A couple of things I realise I'm still not clear on. I'm happy to be pointed to a document that explains this in simple terms.

Is it the case that orders submitted, cancelled or filled during a 10 second round, cannot be received and displayed by clients as part of the market state until that block is produced and synced? (as opposed to being broadcast immediately for all clients to display in the market state?).

Does the matching algorithm effectively get applied once every 10 seconds at the end of each block, when it is produced?
Does it take any account of the time sequence in which orders were submitted during the 10 second interval of that block? If not, how are equal orders for that block prioritised for fills?
Do certain order types get sequenced before others?

Thanks.

I would like to understand some elements of the delegate structure better.

How much is a delegate realistically to have to pay to third parties or employees for outsourcing block-production and feed prices, assuming they do not possess these skills themselves? After such contract payments, how much revenue would remain for a 100% pay rate delegate?

If an individual runs multiple delegates, what is the best way to ensure that feed prices provided by each delegate are uniquely manufactured? (come to think of it, how do we know how many unique processes there are generating price feeds among the set of 101 delegates?)

Is there a limit on how many delegates an individual can run?

There has been some past debate about whether delegates should fulfil more or less services, perhaps even being purely block-signers (as they were originally) and paying for other common services in some other form. Here I take a different tack. What if delegates as a collective group were completely freed from the requirements of block-signing and price-feeds? What I find compelling about this idea that there would be far richer competition for delegate slots, delegates could be voted on their specific contributions rather than a menagerie of tasks, and the block-signing and price-feed pools could be managed by more expert judges. But there may well be big flaws or weaknesses as well.

I've already suggested elsewhere the possibility that a much smaller group of delegates could be voted in as price feed arbiters, that coordinate an open pool of price feed submitters. This would remove price-feeds as a required delegate function. See https://bitsharestalk.org/index.php/topic,15331.msg197641.html#msg197641

Is it feasible that something similar be done for block-signing? This is not a proposed process, as I don't think I'm best placed at all to determine the best procedure, but as a starting point for discussion I'm thinking something along these lines -

- there is a smaller group of block-sign arbiter delegates voted in by all stakeholders via the usual process, on the basis of their proposed selection process for block-signers
- each delegate in this group is required to maintain a template of preferred block-signers
- the combination of these templates determines the 101 block-signers at any time
- block-signing rewards no longer go to delegates but to this set of 101 block-signers
- whenever a block-sign arbiter delegate changes their template, there is a minimum time period before it comes into force, so in effect all stakeholders have a right of veto
- when a new block-sign arbiter delegate is voted in, their template takes immediate effect

So is something like this feasible? How would it affect the integrity of the block-signing process? Does the idea have merit?

My client has not synced the last couple of versions, and I've not been able to trade for many weeks as a result. I'm now running with 0.8.0 and plenty of RAM. I tried starting from scratch, and syncing is stuck at 113 days ago. Below is what get_info says...anything obvious?

{
  "blockchain_head_block_num": 1272493,
  "blockchain_head_block_age": "16 weeks old",
  "blockchain_head_block_timestamp": "2014-12-16T00:37:40",
  "blockchain_head_block_id": "36e9a00a6cc5b028425789d65d01975a6daf80ec",
  "blockchain_average_delegate_participation": "0.01 %",
  "blockchain_confirmation_requirement": 1,
  "blockchain_share_supply": "2,498,429,811.47841 BTS",
  "blockchain_blocks_left_in_round": 6,
  "blockchain_next_round_time": "at least 58 seconds in the future",
  "blockchain_next_round_timestamp": "2015-04-08T04:47:10",
  "blockchain_random_seed": "49eff8a9887b01cfc6b9a6d855a3a40e63a60948",
  "client_data_dir": "/Users/<username>/Library/Application Support/BitShares",
  "client_version": "0.8.0",
  "network_num_connections": 6,
  "network_num_connections_max": 200,
  "network_chain_downloader_running": false,
  "network_chain_downloader_blocks_remaining": null,
  "ntp_time": "2015-04-08T04:46:12",
  "ntp_time_error": 0.055073999999999998,
  "wallet_open": true,
  "wallet_unlocked": true,
  "wallet_unlocked_until": "12 days in the future",
  "wallet_unlocked_until_timestamp": "2015-04-19T18:32:29",
  "wallet_last_scanned_block_timestamp": null,
  "wallet_scan_progress": "100.00 %",
  "wallet_block_production_enabled": false,
  "wallet_next_block_production_time": null,
  "wallet_next_block_production_timestamp": null
}

I am noticing quite a strong opinion that price feeds are just a temporary hack required until liquidity improves. And on the basis of this opinion, there is some resistance to ideas that build on top of the feed price. So I feel this is a useful issue to attempt to clarify at this point.

