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Messages - Thom

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46
Stakeholder Proposals / Re: Bitshares: Margin Trading and Swap contracts on the DEX discussion
« on: October 29, 2018, 05:52:36 pm »
Quote from: matle85 on October 25, 2018, 06:18:53 am
My only concern would be if we get tangled in something that complicates the DEX's status as they try to say we are acting as a money lender and are therefore subject to X, y and z laws.

I am similarly concerned. "They" will use any excuse whether legit or not to shut crypto down. This doesn't fail the Howie test tho, as it is peer to peer lending, proceeds of that are for individuals, not a collective.

47
General Discussion / Re: New mechanism to handle bad debt (black swan)
« on: October 27, 2018, 06:53:57 pm »
Quote from: abit on October 21, 2018, 11:23:09 pm
Just saying, we should avoid labeling people. A person in poverty or has difficulties to manage his own financial status so unable to pay his bill or debt occasionally doesn't mean he is a scammer or not qualified for contributing as a worker or a witness.

True, I agree. However, lets not rely on an edge case to base our policy / decisions on. We definitely need a way to dis-incentivize traders who habitually break the rules (in this case allowing collateral to drop under 100%, or whatever minimum standard is set by committee).

Every crypto ecosystem needs to have a quality, "ungamed" reputation system. How can you argue against that when most crypto projects rely on a diverse / dispersed group of people with widely varied cultures and different levels of knowledge (about any subject, but especially economics, technology and geo-politics)? There are quite a few arguments that would end sooner and be less disruptive to communities if we had this. With that said tho rep systems are difficult to create in a way that can't be gamed or undermined in some way. Just look at how controversial flagging is on steemit as evidence.

We need to balance the needs of ALL users of BitShares, and that's not an easy task. Nobody, including traders, should get away with breaking our consensus rules without a penalty. No penalty is an incentive to break rules. IDK if a consensus to temporarily revoke LTM status can be gained or if it is the best way to do it, but I'm willing to bet if that were the penalty 2 things would happen for sure:
1 - traders and perhaps a few others will complain loudly
2 - traders would not allow their collateral to drop low enough to trigger LTM revocation, at least not twice.

IMO traders have a stronger voice here than hodlers. Not enough dedication / involvement towards longevity and utility for all longterm.

I keep hearing about the impossible trinity, what about the impossibility of this trinity:
1) Safe trading (protection from undercollaterized assets which could lead to a catastrophic cascade collapse, as we're on the verge of in mainstream / centralized / manipulated ecomomy)
2) low to zero collateral for short positions (i.e. < 100%)
3) guaranteed redemption of collateral (with some exceptions)

The only item of those 3 which does NOT currently have consensus is item #2. If tight peg is valued over items 1 or 3 then make an official proposal to  alter the rules and campaign shareholders or the few proxies in control of this ecosystem to gain consensus on it.

48
General Discussion / Re: Important and urgent appeal to the witnesses and members of the Committee!!!
« on: October 26, 2018, 03:48:18 pm »
Quote from: seyseich66 on October 25, 2018, 09:30:57 pm
And so people have to lose money because of their random mistakes?

Well, that's how people learn. It's a matter of being responsible for the decisions you make and the actions you take.

Sad they're necessary, but it's best for the safety of those who have already learned the hard lesson you're in the middle of.

I am also in favor of removing the "asset owner can transfer asset back to himself" permission on committee controlled bit assets like BitUSD, BitCNY, BitEUR etc. We call these "trustless assets", but it appears whoever set these assets up initially didn't set permissions according to a truly trustless model.

Best of luck to you in the future. Perhaps one day you'll understand the ramifications to others of what you're asking.

49
General Discussion / Re: Announcement on BSIP42 relevant actions
« on: October 18, 2018, 12:31:10 am »
Quote from: abit on October 17, 2018, 01:15:43 am
Quote from: Thom on October 17, 2018, 12:17:51 am
Allowing witnesses to individually set minimum collateral level changes it from a global, uniform setting to one more akin to "pick your witness, pick your desired margin collateral level". I think it would create an unhealthy competition between witnesses.
IMHO this is actually healthy. It means "vote for witnesses who are working well" when the consensus is to dynamically adjust MCR according to market conditions. Again, witnesses aren't predicting market price, they're acting according to perceived market conditions/data.

