settled bit CNY - haven't received any BTS
« on: December 20, 2017, 01:49:21 pm »
Wait sorry I'm slightly confused by this fee - so the bitcny contract is really a loan of 0.95% of a bitcny rather than 1 bitcny? Surely that can't be correct - I'm quite new to this and by the website my understanding is that these smartcoins are collateralized loans where each smartcoin long position gives you the right to settle at the feed price for each unit (which is what guarantees the long position is worth at least 1 CNY)?

Technical Support / Re: Force settled bit CNY - haven't received any BTS
« on: December 20, 2017, 10:18:51 am »
Hmm, it said that I was going to pay 0.61 BTS for force settling, but that looked fixed. Is there an additional 5% fee which didn't appear?

Technical Support / Re: Force settled bit CNY - haven't received any BTS
« on: December 20, 2017, 12:26:56 am »
Ah okay that's very good to hear. It would be nice if pending settlements could appear in the GUI somehow.

Pages: [1] 2