I personally think that for market-pegged assets to operate successfully it is critical there is some form of obligation on issuers (shorts) to redeem (destroy) units at the peg level at some point in time. So I currently see price feeds as a permanent feature.

I think if there were no redemption obligations on issuers, then all market participants would now choose to own and sell the bitAsset purely on the basis of their own individual perceptions of utility and future prospects. There would be no reason for any seller below the peg level to instead hold for a better price on the prospect that redemption may be available at the peg price. Likewise any buyer at this level takes on a risk that the market's evaluation might go lower instead of higher. Even if there are more liquidity providers over time, they would be forced to place orders around the current market rather than the peg price in order to make profits instead of losses.

I guess its possible issuers (shorts) could collectively choose to adjust supply to manipulate prices toward the peg price. They may be disincentivised from allowing peg failure if they believe that would jeopardise the valuation of their personal BTS holdings. However, I'm skeptical such an indirect incentive can be relied upon. BitShares may one day be much more than just bitAssets. Smaller bitAssets might not make much difference. And competitors may attack Bitshares by self-creating unlimited supply and driving certain bitAsset prices toward zero. BitAsset users would be asked to rely on trust in a group of unknown issuers and their unknown desires.

Placing an obligation on issuers to redeem at the price feed means that each market has a separate valuation anchor, related directly to the value of that "contract". No trust or reliance on issuer incentives is involved. While certain market conditions can still devalue that contract more than usual - for example, a quickly declining BTS price may lead to a discount reflecting lower collateral levels and greater uncertainty in converting any BTS received to real assets - I would take comfort that the existence of a contract places limits around how far the market will allow the price to deviate from the peg price.

I know others differ in view, so interested in thoughts.

[Edit May 12: The ideas in this thread have now been superseded by whitepaper here: https://bitsharestalk.org/index.php/topic,15880.0.html]

This is not a proposal, just a personal idea, let me know what you think.

Basic Structure

There would be a standard free market in the bitCurrency (e.g. bitUSD, bitCNY, bitEUR...) against BTS, with only bids/asks, and no price feeds or shorts,

PLUS

There would be an Issuance Window, where users are free to create and destroy units of the bitCurrency instantly at the median feed price (MFP) +/- a small spread.

An Issuer Pool would automatically make the market at the Issuance Window, by accepting BTS to create new bitCurrency, or distributing BTS to destroy bitCurrency, instantly upon demand and in unlimited quantity for destruction, and nearly unlimited (see below) for creation. The Issuer Pool would be capitalised by a combined pool of investors seeking leverage to the BTS price, who have paid BTS into the pool by buying units in the pool (Issuer Units). The Issuer Units would trade in their own free market against BTS.

The leverage to BTS in the Issuer Pool varies with both bitCurrency creation/destruction (i.e. demand) and movements in the BTS price. The Issuer Pool is required to remain within specified leverage limits. If leverage begins to get too high, the Issuer Pool would issue more Issuer Units into the free market, tending to create a discount to NAV that would attract new investors and raise capital. If leverage begins to get unattractively low, the Issuer Pool would buy back Issuer Units in the free market, tending to create a premium to NAV that encourages capital release to increase leverage again. These changes in unit supply should be prescription-based and transparent to the market with notice, so that the market has time to prepare to take advantage of it.

The only limit on unfettered activity at the Issuer window would be that new creation would be stopped and queued if the Issuer Pool failed to raise more capital when beyond its leverage limit, despite significant discounts to NAV on the Issuer Units (e.g. if the Pools had grown too large relative to total BTS supply that is available to support them). In this scenario bit-Currency premiums in free markets would be unresolved, just as they would in the current system.

Key Benefits

- BitAssets would retain their key advantages over competitors, being it is transparently and overly collateralised, and supply is highly responsive to changes in demand in both directions
- The peg would be as close to perfect as possible, because market-makers could provide massive buy and sell walls around MFP in the knowledge they have access to the Issuance Window
- It removes the complexity associated with individual shorts, including expiries, calls, rolls and interest (shorts are now replaced by Issuer Pool investors)
- It allows free market trading in bitCurrencies:BTS in a simple form that people are traditionally familiar with, without needing to understand complicated market rules
- It allows other functionalities to be built in the BitShares environment that complement these markets, such as lending, depositing, margin trading etc (see below)

Impacts on bitCurrency users

They can have confidence operating in highly liquid strongly pegged markets, whether they ever personally use the Issuance Window or not.
They no longer receive interest (bitCurrencies are more like cash) but they can receive interest in lending or deposit markets (below), just like when they lend or deposit fiat cash. This is less confusing than the current market which combines properties of both cash and deposits.