Voters should already be voting "for witnesses who are working well", and they do so on the basis of their own subjective perspective of what that is with very few guidelines and understanding of what is important for an economic system that won't self-destruct like mainstream currencies eventually do. Although we all would like to see more people who are dedicated and attentive to the ongoing well being of BitShares, it's probably unrealistic to expect shareholders to care about issues unrelated to them, like trading if they aren't traders, or savers if they're traders as examples.

Unless all witnesses use the exact same sources how could shareholders know if they're working well? What is "working well"? For who is it working well, just the voter or the entire ecosystem? Some think it's only a matter of keeping tight pegs for MPAs, others think more broadly about the ecosystem and vote to balance out competing interests, which is a very difficult thing to do under our decentralized governance structure.

We'll just disagree on this point. I can live with that.

50
General Discussion / Re: New mechanism to handle bad debt (black swan)
« on: October 17, 2018, 10:32:41 pm »
Quote from: pc on October 17, 2018, 06:33:07 pm
BSIP-18 doesn't guarantee recovery either. If BTS continues to go down, neither solution will help.

@abit 's suggestion is better than BSIP-18 because it limits the damage to only the undercollateralized positions, while leaving the rest of the market intact.

Exactly, that's why I like it.

Quote from: abit
IMHO, in % sense, collateral requirements should be increased while market is bullish; then when market turns to bearish, there will be more spaces to release risks.
Interesting, I understand that logic, but am surprised to see you say it, since doing so would dis-incentivize trading and shorting in particular. Wasn't it you that said 175% collateral was too much in bullish conditions?

I know I've seen bitcrab and others talk favorably about allowing CR to go < 100% and "not to penalize debt holders", but I believe we should use the carrot and the stick to keep them trading by the rules, which help to keep the ecosystem safe and fair for all.

51
Stakeholder Proposals / Re: [Worker Proposal] On-chain smart contracts for Bitshares
« on: October 17, 2018, 12:54:48 am »
Quote from: xeroc on October 16, 2018, 09:08:51 am
With EVM contracts, you allow anyone to install new code. What happens is that noone knows how *reliable* that contract is! Was
it reviewed? By whom was it reviewed? Was it tested? How was it tested? Ultimately, the users need to *trust* the code? How well
will that work? We've seen with the DAO!

THIS^^^

52
General Discussion / Re: New mechanism to handle bad debt (black swan)
« on: October 17, 2018, 12:44:57 am »
I like it!

Not sure you've fully covered the effects if item 3 is only partially filled tho.

Where do proceeds from sale of undercollateralized debt positions go? Are they returned to the debtor or go to reserve fund or elsewhere?

I think a penalty for such undercollateralized debt position holders will help keep them more attentive to their collateral and dis-incentivize traders from operating with too little backing.

Although I feel strongly that we need to maintain at least 100% backing of MPA assets at all times, I feel it would be quite safe if collateral requirements were reduced while market is bullish, and committee could set a global collateral ratio. If that occurred about as infrequently as witness pay is adjusted (ofc that depends on the market), coinciding with a sustained bull market trend, it might work. Question for the committee is how long does "sustained" need to be? That's why I compared with how committee decides to maintain or change witness pay. Point being the CR level would only change with longer spanning trends, and not with every rise and fall of chart candles.

53
General Discussion / Re: Announcement on BSIP42 relevant actions
« on: October 17, 2018, 12:17:51 am »
Quote from: abit on October 14, 2018, 06:18:21 pm
Quote from: Thom on October 14, 2018, 04:52:16 pm
Quote from: abit on October 14, 2018, 11:33:51 am
No, margin call is initialized by witnesses via price feed. As I've said, whether a debt position is "well collateralized" is subjective.

> witnesses are able to feed parameters to change fully-collateralized debt positions to undercollateralized when needed.

Definitions are crucially important, so if you don't define terms we will keep going in circles. The bare minimum amount of collateral required is 100% of all short positions. Anything less and you risk a house of cards scenario like mainstream financial institutions are about to experience. We have set a standard of 175% to provide more safety to reduce margin calls, and I've seen comments we could reduce that to 130%, but for some that's not enough. 

We had those numbers as parameters before doesn't mean we have to stick with those numbers forever. "for some"? for who?
Bitcrab for one, and I thought you as well wanted to reduce required collateral. So I gather from various comments you both have made recently.

Quote from: abit on October 14, 2018, 06:18:21 pm
Quote
The last statement appears to be yours abit. Putting it upon witnesses to define what they believe is too little collateral creates a conflict of power between witnesses and the Committee who sets various blockchain parameters. The minimum collateral ratio should not be determined by witnesses, it should be uniform and globally defined, and that is the role of the committee. It should not be dynamically set by each witness.

So you're expressing your own opinions as well. Witnesses act according to rules in consensus, rules are defined by BSIPs, consensus is made by stake based voting. Committee doesn't have the final say about parameters, stake holders have.

Yes. You also stated governance model well. However, I didn't say committee had final say on parameters, but they are the only ones authorized by consensus in current graphene design to change them. Sure, if they do that badly they'll risk being voted out, nevertheless the definition of roles is clear, and I maintain far better and more inline with the current design of graphene we have consensus on, than alter the design and put a new responsibility on witnesses that would be more logical with committee.

Allowing witnesses to individually set minimum collateral level changes it from a global, uniform setting to one more akin to "pick your witness, pick your desired margin collateral level". I think it would create an unhealthy competition between witnesses.

54
Stakeholder Proposals / Re: Conventions / Coordinating BSIP42 for BitUSD market with MCR algorithm
« on: October 16, 2018, 11:48:56 pm »
Thanks for commenting here Bitcrab, and contributing to this discussion.

Quote from: bitcrab on October 16, 2018, 04:45:42 am
actually BSIP42 is already active on bitUSD, otherwise bitUSD would have a big premium as before.
It's premature IMO, however I have removed my feeds for BitCNY and BitUSD so my market price feed will not interfere with the experimentation going on via BSIP42.

Quote from: bitcrab on October 16, 2018, 04:45:42 am
BSIP42 is irrelevant to MCR adjusting, the new MCR-based solution should have its own BSIP.
Not according to others who claim BSIP42 is still applicable and a new BSIP is unnecessary. I agree with you tho, that a new BSIP would be better for USD experimentation. Might be good to use BSIP42 as a starting point for the new one tho.

Quote from: bitcrab on October 16, 2018, 04:45:42 am
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?
Yes, Zapata wrote this one to compare witness feeds to each other and I believe it can display settings for his script also. Abit commented in Telegram he would be OK using Zapata's feed script [once updated with MCR core fix] as a reference script. I think that is the best way to go, so all witnesses have a common code base and we all start off at same baseline.

Here is a comment I wrote on Telegram that I feel is important and on point in this discussion:

Quote from: Thom (in Bitshares_Witnesses Telegram group)
In reply to Abit More: "but when everyone started to use it blindly "

So a "reference" script is OK until witnesses start to diverge from it? I agree, and any inaccuracies such changes introduce is their doing and they should be held accountable as usual. I also agree witnesses should be more responsible and thus attentive, but I also think expectations should be made clear on how witnesses participate in the experimentation.

Are witnesses being coordinated? Are those playing around with BSIP42 on BitUSD using a common script? Perhaps witnesses are less attentive b/c of a lack of planning? Is there a beginning and ending time for each adjustment iteration? Are the adjustment parameters for each iteration pinned or communicated so all witnesses can stay abreast of changes and stay synced? These are the types of questions I believe need to be answered to optimize the experimentation. Many of these types of questions can be addressed in the a BSIP.

It is so much easier for us to obtain a consensus for an algorithm if we work as a team on the same code base rather than trying to keep all the different scripts functioning the same way, with each witness working independently and taking a different amount of time to complete the changes on their own version.

The way I see it if we all start with the same code base and perfect that to consensus, then we've all agreed the script is as good as we can make it for the market conditions faced during experimentation. From that point on any deviation done by a witness from the last reference script iteration is on them to justify their changes to shareholders. 

Working independently may foster innovation, but in cases where a team of people must come to agreement it may be easier to start with consensus and maintain it as long as possible, hopefully until all agree the algorithm is as good as possible for the conditions at the time.

There is nothing stopping an individual witness from suggesting [innovative] changes to the ref script either. Working on a group effort needn't prevent innovation and individual thinking.