Impacts on Issuer Pool Investors (replacing shorts)

Unlike shorts in the current system, Issuer Pool investors share the costs associated with managing a leveraged investment. Costs exist in both systems, but in different forms.

When supply is too high for demand in the current system, shorts would need to raise their interest rates to compete to retain their shorts beyond expiry. In the Issuer Pool, unit-holders get diluted by those accepting the buyback of Issuer Units at a premium, if they do not also accept it themselves and take capital out.

When BTS falls in price and collateral becomes low for some shorts in the current system, they can choose to add collateral, or get called and effectively lose BTS at a low price (which is a cost). If the Issuer Pool runs low on collateral, it sells new units at a discount, which dilutes any investors that choose not to participate by contributing more collateral.

If demand is running hot and outstripping supply, there are no costs for shorts in the current system in maintaining their position. However investors in the Issuer Pool will be diluted by new Unit issuance if they choose not to participate.

In the current system, shorts receive a leveraged return on their BTS, less interest, and less the costs associated with inopportune calls or expiries. In the Issuer Pool, investors receive a leveraged return on their BTS, plus a return from market-making at the Issuance Window, less dilution from new unit issuance or buybacks that they do not participate in pro-rata.

In the current system, shorts can attempt to earn extra timing return by shorting at premiums and covering at discounts. Issuer pool investors can attempt to earn extra timing return by buying more Issuer Pool units at discounts and selling at premiums.

Its not clear to me that there would be a big difference one way or the other, on average, from a purely economic perspective. However it is much easier for the average investor to participate in the Issuer Pool than it is to manage shorts, which may expand the available supply.

Impacts on market-makers

Market-makers would now make a market anywhere in the bit currency, and utilise the Issuance Window for hedging or offsetting. This makes the task easier and less risky, so spreads should be very tight. Gateways would likewise be able to offer very tight spreads.

Complementary functionalities

A direct lending market could be established in the bitCurrency, allowing bitCurrency lenders to earn interest at risk. The borrowers could use or sell the bitCurrency for any personal purpose, opening up the set of all available borrowers beyond just BTS bulls, in the same vein as BTCjam.
A banking/deposit market could be established in the bitCurrency, where an intermediary accepts interest-bearing deposits, and lends to a managed pool of borrowers, taking some equity risk.
A margin lending market could be established in the bitCurrency, providing margin for other on-blockchain investments such as BTS. This could operate similarly to Bitfinex.
Other possibilities are using the bitCurrency for margin accounts to underpin derivative and CFD markets.

Essentially there is no need for the properties of any of these markets to be built into the primary bitAsset market, because they can all be provided separately, such as via UIAs. In particular, it is not necessary to offer interest in a cash-creation market if lending and deposit markets can provide this.

There's more I could flesh out, depending on initial interest.

I was wondering if it might be worthwhile having a basic client available just for holding and transferring functions on a private wallet. This would allow casual users and BTS investors to maintain a simple unchanging client while the development work and upgrades continue on the full service client. It would provide extra security of funds over the online wallet, while still allowing users to transfer to/from external exchanges when needed and make switches between bitAssets and BTS via exchangers such as metaexchange. Any views?

With BTS/fiat trading now dominated by BTC38, and very poor liquidity elsewhere, is it the case that basically the price feed is derived from a single exchange? If so, this makes us very reliant on a single external party where we don't have good transparency on the internal practices of such exchanges. It seems a shame that BitShares is promoting decentralised trading, yet the trading in our own token needs to take place on centralised exchanges in order to feed inputs to the system.

I've seen talk in the forum about setting up decentralised exchange between chains using escrow parties. Could somebody apply a similar idea to BTS/fiat, for example one of the gateways? If so, then that might also be a reliable price feed, depending on how active such a market might be. I expect the regulatory requirements would be more stringent than a crypto-crypto exchange though.

On a related point, it also seems a shame that for now, while its difficult for most casual users to maintain an up-to-date client, this forces them to centralised exchanges to hold and trade. This subjects them to risks as in the recent BTER case. It would be good if some form of trading were available from the online wallet, which although not as secure as a private wallet, removes the need to rely on external exchanges.