55
Stakeholder Proposals / Conventions / Coordinating BSIP42 for BitUSD market with MCR algorithm
« on: October 15, 2018, 06:32:50 pm »
A brief discussion took place (https://t.me/BitSharesDEX/329077) on Telegram today where Abit asked about metrics to eval BSIP42 algorithms. I hope to cultivate ideas here on how we can conduct similar experimentation for the BitUSD market as was done for BitCNY last month. Once the core MCR bug is fixed I want to be as ready as I can be to begin these experiments.

I will add to this after I have a look at Zapata's BSIP42 feed code, which I hope to find elements to expose to help us coordinate witnesses' BitUSD feeds.

It would be very useful for any of you witnesses that participated in the BitCNY experimentation to chime in here. I would like to see an explanation of the "experimentation process" that was used for BitCNY. From my observation it was messy and wasn't well coordinated. Nobody could even say with certainty which witnesses were experimenting with BSIP42 and which ones weren't, or how many different BSIP42 scripts were being used by experimenters.

Should witnesses experiment using a "reference" feed script? I think that would be easier to coordinate, and once we've come up with a reasonably stable algo, witnesses can port it or modify it to fit their operation. This is a question, not a foregone conclusion. I will probably use Zapata's script unless something else pops up that would be better.

So one item we could publish here is a list of witnesses that intend to participate in BSIP42 for BitUSD once the core is fixed to allow use of MCR in the algo.

How do we determine when algo "adjustments" are made? IIRC Abit acted as a type of coordinator to inform witnesses about adjustments / premium. Rather than relying on one person lets discuss this so we all know how that is determined so any of us could announce the info. However I think it's better for consistency that only one witness post or pin the announcements.

56
Stakeholder Proposals / Re: Bitshares: Margin Trading and Swap contracts on the DEX discussion
« on: October 15, 2018, 03:29:24 pm »
Quote from: bitcrab on October 15, 2018, 12:42:17 pm
Quote from: abit on October 15, 2018, 10:25:26 am
The most difficult part is how to guarantee the lenders can always get back their assets before a black swan event, with good enough performance. All external markets have external tools E.G. insurance to try to achieve this. BM has proposed a similar idea long before (read: bond market) but abandoned IMHO due to performance issues and other limitations.

why need to guarantee this?

Perhaps it's not required, but surely you see how having it provides an added measure of safety to the lender, which should stimulate even more lending.

57
General Discussion / Re: Announcement on BSIP42 relevant actions
« on: October 14, 2018, 04:52:16 pm »
Quote from: abit on October 14, 2018, 11:33:51 am
No, margin call is initialized by witnesses via price feed. As I've said, whether a debt position is "well collateralized" is subjective.

> witnesses are able to feed parameters to change fully-collateralized debt positions to undercollateralized when needed.

Definitions are crucially important, so if you don't define terms we will keep going in circles. The bare minimum amount of collateral required is 100% of all short positions. Anything less and you risk a house of cards scenario like mainstream financial institutions are about to experience. We have set a standard of 175% to provide more safety to reduce margin calls, and I've seen comments we could reduce that to 130%, but for some that's not enough. 

The last statement appears to be yours abit. Putting it upon witnesses to define what they believe is too little collateral creates a conflict of power between witnesses and the Committee who sets various blockchain parameters. The minimum collateral ratio should not be determined by witnesses, it should be uniform and globally defined, and that is the role of the committee. It should not be dynamically set by each witness.

Witnesses should be explicitly "reporters of facts they observe" and block producers. Giving them the responsibility to set asset prices (and acceptable collateral levels) that differ from what can be observed in the market is manipulation and potentially opens witnesses up to liabilities and law suits.

When the MCR core bug is resolved we can experiment to achieve a tighter peg by preserving the market price feed and changing MCR or MSSR. Although some may argue that is also price manipulation b/c it achieves an almost identical effect (yet to be demonstrated, but that is general consensus), I don't see it that way.

As I've said and will continue to say, under-collateralization is my main concern regarding BSIP42. It is also Xeroc's and others who have PM'd me. Liquidity and a tight peg are obviously important, but IMHO and others not more than preserving the collateral.

I believe it would also be disastrous to the ecosystem's reputation to renig on the promise of redeemability as some are so willing to do. Yes I recognize redemption to 100% is not always possible but that is not by design as much as it is by the supply and demand of the market.

58
Stakeholder Proposals / Re: [Worker Proposal] On-chain smart contracts for Bitshares
« on: October 12, 2018, 04:26:23 pm »
You go Yuri! Well written OP!!

I can see OL has invested a significant amount of time and effort supporting Etherium tokens and this is a logical extension if that effort.

Although I do agree that EOS is in too early a state of evolution for stability and broad consensus (the EOS community is very diverse and many in that community operate under opposing principles and visions of what they want the platform to become), my view is like your #1, and BitShares shouldn't be trying to be all things to all people or businesses. Lets let EOS evolve and if it moves in a direction favorable to BitShares community, integrate with it using atomic cross-chain swaps and run the smart contracts on a platform optimized for it. IDK, but seems to me it will be much easier to implement an interface to the EOS chain than to ETH.

I tend to think BitShares needs to A) define target audiences and B) list the features and functionality (in priority order) required for each audience identified, including completed, in development and what's next. Yes, that's marketing, but unless we can all point to a document or source that embodies these things BitShares will bounce from one pinball bumper to the next in reaction to the community concern of the day. We won't be focused and progress will be what it is now.

How does the upcoming HTLC functionality affect this discussion? Will you utilize HTLC to accomplish this?

59
Stakeholder Proposals / Re: [Worker Proposal] BitShares.org - ID: 1.14.126
« on: October 11, 2018, 04:47:42 pm »
Quote from: Digital Lucifer on October 11, 2018, 02:22:17 pm
Quote from: Customminer on October 11, 2018, 02:12:01 pm
Why pay for SSL certs when you can get them for free using certbot?

I'm not sure of the neccessity of the newsletter, email nor professional inquiry panel, these feel like centralizing BTS around this website.

1) Paid SSL at inbound price of 10ish Dollar per certificate for a year with signature of the domain on it is not same security as free ssl certbot.

2) Newsletter is common in any normal business in the world. Its being used for signups and monthly notifications to its clients/partners.

Everything but "centralizing" is included in this worker.

Many thanks for your opinion and support.

1> Cost of certs is no big deal here. I agree with @customminer LetsEncrypt / certbot is free and reliable (I use LetsEncrypt with getssl bash script on all of my nodes, have used certbot in past also, but more options I don't need with certbot)

2> I would say the newsletter is worth trying out to see if many find it useful. If not it should be discontinued. Jonathon Ba'hai and CryptoPrometheus created a very nice newsletter which the community really enjoyed. It became too time consuming to manage as content was growing rapidly. They also wanted to start building a replacement tool called DPOSHUB which launched but never really went anywhere.

Love your work on the new site and if Micheal doesn't vote for it I will temporarily remove him as proxy and vote for it directly myself. 

60
Stakeholder Proposals / Re: Proxy: xeroc
« on: October 11, 2018, 03:41:56 pm »
Quote from: xeroc on October 11, 2018, 09:59:53 am
Quote from: yury on October 11, 2018, 07:36:52 am
Just to be totally clear, do I understand correctly that you evaluate risk of undercollateralization as very low?
I do believe undercollatarlization must be avoided at all costs!
But I also realize that
a) black swan isn't as bad as world armageddon, but in fact can be recovered through BSIP18 and
b) the risk of *OVER-ALL* undercollateralization is much smaller than the risk of an individual position going below 100% collateral.

Point b) is very crucial to understand and while I do not believe we should bail out individual short positions with too little collateral (but instead would rather penalize
them), I do see a fine line between risking the entire asset through global settlement just because of a single position being undercollateralized and temporarily tune
price feeds to potentially "hide" a few undercollateralized positions (that will have a margin call that can be filled!).

Again, to me, this is a short-term solution and I would prefer any undercollateralization to be *obvisous* and *transparent*, but we first need to fix the backend to provide us
with the necessary means to get there. In the mean time, plenty of discussion is being done to figure out the "how"

So glad to see you make these points clear Fabian. I see collateralization is a crucial, bedrock principle that must be maintained. Lets not allow BitShares to become like Bitcoin, with its whitepaper principles ignored and the platform no longer useful for why it was created.

I'm not saying the platform shouldn't evolve, ofc it should nothing is ever perfect. I'm just saying its evolution should take place according to sound economic and individual freedom promoting principles (Austrian, not Keynesian, individuals not collectives) and not forget the lessons learned over the centuries and in particular the last 100 or so years of just how counter to individual freedom and prosperity centralized planning is.

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